The ICA has just submitted a formal request to Mr. Frank Fowlie, ICANN Ombudsman, requesting an immediate investigation of the non-compliance of the Implementation Recommendation Team (IRT) with applicable provisions of ICANN’s Bylaws. The IRT was created by a March Resolution adopted by the ICANN Board during its Mexico City meeting, and was charged with proposing “solutions” to the concerns of trademark holders. Unfortunately, the IRT has chosen to operate in a non-transparent manner that unfairly excludes meaningful participation by professional domain name registrants who are most likely to be affected by its recommendations. Further, it is becoming clear that the IRT is in significant part an expedited, backdoor process for proposing and implementing major changes in second level dispute procedures that will undermine and displace the UDRP and thereby substantially diminish the procedural and substantive rights it presently affords to good faith domain registrants. Further, there is a high likelihood that any such changes in dispute procedures implemented in the context of new gTLDs will quite probably migrate in short order to incumbent gTLDs, including .com.
The ICA will continue to monitor all ICANN proceedings that may have impact upon its members and to intervene when their legitimate interests are threatened. We will advise our members as soon as we receive a substantive response from the ICANN Ombudsman.
The text of the request is below —
Attorneys at Law
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-1701
202-347-6875
Philip S. Corwin, Partner
pcorwin@butera-andrews.com
By E-Mail
April 21, 2009
Mr. Frank Fowlie, Ombudsman
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601
Dear Mr. Fowlie:
I am writing to you in my capacity as Counsel to the Internet Commerce Association (ICA). ICA is a not-for-profit trade association representing the direct search industry. Its membership is composed of domain name registrants that invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN itself. The ICA is an International Member of ICANN’s Commercial and Business Constituency and presently has more than 120 members located in the United States and thirteen other nations.
As professional domain name investors and developers, ICA members have a strong interest in the maintenance of robust procedural and substantive due process rights for registrants in the Uniform Dispute Resolution Policy (UDRP) so as to uphold the legitimate expectations of good faith registrants that their valuable domains will be protected from reverse domain name hijacking and other complainant abuses.
It is the belief of the ICA that the Implementation Recommendation Team (IRT) created pursuant to an ICANN Board Resolution adopted on March 6, 2009 is not operating in accordance with the fairness and transparency standards articulated in ICANN’s Bylaws. We hereby request that you immediately conduct an investigation of this matter and issue a public report on it in your capacity as ICANN Ombudsman. Further, we believe that the IRT should be required to come into full compliance with these standards and, failing that, ICANN should withdraw all staff and financial support from the IRT and should accord substantially lessened deference to any recommendations it may forward.
Executive Summary
• The IRT is a “constituent body” of ICANN and its non-compliance with ICANN Bylaws falls within the jurisdiction of the Ombudsman.
• Any consideration of second level disputes that results in alteration of the UDRP must take place within a stand-alone process that is fair, open and transparent, and separate from the development of final application rules for new gTLDs.
• The IRT’s non-compliance with Bylaws requirements for open and transparent proceedings that ensure fairness are documented in its own minutes.
• The IRT‘s non-compliance creates substantial litigation risk for ICANN itself.
• The IRT should be compelled to come into immediate compliance with all applicable ICANN Bylaws or, failing that, ICANN should withdraw all staff and financial support and regard any recommendations it may forward as lacking any official status.
Ombudsman Jurisdiction
We believe that this matter falls within your jurisdiction because, as explained on the ICANN website (http://www.icann.org/ombudsman/):
The ombudsman is an independent, impartial, and neutral officer of ICANN.
The Ombudsman’s function is to act as an Alternative Dispute Resolution (ADR) office for the ICANN community who may wish to lodge a complaint about a staff or board decision, action or inaction. The purpose of the office is to ensure that the members of the ICANN community have been treated fairly. The Ombudsman will act as impartial officer and will attempt to resolve complaints about unfair treatment by ICANN using ADR techniques.
Jurisdiction of the Ombudsman
The ICANN Ombudsman will receive and have jurisdiction over complaints concerning:
• Decisions, actions, or inactions by one or more members of ICANN staff;
• Decisions, actions, or inactions by the Board of Directors which may be inconsistent with the Articles of Incorporation or the Bylaws.
