ICANN suspends Freenom for cybersquatting competitors' brands

Freenom.com, the provider of registry services that has built its business model on partnering with tiny or developing countries such as Tokelau (‘.tk’), Mali (‘.ml’), Gabon (‘.ga’), the Central African Republic (‘.cf’) and Equatorial Guinea (‘.gq’) and offering largely free domain name registrations, has had its registrar accreditation suspended by the Internet Corporation for Assigned Names and Numbers (ICANN) for cybersquatting the brands of several of its competitors. The company's registrar arm, OpenTLD BV, which is run out of the Netherlands, came under the scrutiny of ICANN after losing in two UDRP cases brought by rival registrars. 

Freenom is no stranger to controversy. It has been labelled as a hub for phishing and malware, as well as being criticised for spuriously promoting its Tokelau and Mali TLDs (‘.tk’ and ‘.ml’) to the citizens of Turkey and Malaysia.

It offers free use of domain names in the various TLDs it manages, provided registrants have a website with content to which they can point their domain name. OpenTLD CEO Joost Zuurbier has, in the past, emphasised the philanthropic motivations behind the registrar's business model, saying that "free domains make a lot of sense in countries where the banking penetration is in the single digit range", and that they "are an important catalyst that directly enables local content creation and internet entrepreneurship".

However, it is worth noting that the users of the free domain names have no actual ownership rights over these domain names, with Freenom being the actual legal owner of the domain names and appearing as such in the WHOIS. For this reason, most brand owners opt for the paid equivalents in order to protect their trademarks in the TLDs concerned.

In theory, the content of the websites linked with free domain names is prohibited from including such things as adult entertainment, drugs, viruses/spyware or even domain name parking, but this must be a difficult restriction for the registrar to police. Indeed, it seems that the free domains policy has resulted in Freenom becoming at once the largest country-code domain registry operator in the world, whilst also racking up some of the highest levels of phishing and malicious registrations of any of the TLDs.

OpenTLD's most recent brush with controversy began in May when two UDRP decisions ordering transfer were handed down on the same day. One of these cases, brought by the registrar Key Systems against OpenTLD and its CEO, Joost Zuurbier, concerned the domain names ‘rrpproxy.me’ and ‘key-systems.cc’. In this case, the panellist reiterated the complainant's observation that "the disputed domain names resolve to websites on which the respondent attempt [sic] to entice Key-Systems customers and RRPproxy users to switch to Freenom services". It seems that OpenTLD had also bought the trademarks as Google AdWords, meaning that if one were to search Google for "RRPproxy", they would be directed to an advert linking to ‘www.rrpproxy.me’. In fact, some of the infringing domain names blatantly listed their registrant as "OpenTLD BV AdWords account".

Among its infringing portfolio, OpenTLD also held the domain names ‘resellerclub.tk’, ‘resellbiz.biz’, ‘godaddy.cf’, ‘resello.ws’ and ‘netearthone.biz’, the last of these domain names being the subject of the second UDRP. At the time of writing, some of the infringing domain names have now either been deleted or transferred to the brand owners, but some are still in the ownership of OpenTLD and there are possibly others registered under OpenTLD's privacy service.

In the letter from ICANN handing down the suspension, the Internet’s governing body found that:

"OpenTLD has engaged in a pattern and practice of trafficking in or use of domain names identical or confusingly similar to a trademark or service mark of a third party in which the registered name holder has no rights or legitimate interest."

Pursuant to the letter, ICANN suspended OpenTLD from creating new registrations or initiating inbound transfers for 90 days, pursuant to the Section 5.7 suspension clause of its Registrar Accreditation Agreement.

The ICANN letter sets out a nine-point remediation plan that OpenTLD must follow in order to avoid losing its accreditation. This includes such things as handing over a list of its entire portfolio of trademark infringing domain names, providing details of all the resellers and privacy services it works with and submitting a "remediation plan for OpenTLD to collaborate with the trademark or service mark owner(s) to transfer or cancel all domains in the domain portfolio".

The notification is significant in that this is the first time that ICANN has suspended a registrar for cybersquatting its competitors' brands. Freenom's failure to comply with ICANN's demands would have such monumental consequences for it that one can only imagine that it will find ways of complying by the October 6 deadline. 

David Taylor and Cindy Mikul, Hogan Lovells LLP, Paris