[gnso-rpm-wg] TMCH review objectives

Scott Austin SAustin at vlplawgroup.com
Fri Sep 23 19:24:42 UTC 2016

I am reluctant to weigh in where there is a law professor present (especially from alma mater [L'84]), but I am concerned that the term "price" is the wrong term to focus on in this context as it is a hot button word that policymakers tend to shy away from, as in price fixing or price setting (or becoming the domain price arbitration board as UDRP respondents are fond of using) and that in a forum such as this we should stop talking to avoid violating some phantom business judgment rule.
The real issue is that every gTLD has been granted a monopoly of sorts and each second level domain they have to offer has a certain level of economic utility to be realized. It seems to me we are trying to communicate and clarify, comments and proposed provisions that articulate and support the market for these domains. But there may be more than one market.
For the business owner who has tied their reputation for quality and consumer goodwill to a term or "mark" the new domain may represent a market to expand their Internet reach to more consumers. Alternatively it may only be a market for an additional expense to deny a potential cybersquatter from using the domain/mark to divert or confuse consumers and reduce the rightsholder's revenues.
Another market to consider is that for cybersquatters who may be playing an "enforcement lottery" given the large number of new gTLDs, playing the odds that if the costs to the rightsholders become so great as to outweigh the perceived benefits, that lack of shielding can be taken advantage of and cybersquatters will perceive little risk in purchasing domain/marks of smaller businesses without the resources to actively search for infringement and cybersquatting.
And rightsholders have to assess these risks and probabilities without any real data at "sunrise", whether the new gTLD will be a hit with consumers (.guru?) or a flop (name withheld by request). It seems to me that this is part of the complex calculus we are trying to grapple with as we try to keep the markets/monopolies from being warped or abused, one case being premium names  shown by your example, as well as "reserved" names held back until the initial market for a registry's SLDs is established. Finally there is the registry's own perception of its market, who are its best customers and how to attract them so the registry can stay in business with a new and untested product.
My apologies if this is a bit prolix, but I didn't want the discussion to be overshadowed or muted based on the stigma sometimes attached to "price".
Best regards,

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From: gnso-rpm-wg-bounces at icann.org [mailto:gnso-rpm-wg-bounces at icann.org] On Behalf Of Phil Corwin
Sent: Friday, September 23, 2016 11:33 AM
To: Silver, Bradley; Rebecca Tushnet; gnso-rpm-wg at icann.org
Subject: Re: [gnso-rpm-wg] TMCH review objectives

Thanks for your input, Bradley and Rebecca.

Here is my personal view at this time, subject to further discussion with the other Co-Chairs and the WG members-

The TMCH is a means to an end. It is a database of trademarks meeting certain minimum levels of verified quality. While the TMCH is regarded as a RPM it provides no protection in and of itself - the protections come from two related RPMs, Sunrise Registrations and the TM Claims Notice (recognizing that certain other private protection measures, such as Donuts' DPML, are also tied to TMCH registration).

The protection offered by Sunrise Registration is to give rights holders' the ability to secure a domain in a new gTLD that is an exact match of their TM prior to general availability of registrations, and thereby eliminate the ability of a third party with no legitimate rights or interest to secure the same domain for infringing purposes. If that domain name has been designated as a Premium one by the registry operator then pricing can clearly have some practical impact on the availability of the protection, with the degree of impact varying with the price point.

Taking an extreme hypothetical, if initial registration of a particular Premium domain  were set by the RO at $50,000 then the rights holder might naturally feel that the protection held out by the availability of Sunrise registration has been substantially diluted by the pricing, and decide that it would be prudent to wait for general availability and try to secure the domain then, or decline to register at all and simply file a URS or UDRP action if another party secures the domain and uses it for infringing purposes. And, as we know, the feeling among rights holders that Sunrise Registrations are being used to unreasonably exploit them increases when there is a very wide difference between the price set for the Sunrise period versus that in  general availability, or if the Premium domain is a unique non-dictionary term associated with a company or brand.

But is pricing within the remit of our WG, and if not is it within the remit of the parallel Subsequent Procedures WG?

I will not answer the latter question because we have members and Co-Chairs of that WG participating in this one and they are quite capable of sharing their views. My own view is that it is probably not within the remit of this WG to analyze or change the "hands off" pricing policy established for the new gTLD program, which has led to a very broad spectrum of registry pricing and business models (it seems to be more of a subsequent procedures program and applicant guidebook matter, rather than a direct RPM concern) .

However, I think it  may well be within the remit of this WG to analyze and comment upon the impact of certain registry's Sunrise pricing models on the effectiveness of Sunrise Registrations as an RPM, and it may also be within the remit of this WG to recommend a system through which rights holders can register concerns about certain registry pricing practices that dilute the RPM's effectiveness (how the RO or ICANN should respond to such concerns is a separate issue).

I hope those remarks spur some further discussion within this WG.

Best to all, Philip

Philip S. Corwin, Founding Principal
Virtualaw LLC
1155 F Street, NW
Suite 1050
Washington, DC 20004

Twitter: @VlawDC

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

From: gnso-rpm-wg-bounces at icann.org<mailto:gnso-rpm-wg-bounces at icann.org> [mailto:gnso-rpm-wg-bounces at icann.org] On Behalf Of Silver, Bradley
Sent: Friday, September 23, 2016 11:00 AM
To: Rebecca Tushnet; gnso-rpm-wg at icann.org<mailto:gnso-rpm-wg at icann.org>
Subject: Re: [gnso-rpm-wg] TMCH review objectives

I would add that the question of pricing feeds into the concept of effectiveness, because if the TMCH is serving as a database for registries to target brand owners for higher pricing based on the value of their brands, then this is antithetical to the TMCH's primary goal to provide protection for verified right holders.

From: gnso-rpm-wg-bounces at icann.org<mailto:gnso-rpm-wg-bounces at icann.org> [mailto:gnso-rpm-wg-bounces at icann.org] On Behalf Of Rebecca Tushnet
Sent: Friday, September 23, 2016 10:26 AM
To: gnso-rpm-wg at icann.org<mailto:gnso-rpm-wg at icann.org>
Subject: [gnso-rpm-wg] TMCH review objectives

Hello, all.  On the last WG call, concerns about pricing of domain names during the Sunrise Period arose. This led to a question of whether pricing is within the remit of this WG - and the broader question of what the purpose of our TMCH review is.  There seemed to be a desire to focus on the TMCH's effectiveness. The predicate question, then, is: effectiveness at what?  Here are some suggestions for discussion: (1) minimizing the cost of operating the system for all concerned; (2) minimizing the number of actions that ultimately need to be brought against infringing registrants; (3) minimizing the number of noninfringing registrants whose legitimate uses are blocked or deterred.  If the system is reasonably balancing those objectives, I suggest, then it is effective; potential changes should be directly related to improving performance on one or more of these metrics without unduly hampering the others.

Rebecca Tushnet

Rebecca Tushnet
Georgetown Law
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