It is our contention and belief that the action of the ICANN Board in creating the IRT as an ICANN-authorized and supported entity, and the subsequent inaction of the Board and staff in assuring that the IRT acts in full compliance with the fairness and transparency standards contained in ICANN’s Bylaws, constitutes a violation of those Bylaws; and that the staff and financial support extended to the IRT therefore constitutes a further violation.
Subsection 7 of Article I, Section 2 (Core Values) of the ICANN Bylaws states that ICANN’s decisions and actions should be guided by a commitment to “Employing open and transparent policy development mechanisms that (i) promote well-informed decisions based on expert advice, and (ii) ensure that those entities most affected can assist in the policy development process.” And Section 1 of Article III states that “ICANN and its constituent bodies shall operate to the maximum extent feasible in an open and transparent manner and consistent with procedures designed to ensure fairness.” (Emphasis added.)
Unfortunately, these principles are not being observed in the development of proposed “solutions” for rights holders in new gTLDs, as ICANN has delegated the lead role in the development of new policies to the Intellectual Property Constituency (IPC), which is now proceeding in a manner that unfairly excludes the views of professional registrants and that is not transparent as that term is generally understood and implemented in other ICANN policy development processes and working group undertakings. The IPC is of course entitled to forward whatever recommendations it may wish to ICANN’s staff and Board as regards rights protection or any other aspect of the new gTLD process. But the IPC is not entitled to receive a delegation of authority from ICANN, supported by staff and funding assistance, and then proceed in a manner at odds with ICANN’s Bylaws. The IRT process is not, as required by the Bylaws, open and transparent, it does not ensure fairness, and it does not ensure that one of those entities that will be most affected by the policy development process – the domain investment and development community – can meaningfully assist in this policy development process.
We do not believe there can be any doubt that the IRT is a “constituent body” of ICANN, as it—
• Was created by Board Resolution on March 6th in Mexico City.
• Was charged by the Board to “propose solutions to the Staff on these issues in a timely manner” as regards the protection of trademark rights in new gTLDs.
• Is receiving, pursuant to the Board’s resolution, ICANN staff support as well as financial travel support for up to fifteen of its members.
• Includes two ICANN Board members as Ex Officio Members
The March 6th ICANN Board Resolution on “Protection for Trademarks in New gTLDs” requested that the IPC, in consultation with ICANN staff, convene an Implementation Recommendation Team “to develop and propose solutions to the overarching issue of trademark protection in connection with the introduction of new gTLDs”. That Resolution noted that “these issues exist today within the existing gTLDs” — an admission that heightens our concern that any “solutions” adopted in the new gTLD process will be retroactively imposed upon existing gTLDs in which our members have considerable investments. The Resolution quite properly did not provide any exemption from applicable provisions of the Bylaws for the IRT.
UDRP Changes Must Be Addressed on a Stand-Alone Basis
The ICA’s position on the protection of trademark rights in new gTLDs has been consistent since our first comment letter on that matter, which stated:
Strong, cost-effective, and readily implemented protections for rights holders should be established but they must be limited to enforcing their rights under existing law and not be premised upon the creation of broader rights by ICANN fiat. It is for this reason that we object to creation of a reserve list of trademark names as this would provide rights protections beyond the geographic and relevant marketplace limitations of trademark law. We also object to the imposition of any new rights or procedures that would supplant or supplement the UDRP absent extensive consideration of such proposals in a process that ensures that registrant concerns about current UDRP enforcement trends are heard.
We have good reason to believe that the IRT in fact constitutes a body that will propose substantial alterations in and displacement of the UDRP on which our members rely for the protection of their domain investments, and that any such “solution” adopted for new gTLDs will rather quickly become applicable to incumbent gTLDs, including .com, in the name of uniformity. One of the significant challenges faced by our members today is the increasing lack of uniform application of the UDRP between ICANN-accredited arbitration providers, leading to forum shopping by complainants. Adopting alternate second level dispute policies for new gTLDs will further exacerbate the lack of uniformity in the UDRP, when the proper policy is to provide registrants with uniform substantive and due process rights across all gTLDs.
