[bc-gnso] McCarthy/Franklyn comments on closed generics

Thu Mar 7 22:13:33 UTC 2013

BC Members,

I definitely support inviting the .Brands that are attending the Beijing meeting to join us, and I have already invited the few that I know are attending.

While I must recuse myself from this issue, I am fully supportive of adding this topic to our agenda if others are interested in doing so.

I will actually be sending an e-mail tomorrow with a link to a survey which will ask for your thoughts on a number of issues, including the agenda for the Beijing meeting

Best,
Elisa

Elisa Cooper
Director of Product Marketing
MarkMonitor

208 389-5779 PH

From: owner-bc-gnso at icann.org [mailto:owner-bc-gnso at icann.org] On Behalf Of Ron Andruff
Sent: Thursday, March 07, 2013 1:30 PM
To: 'Smith, Bill'; 'bc - GNSO list'
Subject: RE: [bc-gnso] McCarthy/Franklyn comments on closed generics

Thanks for your contribution, Bill.  I appreciate your thinking outside the box.  To that end, I would highly recommend that we pursue the suggestion to invite all of the .BRANDS to our BC meeting in BJ and give that discussion significant time for all of us to better understand what we are discussing.  To be clear, this recommendation is not 'kicking the can down the road'; rather it is stepping up and addressing the issue as soon as we can.

I would also submit that we do the same regarding the matter of singular/plural confusingly similar.

Separately, I noticed that the IPC list has been previously copied on this thread. With this mail I am re-orienting this discussion exclusively to the BC list.

Kind regards,

RA

Ronald N. Andruff
RNA Partners, Inc.<http://www.rnapartners.com>
________________________________
From: Smith, Bill [mailto:bill.smith at paypal-inc.com]
Sent: Thursday, March 07, 2013 3:20 PM
To: Mike Roberts
Cc: Ron Andruff; bc - GNSO list; IPC Discussion List
Subject: Re: [bc-gnso] McCarthy/Franklyn comments on closed generics

Why is it that the BC, or any other constituency has to come up with *one* position? It's fairly clear that we will have a multiple opinions, perhaps as many as there are members. T my mind, that is a good thing and allows this community, the Internet one, to be vibrant, multi-colored if you will, as opposed to the black and white world of voting.

I agree with Ron that more discussion is required. I'm not sure I agree with a "minority" opinion since that suggests voting, and that should be anathema in a consensus-based organization.

I don't have a solution to the closed generic problem, and I'm not sure one will be say to develop. I will offer that for certain intractable problems, restating the problem in a different form can sometimes lead to an 80% solution to the original problem.

Perhaps such an approach could work here (and elsewhere within ICANN). While certainly guilty of the "look there's a dead horse let's beat it" mentality here at ICANN, I suggest we attempt to seek more creative ways to address some of these issues.

Some options:

Kick it down the road - Perhaps we aren't quite ready to decide this issue and therefore need more input. Is there harm in delaying decisions on "closed generics"? If so, who is harmed and to what extent?

Make it someone else's problem - Would WIPO be better suited to decide this issue? Perhaps the GAC since (some) governments are claiming their role at ICANN is too limited?

Create a market - Consider charging closed generics additional fees with those funds directed to some "beneficial purpose". Allow applicants to "bid". Perhaps funds would be used to support the IGF.

Happy to hear from others.

On Mar 7, 2013, at 10:14 AM, "Mike Roberts" <mmr at darwin.ptvy.ca.us<mailto:mmr at darwin.ptvy.ca.us>> wrote:
Ron -

Applaud your search for clarity.  There's only one possible response:

"What is it you don't understand about closed monopoly generic gTLDs?  The answer is no."

