OpenTLD's registrar accreditation suspended after arbitration panel rules in favour of ICANN

International

Earlier this year OpenTLD BV had its Internet Corporation for Assigned Names and Numbers (ICANN) registrar accreditation suspended by the ICANN compliance department after losing two Uniform Domain Name Dispute Resolution Policy cases which were filed against it by rival registrars. In response to this, OpenTLD started arbitration proceedings seeking to overturn ICANN's suspension of its accreditation. The arbitration panel recently ruled in favour of ICANN and, as a result of this, OpenTLD's ICANN registrar accreditation has now been suspended for 90 days.

In its ruling, the panel found that, contrary to OpenTLD's claims, ICANN did not act in an arbitrary manner in suspending OpenTLD's registrar accreditation. Indeed, due to the unique circumstances presented by OpenTLD being the first ever registrar to be found in breach of Section 5.5.2.4 of the ICANN Registrar Accreditation Agreement (RAA), ICANN's actions in notifying OpenTLD of the breach and subsequently suspending its registrar accreditation were entirely justified.

The panel found that ICANN did provide notice of suspension in a timely manner and in line with Section 5.7.2 of the RAA which provides:

"Any suspension under Subsections 5.7.1 will be effective upon 15 days’ written notice to the registrar, with the registrar being given an opportunity during that time to initiate arbitration under Subsection 5.8 to determine the appropriateness of suspension under this agreement."

Additionally, the panel also found OpenTLD's arguments that it never received any of ICANN's initial email communications regarding the investigation into the breaches of the RAA to be lacking merit. ICANN had clearly demonstrated that OpenTLD's mail server had received these email communications and thus ICANN had fulfilled its obligations under Section 7.6 of the RAA whereby written notice will be "deemed to have been properly given when […] delivered by electronic means followed by an affirmative confirmation of receipt by the recipient’s […] email server."

Addressing the important question of whether OpenTLD's continued operations as an ICANN accredited registrar posed a threat to consumers and to the public interest, the panel unequivocally found that OpenTLD's conduct did indeed constitute just such a threat.

In a series of damning statements, the panel set out its reasoning for why it believed OpenTLD should have its registrar accreditation suspended until it could remedy the breaches of its RAA. The panel had:

"little doubt that the multiple abusive name registrations […] formed part of a broad concerted effort by OpenTLD calculated to deliberately divert name registration business, otherwise destined for competing domain name registrars […], to OpenTLD instead."

The panel found that the "nine separate abusive domain name registrations […] clearly manifest the same abusive pattern of use". As a result of this, the panel determined that OpenTLD's conduct was detrimental not only to the trademark holders who were cybersquatted, but also to consumers and the general public.

In conclusion, the panel found that OpenTLD had not taken sufficient remedial action to prevent such actions from happening again and that what steps and undertakings it had made since the initial suspension by ICANN did not merit a stay of the suspension.

As a result of this, OpenTLD's ICANN registrar accreditation has now been suspended until November 24 2015. This means that OpenTLD will be unable to register any new gTLD domain names or accept any transfers of gTLD domain name registrations to its accreditation during the suspension.

As mentioned previously, this is the first time an ICANN-accredited registrar has been suspended under the Section 5.5.2.4 of the RAA. ICANN is to be commended for taking swift action against such a clear breach of the RAA. What makes this particular case so extraordinary was the choice of OpenTLD to challenge ICANN's compliance request and subsequent suspension notification, rather than taking action to cure such obvious breaches of the RAA. If OpenTLD's registrar accreditation was so critical to its overall business model, as it claimed, it would clearly have been better advised to focus its energies on curing its breaches of the RAA, rather than the ultimately futile challenge to the suspension via arbitration proceedings.

In order to avoid the cancellation of its registrar accreditation, OpenTLD will now have to demonstrate to ICANN's compliance department that it has taken significant steps to prevent such a situation from occurring again.

This unique case shows that ICANN's compliance department is not afraid to enforce the terms of the RAA. Importantly, it should also serve as a salutary lesson to all registrars who have executed the RAA and their obligations to ICANN, consumers and the public interest.

David Taylor and Daniel Madden, Hogan Lovells LLP, Paris

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