.xxx contract proposal

["Mike Rodenbaugh" <mxr@xxxxxxxxxxxxx>]

I urge the ICANN Board to reject the revised .xxx contract proposal,
because there are no assurances of adequate protection for existing
businesses' trademark rights in this secretive new registry for
adult-only websites.  There appears to be a high likelihood that this
registry will cause financial and reputation damage to existing and
future businesses, particularly due to the notorious yet anonymous,
inherent nature of this registry.  ICANN should protect businesses by
requiring the registry to be publicly supported and operated as is every
other TLD, and by requiring it to provide reasonable safeguards against
abuse, passing that cost onto its customers just as any other online
business must do today.

 

ICANN should protect existing businesses from the harm likely to be
caused by flagrantly abusive registrations.  Businesses have paid for a
very large percentage of the domain names registered to date, and should
not be compelled to pay for any more "defensive registrations" in .xxx.
Existing businesses have a reasonable fear that their trademarks will be
abused in this new TLD.  This registry, of all registries, should be
required to provide explicit safeguards against abusive registrations,
at no cost to existing businesses.

 

 From the perspective of almost all businesses outside of the adult
entertainment industry, there is no value to registrations in this new
TLD.  Yet, ICM would like every business in the world to pay a
perpetual, defensive registration fee (for a blank page to resolve), for
every domain string that we believe might become a candidate to be
infringed in .xxx.  For many online businesses, such a list could
contain many strings, based upon thousands of past and ongoing
infringement matters across more than 250 other TLDs launched in the
last ten years.  The vast majority of businesses will have much smaller
lists, but they will add up to a very large number of defensive
registrations, likely larger than the number of domains with active
websites.  Of course there are many trademarks yet to be created.  So
such fees, imposed on every defensive registration perpetually, could
provide very nice operating cash flow for this new registry, at the
entirely unjustified, useless expense of existing businesses everywhere.


 

Alternatively, ICM intends to require businesses to pay a much higher
STOP or UDRP fee, also additionally and significantly sucking away
budget and resources of our legal departments, every time we have
"failed to defensively register" an infringing domain string and then
someone else registers it in .xxx.  This is not acceptable.  Imposition
of fees like this would amount to an ICANN-imposed, perpetual subsidy
paid by existing businesses directly to the coffers of this new registry
operator, and the arbitration providers who have been created to decide
UDRP cases (more than 80% of which are decided for the complainant, only
after several thousands of dollars in legal expense).  

 

ICM has seemed to indicate vaguely that they would not allow typosquats
or other trademark infringing domains in the .xxx domainspace.  But
there are no assurances as to how quickly, broadly and aggressively that
is going to be policed or decided, or by whom exactly.  These concerns
should be specifically resolved in the contract with ICANN, as we should
not rely on vague oral assurances.  

 

Furthermore, trademark concerns and complaints, defensive and reactive,
should be free to file and resolve as they are with Yahoo!, Google,
eBay, AOL and every other online business that inherently involves the
interests of trademark owners (including existing domain registries and
registrars alleged to be infringing trademark rights).   Existing
businesses should not have to pay a single penny to support this new
business.  "Defensive registrations" should be free upon proof of a
legitimate trademark right, broadly defined to include misspells and
other confusingly similar depictions.  After launch, the registry should
provide a free, easy online process for additional defensive
registrations, and for handling IP complaints via notice and takedown.
If counter-notice reveals conflicting, legitimate claims, or if anyone
thinks a string should not be defensively registered, then those parties
should settle or pay to adjudicate.  

 

This is likely to eliminate a huge amount of infringing activity,
because the economics would change dramatically.  Infringers would know
their actions could be ended at any time, rather than 3-4 months after
duly noticed UDRP complaint (at cost of several thousands of dollars to
the complaining party).  Therefore they will invest far less in clearly
infringing activity, and the burden of stopping such activity will fall
upon a party who is both profiting from the activity and is easily able
to stop it immediately upon proper notice -- the registry. 

 

Of course, this would require the registry to exercise discretion in
some cases.  That is entirely appropriate with sponsored TLDs, and
especially .xxx which claims it will monitor content to avoid child
porn, claims to prohibit trademark infringement, etc.  The registry
should adopt detailed policy, vetted through the ICANN process and
appended to its contract, so that registry and registrants have as clear
guidance as possible as to how this process will work.  It is not fair
instead to require existing businesses to foot the bill for legal action
against flagrant abuse in this new TLD, while ICANN, a registry and a
registrar are profiting from every new domain registration.  This should
be a cost of doing business for the ICM registry, as it is for every
other business in the world today, and should be made a requirement in
their contract with ICANN so that existing business interests are
protected in advance.

 

If this contract instead is entered without these protections, then
perhaps this new registry will adopt free and effective trademark
policies all by itself.  Else, I suspect redress will happen through
litigation against the registry, just as many other new online
businesses have faced from trademark owners.  Yet the contract only
provides that ICM Registry is a Delaware LLC, with 'contact info to be
specified from time to time to ICANN.'  Will ICANN then be accepting
service of process upon this registry?  It is likely to be served with
process to find out that contact information, at least.  That could be
avoided by designating an agent for service of process within the
contract, as is fairly standard in commercial contracts and seems
especially prudent in this situation.

 

Every other TLD registry has had public supporters and is operated
openly.  There appears no reason why the adult entertainment industry is
excluded from that common sense notion.  Of all registries, this
registry in particular should be publicly supported, with that support
subject to public scrutiny, before ICANN gives its stamp of approval.  

 

It is neither fair nor acceptable for ICANN to practically force
existing businesses to subsidize new registries, especially this one
which is shrouded in secrecy and is likely to cause damage to existing
business interests.  We've been down that road too many times already,
at great and continuing expense.  We cannot have an endless string of
new TLD shakedowns, and .xxx seems to be another step in that direction
despite all of the assurances of its backers.  I urge ICANN to reject
the existing contract proposal, in order to provide public information
about the sponsorship of this registry, and to extract greater, free and
explicit protection for existing business interests.

 

Respectfully,

 

Mike Rodenbaugh