- Mike

On Mar 7, 2013, at 9:20 AM, Ron Andruff wrote:

Dear colleagues,

I hesitate to wade into the middle of a lawyer's debate (not being one), but there are some relevant points being made in this discussion and I would like to highlight that.  Both Phil and Mike have 'dogs in this fight' as they say, and for the record I do not.  It seems to me that even though the BC has some members who are applicants for generic words, the BC as a whole needs to have more discussion on this matter to get some clarity and sadly I, for one, am not seeing enough discussion on this list.  Generic words as TLDs is a BIG deal and it behooves us to flesh this out and take a position on it one way or the other (allowing for dissenting statements to the greater BC position).  To turn a blind eye is to ignore the elephant in the room, in my view.  Lack of action could also send a message that the members are so conflicted that the BC neglected its responsibility to bring the voice of small and big business to the ICANN debate on this matter.

With regard to Mike's comment: "...care much more about the problem of .sport and .sports, for example, coexisting as ICANN appears set to allow.  That seems to have a much higher likelihood of massive consumer confusion..."   I believe this issue needs to be pushed back both vigorously and rapidly, before it can gain a foothold.  Clearly, plurals and singular words are confusingly similar... one only need pronounce both words right after each other to hear how confusingly similar they are.

These are my two cents!  I welcome hearing other members' thoughts on these two critically important issues.

Kind regards,

RA

Ronald N. Andruff
RNA Partners, Inc.<http://www.rnapartners.com/>
________________________________
From: owner-bc-gnso at icann.org<mailto:owner-bc-gnso at icann.org> [mailto:owner-bc-gnso at icann.org] On Behalf Of Phil Corwin
Sent: Wednesday, March 06, 2013 3:15 PM
To: mike at rodenbaugh.com<mailto:mike at rodenbaugh.com>; 'bc - GNSO list'
Cc: 'IPC Discussion List'
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

Mike:

I appreciate the disclosure in the attachment that you represent "a number of applicants intending to operate 'Single-Registrant' TLD models as allowed by the terms of the Final Applicant Guidebook and Draft Registry Agreement".

While you know that I love to engage in vigorous legal and policy debate, I regret that I don't have the bandwidth today to respond to all your questions because of client work being done under deadline. I have no doubt this dialogue will continue, and others on the distribution list can of course join in, and I look forward to further engagement myself when my In Box is a bit less overflowing.

I would state that if .brands and closed generics are viewed as joined at the hip, my personal preference would be to deny the COC exemption to closed generics and allow .brands to amend their applications so that they are for non-generic terms (e.g., let Microsoft apply for single registrant operation of, for illustrative example,  .mswindows, Apple for .iApple, etc.) These are not multi-registrant gTLDs that need to attract intuitive type-in traffic, and to the extent they may be used for external as well as internal purposes they have the marketing clout to readily educate customers, suppliers, and Internet users regarding their proprietary right of the dot address.

I do note that while your attachment asserts that "ICANN has reopened a significant policy issue that was debated many years ago", neither it nor your e-mail address a central point I've made - that the registry agreement requires adherence to the COC, that the COC generally restricts self-registrations by the registry operator, and that the Section 6 exemption for single-registrant gTLDs requires an ICANN discretionary decision and application of a public interest standard. I know of no prior debate on what that public interest standard should be. Any comment on the relevance of the Code of Conduct to this discussion? I'm sure your clients must have been aware of it as they prepared their applications.

Best,
Philip

Philip S. Corwin, Founding Principal
Virtualaw LLC
1155 F Street, NW
Suite 1050
Washington, DC 20004
202-559-8597/Direct
202-559-8750/Fax
202-255-6172/cell

Twitter: @VlawDC

"Luck is the residue of design" -- Branch Rickey

From: owner-bc-gnso at icann.org<mailto:owner-bc-gnso at icann.org> [mailto:owner-bc-gnso at icann.org] On Behalf Of icann at rodenbaugh.com<mailto:icann at rodenbaugh.com>
Sent: Wednesday, March 06, 2013 2:03 PM
To: Phil Corwin; 'bc - GNSO list'
Cc: 'IPC Discussion List'
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

Phil,

My disclosure is contained at the head of my response to ICANN's request for public comments, attached.