We have no objection to the initiation of an ICANN policy development process to consider reform of the UDRP so long as its participating membership is balanced and open and its proceedings and transparent and ensure fairness. But we have major objections to a stealth process for UDRP alteration that is undertaken on an expedited basis and as a subsidiary issue in the new gTLD authorization process, particularly when ICANN is perceived to be anxious to pacify trademark interests so that it may initiate the acceptance of new gTLD applications this year. The proper focus for the consideration of rights protection in the context of new gTLDs is at the first level, based upon the potential growth in the number of gTLDs and vis-à-vis potential applicants for new gTLDs who may request a top level domain name that constitutes potential infringement. The potential multiplicity of gTLDs cannot constitute an excuse for backdoor evisceration of the UDRP through an opaque and non-inclusive process supported by ICANN resources, especially when the current UDRP clearly affords substantial protection to complaining rights holders as they prevail in approximately five out of six proceedings. The desire of some trademark interests for ICANN’s authorization of a no or low cost expedited process that potentially allows for simultaneous filings against thousands of second level domains and that puts the burden on registrants to restore their suspended domains to operative status should not be furthered in this manner.
IRT Non-Compliance
The IRT has now been constituted. The domainer community and other registrant interests that will be directly affected by any alteration or supplementation of registrant rights in the UDRP have been excluded from its membership. Contrary to the Board’s directive that the IRT “solicit input from the interested constituencies prior to its first session” we know of no such outreach effort. Further, the IRT has chosen to avoid such standard transparency mechanisms as providing a publicly archived mailing list as well as audio recordings and transcriptions of all its teleconferences and face-to-face meetings. Rather, the IRT has chosen to only post largely non-substantive minutes of its meetings and teleconferences on the excuse that many of its participants would not have been authorized by their clients or employers to join had such standard transparency been implemented, a rationalization that only invites further suspicion by the ICANN community. We know of no persuasive argument for the proposition that an ICANN “constituent body” can select the degree of Bylaws compliance it wishes to maintain, or that the desire of participating members to operate in a non-public manner should be accommodated.
The IRT meeting minutes posted at https://st.icann.org/new-gtld-overarching-issues/index.cgi?trademark_protection are revealing and buttress our contention of a lack of compliance with ICANN transparency standards:
• The meeting minutes of the telephonic meeting of March 25, 2009 state “many team members raised concerns about being able to participate fully and effectively if team work was fully public; agreed to closed mailing list, recordal of calls for IRT members only, no distribution of MP3, discussions to be confidential except general updates and ideas may be shared provided no attribution”. (Emphasis added.)
• The meeting minutes for the two day face-to-face meeting held in Washington, DC on April 1-2, 2009 is a scant 3 pages long (of which nearly the entire first page consists of a Roll Call) and thereby provides the ICANN community with little in the way of a comprehensive understanding of what occurred at this meeting, for which the community paid substantial travel expenses. Its “Created checklist of questions that need to be asked of all solutions” consists of ten questions, not a single one of which relates to protecting the legitimate rights of good faith domain registrants who will be most affected by implementation of IRT recommendations. And it lists, as one of the “high priority proposed solutions” it is developing, a “rapid/expedited suspension mechanism” proposal that would directly affect ICA members and other registrants. It also notes that IRT participants were reminded of their “obligation for confidentiality”.
• The meeting notes for the April 10th teleconference are again brief and entirely procedural in nature, alluding to work group reports but providing no substantive information as to their contents. These minutes close with a notation that “The Chair closed the meeting with a reminder of IRT’s Code of Conduct and confidentiality obligations, and with a reminder to contact Chair if any member has a question regarding such obligation.” (Emphasis added.)
