ICANN on brand 'shakedowns': you need to give us the power to help you

At a joint session of the Commercial Stakeholders Group and the ICANN board at this week’s ICANN meeting in Argentina, discussion focused on new gTLD pricing practices – specifically, premium pricing policies and the higher levies charged by some registries on brand-related terms. While feeling the pain of trademark owners, the message from ICANN was clear - we can’t do anything about it until you empower us.

One of the first speakers in the session was Adobe Systems’ J Scott Evans, who argued that premium pricing policies threaten to undermine the justification for the new gTLD expansion, stating: “We were told as a business community that one of the reasons we needed an expansion of the DNS was because there were no good, commercially available names that were short enough to use. Everyone was having to use long complicated domains, and so we needed to give more real estate so that innovators and SMEs could easily join the ecosystem. But the creation of premium names means that all the short snappy names now are hugely expensive, and so SMEs are being thwarted by the pricing models… I just think that there are a lot of issues that affect the reputation of this organisation and I'm not sure how we, as a community, are going to deal with it.”

Widening the remit to the aggressive sunrise pricing targeted at big brands, Susan Kawaguchi, domain name manager at Facebook, outlined the company’s experience: “We have definitely been the target of differential pricing and are finding it hard to deal with the fact that, in a landrush, you may be able to register a name for $100 but, in a sunrise, we have seen pricing set between $35,000 and $1,000. For ‘facebook.top’ it was initially a $4,500 dollar sunrise period fee, but then they added another $30,000 to the registration. When we pushed back they said ‘no that’s a mistake’ – but I am sure they would have accepted our $35,000 if we had paid it. The latest example was with ‘.love’. They valued ‘instagram.love’ higher than ‘facebook.love’, but both were outrageous in my opinion – $17,000 plus a $350 registration fee for ‘instagram.love’, with ‘facebook.love’ almost $9,000. So to register two domain names with one registry would have cost us almost $27,000. The business community then did some work and we spoke to a blogger – and lo and behold, I received an email yesterday saying that it is now $450 per domain name.”

The Facebook experience suggests that trademark owners can achieve some success on pricing if they push back but this does place a burden on them to do so. Kawaguchi added that differential pricing is also having a negative impact on registrants: “For ‘instagram.top’ we were asked for almost $5,000 so we let that go to landrush. However, someone else grabbed it before we did, so we filed a URS. This was cheaper than the $4,500 registration but the respondent complained that it was unfair that we didn’t register it but allowed them to, and then filed legal proceedings against them. So it’s harmful to the individual registrant – they don’t always know what a trademark is but we have set up a system where it is prohibitive to protect a trademark and so we instead take legal action against individuals.”

Summarising the brand owner position, MarkMonitor’s Elisa Cooper lamented: “We would like the practice to stop. We would like to have not have this kind of differential pricing and not have brands forced into paying a higher price than someone in the general public in perpetuity. But what can we do about that? Can we only do something about it in the next round?”

The answer seems to be that it is indeed something that can only be addressed in future if appropriate policies are developed, with ICANN’s president and CEO Fadi Chehadé stating: “I just would like to say that individually, we definitely understand that you're frustrated and these are not good practices. But what to do about it is the question. ICANN is not a regulator. We have a contract and when you helped us develop the policy for contracts, you very clearly told us to stay out of pricing. If you'd like us to get back into managing prices or practices around pricing, then this is a new policy. You need to bring the issue to the GNSO and start the process. I don’t currently have the levers to help you - you need to go and build me a policy.”

Turning specifically to the ‘.sucks’ string, which the Intellectual Property Constituency previously labelled a ‘shakedown’ for charging a recommended $2,499 for brand-related registrations (with the prospect that consumers could secure the same domain names for as little as $9.95 under its subsidised consumer advocate programme), Greenberg Traurig’s Marc H Trachtenberg argued that ICANN does have the remit to take action: “I would say that I think there is a mechanism available in the registration agreement. Specification 11 requires registry operators to operate the TLD in a transparent manner consistent with the general principles of openness and non-discrimination by establishing, publishing and adhering to clear registration policies. I would argue that the practices of ‘.sucks’, and now other registries that appear to be following suit, violate that obligation in the following ways. First, the frequent changing of registration policies and pricing. Second, discriminatory treatment - in other words, pricing - for trademark owners, and specifically those that chose to utilise the rights protection mechanisms which were agreed to by the community. And third, a registry registration policy based purportedly on a subsidised model for consumer registration, and a third-party consumer complaints platform where (a) there's no party actually ready to subsidise these and there's no realistic likelihood that any such party will be found and (b) there's no third-party identified to operate this third-party complaint platform and no details on that. So I think these are just three examples where Specification 11 is a mechanism available to ICANN to address these concerns.”

Whether ICANN chooses to utilise Specification 11 remains to be seen. Summarising the session, Brian J Winterfeldt, head of internet practice at Katten Muchin Rosenman, states: “It is likely that this issue will be addressed through the planned new gTLD subsequent rounds policy development process, and studied further through the new gTLD program review, RPM review, and Affirmation of Commitments review on Competition, Consumer Choice and Consumer Trust.”

For now, then, brand owners are left to push back against registry pricing on an ad hoc basis. 

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