You have not tried to answer some key questions.  Why should Microsoft get to keep .windows closed from the rest of the world?  What about the fact that almost all 'generic' words in fact are registered as trademarks?  What about the fact that generic terms have been exclusive domain name property since the beginning of the DNS, apparently with no adverse impact on either competition or consumer confusion?  Why should TLD policy be any different?

It has been very difficult for me, personally, to criticize Professor McCarthy.  He is quite simply the best teacher I have ever had, and taught me the core principles of trademark law on which I have built my career.  But he is wrong here, his reasoning is speculative and suspect on this important point, as I have tried to explain.  I would love to see his or your answers to my questions.

Mike Rodenbaugh
RODENBAUGH LAW
tel/fax:  +1.415.738.8087
http://rodenbaugh.com<http://rodenbaugh.com/>

From: Phil Corwin [mailto:psc at vlaw-dc.com]
Sent: Wednesday, March 06, 2013 10:12 AM
To: mike at rodenbaugh.com<mailto:mike at rodenbaugh.com>; 'bc - GNSO list'
Cc: IPC Discussion List
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

Mike:

With all respect, Prof. McCarthy's 7-volume treatise on Trademarks and Unfair Competition has been cited in more than 3,000 judicial opinions http://en.wikipedia.org/wiki/J._Thomas_McCarthy. So I would hesitate to agree that he is "obviously wrong" on this matter.  At a minimum, given all the time and energy that ICANN has devoted to respecting and protecting trademarks through such new gTLD RPMs as the TMC and URS, his expert view on the incompatibility of closed gTLDs with trademark law should be taken very seriously.

While I personally disagree that closed generics [which I regard as applications in which it is proposed that the registry operator be the sole registrant in a proposed string in which the applicant holds no trademark rights; that is, not a .brand] don't raise trademark law concerns, I do concur that competition issues also arise and may even be the primary issue. In that regard, as well as in regard to claims that the ICANN request for comments on closed generics somehow raises a new issue, sets a precedent for major changes in the Applicant Guidebook, or portends an unfair change in rules that applicants relied upon, I would respond that the need to obtain an exemption from the Code of Conduct (COC) for a closed registry has always been present, as well as the application of a public interest standard to the granting of such a waiver, and that applicants cannot now claim surprise or ignorance.

Section 2.14 of the Registry Agreement has always stated that a registry operator must comply with the COC set forth at Specification 9.

Section 1.b of the COC has always stated that the registry operator and its parents, affiliates, subcontractors, or other related entities can only register domains in the registry to a very limited extent - restricted to names that are reasonably necessary for the management, operations, and purpose of the TLD.

Section 6 of the COC provides for an exemption process whereby ICANN may, in its sole discretion and conditioned on its "reasonable satisfaction", allow the registry operator to register and maintain  all domain registrations for its own exclusive  use - if ICANN determines that "application of this Code of Conduct to the TLD is not necessary to protect the public interest". My understanding of the exemption clause is that it arose from the BC to accommodate .brands, without any contemplation that certain applicants would seek to lock up dozens of key dictionary words for their own exclusive use (in fact, their goal may be less to use the registries than to deny access to current and potential competitors).

So in my view this debate is not about creating a new definition for "closed generics" but whether the public interest requires ICANN to deny exemption requests for proposed non-.brand closed registries. (And I absolutely reject the sophistic and unconvincing arguments I have seen that an applicant can bypass the exemption process entirely  by simply declaring that its gTLD's "purpose" is to be for its own exclusive use - that would allow the exception to swallow the rule and render Section 6 a pointless nullity.)

