<html>
<head>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; font-size: 14px; font-family: Consolas, sans-serif;">
<div>
<div style="color: rgb(0, 0, 0); font-family: Consolas;">
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 10.5pt; font-family: Arial, sans-serif;">At the most recent IOT meeting, David raised the cost proposal from the IPC’s comment, and ICANN committed to providing some reaction to that proposal.</span><span style="font-size: 10.5pt;"><o:p></o:p></span></p>
</div>
<div style="color: rgb(0, 0, 0); font-family: Consolas;">
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 10.5pt;"> </span></p>
</div>
<div style="color: rgb(0, 0, 0); font-family: Consolas;">
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 10.5pt; font-family: Arial, sans-serif;">In its public comment submission, t</span><span style="font-size: 11pt; font-family: Arial, sans-serif;">he IPC proposed that the following language be included in Section 15 of the Update to
the ICDR Supplementary Procedures (Costs):</span><span style="font-size: 10.5pt;"><o:p></o:p></span></p>
</div>
<div style="font-family: Consolas;">
<div style="color: rgb(0, 0, 0);">
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;"> </span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt 0.5in; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">Nothing in these IRP Supplementary Procedures is intended to supersede ICDR Rules, Article 20(7) and Article 21(8), including the right to request an interim order allocating costs arising from
a party’s failure to avoid unnecessary delay and expense in the arbitration.</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
</div>
<div>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt;"> </span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">ICDR Rule, Article 20(7) provides as follows:</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;"> </span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt 0.5in; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">The parties shall make every effort to avoid unnecessary delay and expense in the arbitration. The arbitral tribunal may allocate costs, draw adverse inferences, and take such additional steps as
are necessary to protect the efficiency and integrity of the arbitration.</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt 0.5in; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;"> </span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">ICDR Rule, Article 21(8) provides as follows:</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;"> </span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">In resolving any dispute about pre-hearing exchanges of information, the tribunal shall require a requesting party to justify the time and expense that its request may involve and may condition
granting such a request on the payment of part or all of the cost by the party seeking the information. The tribunal may also allocate the costs of providing information among the parties, either in an interim order or in an award.</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt;"> </span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">Our first matter of consideration of this proposal is for consistency with the Bylaws. ICANN Bylaw 4.3(r) provides, in relevant part:</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;"> </span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt 0.5in; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">Except as otherwise provided in Section 4.3(e)(ii), each party to an IRP proceeding shall bear its own legal expenses…. The IRP Panel may shift and provide for the losing party to pay administrative
costs and/or fees of the prevailing party in the event it identifies the losing party’s Claim or defense as frivolous or abusive.</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt 0.5in; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;"> </span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt; font-family: Arial, sans-serif;">This language is identical to the language proposed in Section 15 of the draft Update to the ICDR Supplementary Procedures.</span><span style="font-size: 11pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt;"> </span></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<b><span style="font-family: Arial, sans-serif;">ICANN</span></b><b><span style="font-size: 11.5pt; font-family: Arial, sans-serif;">’s </span></b><b><span style="font-family: Arial, sans-serif;">Analysis:</span></b><o:p></o:p></p>
<p class="MsoNormal" style="color: rgb(0, 0, 0); margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<span style="font-size: 11pt;"> </span></p>
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<i><span style="font-family: Arial, sans-serif;">A provision allowing for interim orders on cost shifting based on a failure to avoid unnecessary delay and expense in the arbitration (as contemplated in Article 20(7)) does not seem to be aligned with the Bylaws
limitation that cost shifting in the IRP occurs only to the losing party and only if there is a determination that the claim was frivolous or abusive. Similarly, the Bylaws that create the IRP do not contemplate cost shifting in discovery<span style="color: rgb(31, 73, 125);"> </span>(as
contemplated in Article 21(8)), as that is similarly not tethered to which party prevails or a finding that a claim or defense was frivolous or abusive.</span></i></p>
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<i><span style="font-family: Arial, sans-serif;"><br>
</span></i></p>
<p class="MsoNormal" style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif;">
<br>
</p>
</div>
</div>
</div>
<div style="color: rgb(0, 0, 0);">
<div>— </div>
<div>
<div>Samantha Eisner</div>
<div>Deputy General Counsel, ICANN</div>
<div>12025 Waterfront Drive, Suite 300</div>
<div>Los Angeles, California 90094</div>
<div>USA</div>
<div>Direct Dial: +1 310 578 8631</div>
</div>
</div>
</body>
</html>