Jeffrey Stoler, Esq. on behalf of the Boston law firm of McCarter & English LLP has posted a second round of comments today telling ICANN that Donuts and Demand Media should be disqualified from owning new gTLD’s.
The first round of comments were posted on July to ICANN’s site.
Here is the new comment:
“”In our letter dated July 28, 2012 (the “July 28 Letter”), we sought to bring to ICANN’s attention[2] information detailing why the 333 gTLD applications filed by Demand Media and Donuts (together hereinafter referred to as “Demand/Donuts”) should not survive the Background Screening standards of §§ 1.2.1 and 2.1 of the gTLD Applicant Guidebook, Version 2012-06-04 (hereinafter, the “Guidebook”).
“Subsequent to the date of that letter, additional facts increasing our concerns have come to light, and we write now to bring that information to ICANN’s attention.”
“Specifically, we wish to describe the following matters:”
“* As background, and as detailed in our July 28 Letter, eNom is both the registrar subsidiary of Demand Media and the company founded and run by Paul Stahura for many years prior to Mr. Stahura’s assuming the leadership of Demand Media and later becoming the founder and CEO of Donuts.
“On August 28, 2012, a panel of the National Arbitration Forum decided, in Uprising Communications Group, LLC v. Whois Privacy Protection Service, Inc./Whois Agent[3], that eNom was a “notorious cybersquatter” with a “history of [bad-faith] UDRP decisions.” The panel firmly rejected eNom’s contentions of innocence in the case – particularly eNom’s position that “stay brutal” is a common and generic term of speech – and ruled that eNom had acted in bad faith.
“This decision brings the total number of rulings against the Demand Media Group (as defined in the July 28 Letter) to 40, of which 23 have been rendered within the past four years. ”
“These 23 decisions are 20 decisions more than the 3 adverse decisions the Guidebook states will constitute a pattern of bad faith conduct that would disqualify an applicant from being granted a gTLD under ICANN’s new gTLD program.”
“As background, and as also detailed in our July 28 Letter, Mr. Graham Stirling was a founding director of Donuts and, upon information and belief, is directly or indirectly a major investor in Donuts. On August 5 and 7, 2012, it was publicly reported[4] that Mr. Stirling had registered the 27 self-evident and egregiously cybersquatting domain names listed in Exhibit A to this letter. In an attempt to conceal this cybersquatting activity, it has also been reported that Mr. Stirling abandoned his registration of those 27 domain names on August 8, 2012.”
The July 28 Letter identified various points of evidence supporting an inference that Demand Media and Donuts were operating in concert – the kind of concerted action that caused the UDRP panel in the Davis Vision case to hold, as the courts regularly do, that ostensibly separate corporations should be treated as one and the same when those entities are shown to act in concert.
The inference that Demand Media and Donuts were operating in concert – and should therefore be treated as one and the same – was strongly buttressed by Demand Media’s Securities & Exchange Commission filing on August 7, 2012[5]. That filing revealed that Demand Media had made a multi-million dollar investment in a “strategic arrangement” with Donuts Inc. to control 107 of Donuts’ gTLD applications.
As stated in the July 28 Letter, “It would make a mockery of ICANN rules . . . if Demand Media Group and its executives could absolve themselves of their record of adverse UDRP decisions merely by forming a new entity [i.e., Donuts, Inc.].”
With the foregoing evidence in hand, it would seem only to heighten that mockery if Demand Media could then provide millions of dollars in financing to that new entity and expect ICANN not to notice.
In closing, we are hopeful that the foregoing will prove useful to ICANN in connection with its Background Screening process, and we invite you to be in touch with the undersigned if there are questions or concerns with which we could assist.””
Interesting viewpoint. But will ICANN take any notice?
John
I guess we will have to see what ICANN does with the comments.
Whomever this law firm is representing obviously has an issue with the Donuts, Demand folks and if they have the money they can file a formal objection which will then have to be dealt with
Shouldn’t all of this have been worked out before 100 million dollars was raised?
You don’t put in a turnpike and throw out dozens of businesses offering air rights to just a few without first having proposals and meetings tec. Is it because Washington is not in charge?
They get wind of this and the whole biz will be screwed, regulated, taxed etc…
No one asked for these and no one needs these from a constituent point of view
Owen
The three strikes and you’re out rule in the Guidebook as far as UDRP is well known to all and of course back in the day when it was open for discussion I took the position that the number was way too low to be considered a serial cyber squatter.
These are some very smart guys with a lot of money on the line.
I would assume they feel like they are well positioned but I’m not sure how.
It means money what do you think will happen ?
Isn’t anyone else curious about who is paying for this stuff?
Leaving aside the merits or lack thereof, it seems there is a full court press against Donuts which, while certainly adding drama to the process, someone is writing checks to make happen. Maybe my tinfoil hat is too tight, but this letter and the WaPo piece may be spontaneous expressions of individual concern, but may also be an interest-driven strategy by someone for some purpose. Anyone care to engage in rampant baseless speculation on that?