My personal view is that closed generic gTLDs are inherently anti-competitive monopolies and that ICANN should adopt a position that denial of such exemption requests is necessary to protect the public interest. These applications are incompatible with the competition and innovation justifications made for the new gTLD program because they are motivated by anti-competitive self-interest and the goal of denying these strings as a platform for pro-competitive innovation to others. New gTLDs are the perfect platform for competitive vertical search - are competition, innovation and the public interest better served by a .book for Amazon's exclusive use and protection of its existing dominance, a .search for Google's exclusive use and protection of its existing dominance,  or by open gTLDs for those strings that can be utilized by thousands of innovative market entrants?

I further believe that such a position is in ICANN's best long-term interest, as well as the interest of all who want to preserve its multi-stakeholder model against governmental intrusion. While it is true that the competitive issues raised by closed gTLDs are the ultimate responsibility of national competition authorities, ICANN will do itself no favors if it approves closed generic gTLDs that subsequently require years of investigation, enforcement actions, and expenditure of human and financial resources (in an era of constrained public resources) by such authorities when the matter could have been avoided in the first place by adopting a responsible position of the public interest consideration for granting COC exemptions.

A final consideration is the potential spectacle of thousands of closed generic applications flowing into ICANN on the second round if it accommodates them in the first. Domain and marketing consultants will surely be advising the world's largest companies that if they don't file applications to lock up key dictionary words for their own  primary commercial activities that their competitors may well grab then and close them off. ICANN could well realize a $billion in application fees in the second round by marketing key words in the world's major languages for the purpose of locking them away rather than making them available to global Internet users. I for one find the prospect of selling off exclusive use of such words as if they were municipal  stadium naming rights to be crass and unseemly and, while in ICANN's financial interests, inconsistent with its responsibilities and role of managing the DNS in a manner consistent with the public good.

In closing, while I shall leave it to Professor McCarthy to decide whether to take offense and respond to your assertion that his comment letter constitutes an "apparent conflict of interest" because of Microsoft's sponsorship of the annual McCarthy Symposium, I am incredulous that he would make the statements contained in his comment letter if he did not fully subscribe to them. For the sake of full disclosure, while the views expressed above are my personal views, I am providing counsel to a new gTLD applicant that is in contention with a Google application for a closed generic (ICA, the client with whom I am generally associated and which I represent on the BC, did not have a consensus among its members on closed generics). For the sake of full disclosure, and especially given your assertion that Professor McCarthy's comments evidence a conflict of interest, will you disclose whether you are advising applicants for closed generics?

Regards,
Philip

Philip S. Corwin, Founding Principal
Virtualaw LLC
1155 F Street, NW
Suite 1050
Washington, DC 20004
202-559-8597/Direct
202-559-8750/Fax
202-255-6172/cell

Twitter: @VlawDC

"Luck is the residue of design" -- Branch Rickey

From: Mike Rodenbaugh [mailto:mike at rodenbaugh.com]
Sent: Wednesday, March 06, 2013 11:43 AM
To: Phil Corwin; 'bc - GNSO list'
Cc: IPC Discussion List
Subject: RE: [bc-gnso] RE: McCarthy/Franklyn comments on closed generics

Phil, thanks for sending around Prof. McCarthy and Prof. Franklyn's statement on so-called 'closed generic' TLD strings.  I have great respect for Prof. McCarthy; he taught me trademark law at USF in the early '90's and his treatise is a leading authority.  However, this statement is not persuasive.  The fundamental premise you quote is obviously wrong.

While trademark law, by definition, may prohibit trademark registration of generic terms, it does not and has never prohibited individuals from gaining exclusive property rights in generic terms.  There are millions of generic terms that are the subject of exclusive domain name property rights, i.e. chocolate.com<http://chocolate.com>, sex.com<http://sex.com>, etc.  Many countries recognize that chocolate.com<http://chocolate.com>, for example, can function as a trademark even for the service of selling chocolate, particularly after a period of exclusive use by which distinctiveness is acquired.  As you well know, there are many such trademark registrations in many jurisdictions.  Exclusive ownership has always been permitted in regards to domain names at all levels of the DNS - including the top level.  Why should there be any policy difference between TLDs and .com domains?  Though the US has been more conservative in granting trademark rights in domain names or TLD strings, no US law has ever sought to prohibit exclusive use of generic domain names, and many arguably generic words are registered as marks for related goods and services (as well as a few arguably generic TLD strings).  Indeed many TLD operators and prospective TLD operators have secured trademark registration in their TLD string, some in the U.S. and many more in Europe and elsewhere.