• The meeting notes for the April 17th teleconference are similarly sketchy. However, they do reveal that the IRT is developing a proposal for a Uniform Rapid Suspension System (URSS) that may significantly displace the UDRP for second level disputes at new gTLDs. They also show that the IRT intends to present its proposals to ICANN as a non-negotiable package, stating “The IRT also confirmed the importance of including “tapestry” language in its first draft report to emphasize that its proposals are interdependent and should not be viewed as stand alone proposals.” Finally, they note that the IRT plans to invite certain unidentified “companies” to its second face-to-face meeting, scheduled to be held in San Francisco May 11th-13th, but there is no information as to why only companies will be invited to interact with the IRT or whether the selection criteria for such invitees in any way accords with Bylaws requirements for fair proceedings that include input from those most likely to be affected by the IRT’s policy proposals.
It is clear from these notes that the IRT, despite its indisputable status as an ICANN constituent body, has elected to operate in a largely opaque, non-transparent, and confidential manner and is not fairly inclusive, and is therefore not adequately considering the legitimate interests of entities that are bound to be affected by its policy recommendations.
In addition to making an immediate inquiry into the matter of the IRT’s operation, we also hereby request that you inquire into the manner by which the IRT’s membership was constituted. — In this regard, it is incumbent to inquire as to the mechanism by which the IPC made the availability of positions on the IRT known to other parties (we note that members of the Business Constituency such as ICA did not receive formal notice that the IPC was seeking members from outside its ranks until the week after the application deadline) and what objective criteria, if any, were used to select members from among those who did apply. The IRT is an official body of ICANN, not a private club, and there must be an obligation to constitute it with an eye toward inclusiveness and diversity of viewpoints rather than pre-existing relationships and compatibility of policy views.
There can be little doubt that the recommendations of the IRT and other trademark organizations could result in a substantial diminution of registrant rights in the UDRP. — For example, an April 13th letter from Verizon Communications Vice President and Associate General Counsel Sarah Deutsch to ICANN CEO Paul Twomey (available at http://www.icann.org/correspondence/deutsch-to-twomey-13apr09-en.pdf) states:
We understand that the newly created Implementation Recommendation Team (IRT) will work to develop and propose solutions to the overarching issue of trademark rights protection in connection with the introduction of new gTLDs. In doing so, the IRT must recommend policies, processes and requirements to improve trademark rights that reflect the views of the trademark community at large. Because the introduction of potentially thousands of new TLDs creates a comprehensive set of infringement and enforcement problems for trademark owners at all stages of the process, it is critical that the IRT’s recommendations supply trademark owners with low or no cost remedies that scale in the new TLD system. This bundle of recommended protections should be available at both the pre and post-delegation phases and apply to both first and second level domains. ICANN should also accord significant deference to the collective package of recommendations from the trademark community. Trademark owners are best situated to assess which solutions provide realistic brand protection in a future that may include potentially thousands of new TLDs. ICANN should adopt the broad set of solutions and should not view the trademark community’s recommendations as a negotiation where critical remedies are tossed aside. (Emphasis added.)
Ms. Deutsch’s correspondence makes clear Verizon’s view that the IRT recommendations should be adopted by ICANN without alteration (in concert with the IRT’s own commitment to “tapestry” language), that they will apply to second level disputes now subject to the UDRP, and that the IRT represents the “trademark community at large” with no meaningful role for registrants.
Our concern about the IRT’s non-transparent and non-inclusive operation is further heightened by other input received by ICANN regarding the resolution of legal rights disputes in new gTLDs. — The explanatory attachment to an April 3rd letter from WIPO Arbitration and Mediation Center Director Erik Wilbers to members of the ICANN staff (available at http://www.icann.org/correspondence/wilbers-to-pritz-03apr09-en.pdf) proposing an expedited domain name suspension mechanism (ESM) concedes that, in regard to one ESM variant, “Informal data from a recent sampling of WIPO UDRP cases covering some 400 domain names indicate that a significant majority of UDRP disputed domain names would be captured by this variable.” (Emphasis added.)
By WIPO’s own admission, one possible form of low or no cost domain suspension mechanism, similar to what Ms. Deutsch believes will be recommended by the IRT (and that may indeed be the URSS referred to the its April 17th meeting notes) and that ICANN should adopt without change, will displace the current UDRP for the majority of domain name disputes. This massive potential for substantial displacement and diminution of domain registrant rights illustrates why the IRT must comply with ICANN fairness and transparency standards, and why UDRP changes must be considered on a stand-alone basis that is open, fair, and separate from the new gTLD application process.
