A Test of ICANN’s Public Safety and Unfair Competition Mechanism as a Remedy in Consumer Protection Disputes with Registry Operators:
Brian J. Winterfeldt
Co-Head of Global Brand Management and Internet Practice, Mayer Brown LPP
David Winner Rome
Associate, Mayer Brown LLP
ICANN’s new generic top-level domain (“gTLD”) program allows organizations to apply for and operate Internet registries (the portion of an Internet domain name to the right of the “dot,” such as .COM). This program has complicated efforts to protect goodwill and has broadened brand protection concerns. Although the program offers some promotional benefits, and hundreds of brand owners have applied to operate their own gTLDs, certain generic TLDs pose problems. In particular, third parties that are not rights holders may register names corresponding to brand owners’ trademarks in these new TLDs. This may require brand owners to devote additional resources to domain name enforcement. In addition, operators of these new gTLDs threaten to harm consumers and brands alike through deceptive practices, which may require brand owners to engage in an entirely new category of disputes.
The ultimate aim of abusive registry operators is to extract exorbitant fees from brand owners who are highly motivated to protect their marks. Of the more than 1,200 new gTLDs, many appeal to consumers of particular categories of products or might result in tarnishment or blurring when used in connection with specific marks. Some registry operators quickly realized that these exigencies, combined with many brand owners’ unfamiliarity with new gTLDs, make brand owners easy marks for fraud, deceit or simply unfair practices.
One such operator, Top Level Spectrum, Inc. (“TLS”), is alleged to have used its .FEEDBACK gTLD to engage in a pattern of misconduct intended to exploit brand owners by directing their consumers to false or misleading information. TLS is further alleged to have sought extortionate fees from brand owners and to have tricked their domain name management teams into paying for unwanted services.
To address this misconduct, a coalition of brand owners has opted to explore a novel form of alternative dispute resolution. The coalition—which includes Adobe Systems Inc., the American Apparel and Footwear Association, Best Buy Co., the Darden Corporation, Facebook, Inc., Kate Spade, LLC, Levi Strauss & Co., Little Caesar Enterprises, Inc., MarkMonitor Inc., Panera, LLC, Tailored Brands, Inc., the United States Telecom Association and Verizon Communications, Inc.—has submitted a complaint under ICANN’s Public Interest Commitment Dispute Resolution Procedure (PICDRP).
The coalition argues that TLS violated its agreement with ICANN by failing to publish or abide by clear policies in operating the .FEEDBACK registry. As of this writing, ICANN has accepted the coalition’s complaint and is constituting a panel to evaluate it. Based on publicly available information, this is the first time that ICANN has constituted a panel for a PICDRP complaint. This groundbreaking proceeding will provide insights on how ICANN will balance consumer protection and the rights of brand owners with the interests of contracted parties such as TLS. Because the PICDRP focuses on contractual commitments to the public made by all registry operators, it will also be an informative look into the mechanics of how ICANN addresses allegations concerning fraud and misconduct perpetrated by registry operators.
Specification 11 of ICANN’s standard Registry Agreement details the “Public Interest Commitments” (“PICs”), which require that registry operators, inter alia, forbid registrants from engaging in abusive conduct including trademark infringement, fraudulent or deceptive practices, and activity otherwise prohibited by law. They also require that registry operators “operate the TLD in a transparent manner consistent with general principles of openness and non-discrimination by publishing and adhering to clear registration policies.”
In the case of TLS, deceit, obfuscation and duplicity are quite clear within the conduct alleged in the PICDRP complaint. The coalition alleges that TLS prevented famous brands from registering domain names containing their marks. Specifically, it alleges that TLS reserved those terms during or prior to the priority sunrise registration period. This denied brand owners the opportunity they would ordinarily have to register such domains before the public. TLS’s alleged reservation of these names did not comport with any of its published policies. TLS’s alleged reservation would represent a targeted, discriminatory act against brand owners as a class of potential domain name registrants. TLS also allegedly repeatedly adopted and changed policies without publishing any clear articulation of those changes. For example, it demanded a $5,000 “trademark claims” fee from brand owners seeking early registration for domains containing their marks and additional fees for redirecting .FEEDBACK domain names to brand owners’ websites.
Meanwhile, domain names containing trademarks were being registered and misused by third parties allegedly affiliated with TLS. These domain names would redirect to websites hosted on TLS’s “Feedback SaaS” platform. The websites were populated with inaccurate contact information and out-of-date reviews from other services that had been postdated to make the websites appear active. The threat of consumers being misdirected or misinformed served as additional incentive for brand owners to pay TLS’s fees. These third parties also allegedly began registering .FEEDBACK domain names in the name of brand owners without authorization. TLS would then issue confusingly worded confirmation emails to unwitting technical contacts associated with the brands’ official .COM domain names. These emails asked the technical contacts to confirm the brand owner’s registration of a .FEEDBACK domain name. This phishing scheme allegedly resulted in some brand owners paying TLS for services they never requested.
ICANN’s ability to hold bad actors accountable is crucial for preventing registry operators from gaming their position in the Domain Name System. Such domains as .FEEDBACK present substantial challenges to brands because they prevent brands from effectively addressing very real threats of infringement and dilution. TLS’s alleged behavior is extreme, but a clear reprimand from ICANN might deter lesser violations. Overall, this PICDRP is an opportunity for ICANN to underscore that registry operators bear too much responsibility for the health, safety and integrity of the domain name system to engage in discrimination, exploitation, fraud and other misconduct.
THE BRAND PROTECTION PROFESSIONAL | MARCH 2017 | VOLUME 2 NUMBER 1
2017 COPYRIGHT MICHIGAN STATE UNIVERSITY BOARD OF TRUSTEES