As Prof. McCarthy taught me and thousands of others, trademark law seeks to prevent confusion as to source of a good or service.  The type of confusion he and Prof. Franklyn cite in their statement on this issue has nothing to do with product source, and is purely speculative.  They say (and you quote):

"consumers may mistakenly believe they are using a gTLD that allows for competition, when in reality the gTLD is closed and the apparently competitive products are being offered by a single entity"

They are speculating, without citation to any evidence or authority, that consumers "may" be confused as to some aspect or quality of the TLD service, but that has nothing to do with confusion as to the source of that service.  They are speculating that the marketing of such TLDs will be confusing, when there is no factual basis whatsoever for such speculation.  Web users have had long exposure to generic domain names used by myriad businesses, including well-known brands, throughout the world for more than 20 years, with absolutely no confusion ever documented as far as I am aware.  That evidence ought to trump the blank speculation even of well-respected trademark academics.

Furthermore, they do not address why Apple Computer should get to own .apple or Microsoft should get to own .windows (among many other examples of 'generic' dictionary words that are trademarks, and that will be closed TLDs), and exclude anyone else from registering domains in that TLD, even if they want to refer to the fruit or to the glass building component.  They do not address how consumer confusion in that case would logically be any different than the consumer confusion they posit.

Finally, it must be noted that the annual McCarthy Symposium, probably not coincidentally held just a few days ago, counts on Microsoft as its major sponsor.  And of course Microsoft has become one of the most outspoken critics of so-called closed generic TLDs, quite curiously despite its own applications for .docs, .windows and other 'closed generic' TLDs.

Given this apparent conflict of interest, the blatantly faulty premise in its core reasoning, and the misguided speculation as to future consumer expectations that appears central to their argument, this one page statement leaves a lot of questions and is far from persuasive, imho.

This is not a trademark issue, but a competition issue.  It is also an issue of fairness given that closed business models have been accepted by the community since 2006, and many companies have invested heavily in reliance on the fact that such models are not prohibited by ICANN's rules.  All companies had the same opportunity to make such investments.  The primary voices arguing against these models now are surrogates for those who passed on the opportunity (and, curiously, Microsoft), those who are competing in contention sets with closed business models, and those who want to sell unrestricted domain names and fear disruption to the traditional domain name business model on which they have built their business.  Those patently self-interested concerns are not the sort of concerns that should make any difference to ICANN at this point in the new TLD program, or to anyone else in the world.

We should all care much more about the problem of .sport and .sports, for example, coexisting as ICANN appears set to allow.  That seems to have a much higher likelihood of massive consumer confusion than does the operation of closed TLDs.

Best,
Mike

Mike Rodenbaugh
RODENBAUGH LAW
tel/fax:  +1.415.738.8087
http://rodenbaugh.com<http://rodenbaugh.com/>

From: owner-bc-gnso at icann.org<mailto:owner-bc-gnso at icann.org> [mailto:owner-bc-gnso at icann.org] On Behalf Of Phil Corwin
Sent: Friday, March 01, 2013 4:29 PM
To: Steve DelBianco; bc - GNSO list
Subject: [bc-gnso] RE: Contention sets for new gTLDs

"Unbelievably, they did not consider the singular and plural versions of key words to be confusingly similar."

Unbelievable indeed.  How about .dumb and .dumber?