Heightened ICANN Litigation Risk
Finally, there is another compelling reason for ICANN to require such Bylaws compliance, and that relates to ICANN’s own potential legal liability should it implement any recommendation from an IRT that has not come into full compliance with its Bylaws. As a recent paper authored by former ICANN Board member Michael Palage (available at http://www.pff.org/issues-pubs/pops/2009/pop16.10IRTgTLD.pdf) explains:
The trademark experts that comprise the IRT of course realize that their actions and recommendations do not take place within a vacuum, but within a vibrant and financially lucrative domain name eco-system and under the shadow of trademark law. In fact, several of the participants have direct/indirect financial interests in the new gTLD process either on behalf of the employer or client. It is therefore of paramount importance that there are adequate safeguards in place to ensure the objectivity and neutrality of the IRT’s work product and to limit potential legal exposure of ICANN and IRT panelists.
Recommendation #1: The IRT should conduct all deliberations in an open and transparent manner.
Specifically, the IRT should provide: a publicly archived mailing list; audio recordings of all IRT teleconferences and face-to-face meetings; and transcriptions of all IRT teleconferences and face-to-face meetings to help non-English speakers follow IRT activities.
While these mechanisms/safeguards may add to the initial cost projections originally authorized by the ICANN Board, in the context of a $20+ million initiative, ICANN must not be “penny wise and pound foolish”. ICANN needs to ensure that the entire global community can trust thee process and observe in detail the activities of this group. This proactive approach would be an excellent defensive against any potential claims that ICANN was seeking to water down trademark protection safeguards in the hope of recognizing an economic benefit from the additional domain name registrations. The truth is always the best defense.
Recommendation #2: ICANN should require all IRT members to submit an interest disclosure statement.
As noted above, several IRT participants have direct or indirect financial interests in the new gTLD process either on behalf of an employer or client. Participants should be required to make public a general disclosure of any such interests (e.g., “my employer is a registrar,” “I represent a client that is considering applying for a TLD”) coupled with a more detailed disclosure that would be held in confidence by an attorney within ICANN’s legal department. (Emphasis added.)
While we part company with Mr. Palage in one regard – we think it is manifest that the IRT will seek to put trademark protection safeguards “on steroids” rather than water them down – we otherwise believe that he is absolutely correct as to the requisite transparency mechanisms, and that ICANN must require the IRT to comply with these thoughtful recommendations.
Requested Ombudsman Action
For all of the reasons stated above, we believe it is clear that the IRT is operating in non-compliance with applicable ICANN Bylaws and must be compelled to come into such compliance immediately through such steps as:
• Releasing its archived mailing list
• Releasing audio recordings and transcripts of all its teleconferences and face-to-face meetings
• Releasing interest disclosure statements for all of its members
If the IRT fails to come into such Bylaws compliance, we believe that ICANN should:
• Immediately withdraw all staff, financial and other support from the IRT, and
• Notify members of the IRT that their failure to comply with ICANN fairness and transparency standards has forfeited its official status, and that any recommendations it may choose to forward will be accorded no more deference than those of any other group or individual.
Conclusion
Let us again be clear: If the IPC simply wished to develop proposed trademark “solutions” for new gTLDs on its own we would not be requesting an inquiry by your office. But once the IPC was designated by the ICANN Board to provide leadership for a broader policy effort, and received ICANN staff and financial support for that endeavor, it became bound by all relevant provisions of the ICANN Bylaws relating to fairness, inclusiveness, and transparency — and its operation to date is not in compliance with them. The inaction of ICANN’s Board and participating staff in enforcing such compliance requires that we ask your office to conduct an immediate inquiry on this matter and to expeditiously take all appropriate steps to enforce Bylaws compliance.
Thank you for your consideration of our views in this important matter. We look forward to your prompt reply.
Sincerely,
Philip S. Corwin
Counsel, Internet Commerce Association