The International Corporation for Assigned Names and Numbers (ICANN), the entity that manages allocation of the internet’s top-level domains (TLD), has been sued for anti-trust violations arising out of its recent decision to expand its stable of TLD assignments to the .XXX domain name. Manwin Licensing International S.A.R.L. v. ICM Registry, LLC, 11-cv-9514 (C.D.C.A., filed Nov. 16, 2011).
Plaintiff’s chief allegation is that ICANN has conspired with ICM Registry — ICANN’s official registrar for the .XXX TLD — to force companies to pay substantial fees to prevent competitors from registering their trademark under the triple-X TLD. For example, companies can block competitors from registering their trademarks under the .XXX TLD for $150 which plaintiff alleges is artificially high.
At this point, I’ll engage in a bit of self-back-patting and point to my Business Insider article back in May (in this case aptly titled, “New Domain Name Options Could Spell Disaster for Trademark Owners”) where I questioned whether ICANN’s mechanism for protecting trademark owners in the event of a TLD expansion would be fiscally feasible for smaller businesses:
Under the Clearinghouse plan, new gTLD registries would have to offer a pre-launch period during which registered trademark rights holders will have the opportunity to register their existing names in the new gTLD prior to general registration. Pritz added that “a Trademark Claims service will notify rights holders of domain name registrations that match marks in the Clearinghouse for a period of time at the beginning of general registration.”
While ICANN’s protection mechanisms seem reasonable for wealthy companies (read: Google and Facebook), smaller business would worry about their financial capacity to buy new domain registrations whenever a new, potentially infringing gLTD is offered by the registries.
It seems that plaintiffs do not think that ICANN can sufficiently protect against trademark infringement or, otherwise, the current ICANN protection mechanism takes unfair advantage of what is essentially a government-granted monopoly.
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