Meanwhile the leading trademark authority in the United States, Professor Thomas McCarthy,  has just filed a statement opposing closed generic gTLDs as being inconsistent with trademark law and its goals -- http://forum.icann.org/lists/comments-closed-generic-05feb13/msg00034.html --

"Trademark law in every country in the world forbids individuals to gain exclusive
property rights in generic names of products. One of the primary rationales for this rule is to
prevent a single person or company from gaining an unfair competitive advantage in the
marketplace. Private ownership of generic language is not consistent with free enterprise and
fair competition in an open economy. If ICANN were to approve closed, generic gTLDs, these
important goals would be undermined...

Transparency and consumer choice are goals of the trademark system of every country in
the world. In our view, these values are threatened by closed, generic gTLDs. Indeed, should
these types of new gTLDs be approved, consumers may mistakenly believe they are using a
gTLD that allows for competition, when in reality the gTLD is closed and the apparently
competitive products are being offered by a single entity. This would allow the owner of the
generic gTLD to gain exclusive recognition as the provider of a generic service, something that
is prohibited by Trademark law."

How will that reflect on ICANN and the new gTLD program?

Philip S. Corwin, Founding Principal
Virtualaw LLC
1155 F Street, NW
Suite 1050
Washington, DC 20004
202-559-8597/Direct
202-559-8750/Fax
202-255-6172/cell

Twitter: @VlawDC

"Luck is the residue of design" -- Branch Rickey

From: owner-bc-gnso at icann.org<mailto:owner-bc-gnso at icann.org> [mailto:owner-bc-gnso at icann.org] On Behalf Of Steve DelBianco
Sent: Friday, March 01, 2013 6:50 PM
To: bc - GNSO list
Subject: [bc-gnso] Update: Contention sets for new gTLDs

Wanted you all to see this.   I think it will reflect poorly on ICANN's expansion of TLDs.

ICANN hired an international expert panel to scour 1900 new TLD strings and determine which were confusingly similar, so they could be combines in the same contention set.

This is to ensure we don't delegate 2 TLD strings that would confuse Internet users because they are too similar.  I expected, for example, that the applications received for .hotel and .hotels would be in the same contention set, since it would be confusing for users to have both TLDs out there.  (It would increase the cost of defensive registrations, too, since hotels would have to buy domains in both TLDs.  )

After several months of careful study, ICANN's experts published their contention sets yesterday. (link<http://www.icann.org/en/news/announcements/announcement-26feb13-en.htm>)

They "identified" 230 "exact match contention sets" where multiple applicants sought the exact same string.

And they found just 2 "non-exact match contention sets"  (unicom and unicorm; hoteis and hotels )

Unbelievably, they did not consider the singular and plural versions of key words to be confusingly similar.

This means we will get new TLDs for both the singular and plural versions of keywords such as:

ACCOUNTANT ACCOUNTANTS
AUTO  AUTOS
CAR CARS
CAREER CAREERS
COUPON COUPONS
CRUISE CRUISES
DEAL DEALS
FAN FANS
GAME GAMES
GIFT GIFTS
HOME HOMES
HOTEL HOTELS
HOTEL HOTELES
KID KIDS
LOAN LOANS
MARKET MARKETS
NEW NEWS
PET PETS
PHOTO PHOTOS
REVIEW REVIEWS
SPORT SPORTS
TOUR TOURS
WEB WEBS
WORK WORKS

What are the implications for applicants?   Well, let's take an example.  The 2 Applicants for .GIFT just got a huge gift from ICANN when they were not placed in the same contention set as the 2 applicants for .GIFTS

One of the 2 .GIFT guys must prevail in their "singular" contention set.   They can then proceed to delegation, as they planned.  Or they can negotiate to be bought-out by the winning applicant from the plural contention set ( .GIFTS ).

In other words, many applicants dodged a bullet by escaping from contention with their singular/plural form competitors.   My guess is they want to explore ways to monetize their good fortune.

 --
Steve DelBianco
Executive Director
NetChoice
http://www.NetChoice.org<http://www.NetChoice.org/> and http://blog.netchoice.org<http://blog.netchoice.org/>
+1.202.420.7482

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