John
Without wishing to take up your invitation to “engage in rampant baseless speculation”, perhaps this is a strategy to resolve contention? Putting any applicant off balance and in defensive mode (no matter how big or well resourced they seem) is a clever tactic to divert focus and soak up resources of a competitor.
Perhaps it’s also a tactic to see if any changes are made to application materials now that the change process has been announced?
It’s pretty shabby to be throwing around claims (even if they are true) without identifying who one is representing unless the law firm is doing pro-bono work (which I really doubt!).
I wouldn’t be surprised to see these kinds of tactics invoked to avoid making a real complaint through the appropriate channels rather than trial by press release and public comment.
Liz
Very Interesting point Sedari!
Think this may well be the explanation.
Simply a distraction tactic to put certain applicants on the back foot. I’m presuming some of their competitors will be able to use this unwelcome negative publicity as a springboard for their own marketing campaigns.
As we’ve all agreed, someone is writing cheques here. The question is who?
rampant baseless speculation:
1. They are in contention with Donuts for some of the TLDs and want to reduce the competition
2. They are opposed to the introduction of new TLDs and want to discredit the applicants and get the process called off
Liz
I actually chatted with the reporter for the Washington Post who wrote the front page story on Donuts yesterday, and raises those exact motives for information being send to or leaked to the media.
On the other hand when you come out as the biggest player for anything where there is BIG money involved you can expect to receive extra scrutiny and become the target for those wanting to take a big player down
John
Sure I’m curious, but see my comment above to Liz.
Hi John:
Given that “eNom” have been specifically mentioned, I’ll engage you; however, with nothing “baseless”.
Having transcended making “comments to ICANN” who FYI choose … “ICANN identifies a possible issue but relies on a complainant to file it formally;” as per > http://gnso.icann.org/en/issues/new-gtlds/pdp-dec05-fr-partb-01aug07.htm http://www.washingtonpost.com/business/technology/donuts-incs-major-play-for-new-web-domain-names-raises-eyebrows/2012/09/24/c8745362-f782-11e1-8398-0327ab83ab91_story.html <
state … {The story throws around some serious allegations about Donuts including that they have “close ties to a company with a well-documented history of providing services to spammers and other perpetrators of Internet abuses. “}
The observation of the WP, is not without merit; and I think that on October 19th, at 10am ICANN's part will become publicly published as one of the "close ties".
With ICANN involved & exposed, the whole exercise may implode and the US DoC will do two things. Terminate ICANN & gather the strength to tell the world, FINALLY, the Internet is a United States "resource" and they will publicly welcome Worldwide use BUT, with fair, open & transparent United States Laws applicable.
From Canada eh, God Bless the United States of America!
Cheers, Graham.
Liz, it’s more than shabby, though, because IMHO it puts the lawyer into a ticklish situation in the event of a libel action. As an attorney, if someone wanted me to make comments verging on libelous against a commercial competitor of a client, then there would have to be some interesting conditions of engagement. If the underlying mover here is another TLD applicant seeking to spike the competition, then there may be a case for trade disparagement.
The letter facially originates with this lawyer, and does not purport to be a communication made on behalf of, or at the behest of, any client. In a libel action against the lawyer, I don’t see a good reason why a claim of immunity of any sort or privilege would hold up. It is a privileged communication for me to ask a lawyer, “What would be the potential legal consequences of poking Liz in the eye with a stick?” Attorney-client communications are privileged so that clients have the freedom to ask those sorts of questions and receive objective advice about the potential consequences of proposed courses of action.
What we do not protect are attorney-client communications to the effect of, “Will you take $100 to go poke Liz in the eye with a stick?” whereupon the lawyer says, “Sure” and proceeds to show up and poke you in the eye with a stick. The lawyer in that situation has no defense against your claim of battery, and is now a joint tortfeasor with the client in a conspiracy to poke you in the eye with a stick. Hence, the liability would extend jointly to the attorney and the client, and communications made in the course of planning to poke you in the eye with a stick would not, in my view, be privileged.
IMHO, Donuts should go through that letter with a fine tooth comb, find assertions which can reasonably be alleged as libelous, and go after the guy who wrote the letter along with yet-to-be-named “Doe” parties who acted in concert with the lawyer.
And, I should also mention that any specific rate I would charge to poke Liz in the eye with a stick is subject to negotiation of more detailed terms. My post above is not an offer to poke Liz in the eye with a stick for $100, nor is $100 intended as an exemplary or “typical” charge for that service. Your quote for that service may vary substantially, depending on the circumstances. Free consultations are available, at which time I would provide a reliable estimate prior to taking any engagement to poke Liz in the eye with a stick.
I smell GoDaddy in this somewhere.