We told you the other day about a Boston Law Firm filing comments with ICANN asking them to disqualify Donuts and Demand Media application for new gTLD’s

Today another law firm Winston & Strawn LLP which has offices in North America, Europe and Asia, in a comment written by Paul McGrady, Esq, to ICANN said that Directi should be disqualified as an applicant under the new gTLD program.

Unlike the Boston law firm whose motives are unclear, this law firm represents the golf club manufacture PING and therefore they are specifically objecting to Directi (Radix) application for .Ping but while they are at it, is trying to get Directi disqualified from owning any gTLD.

Here is the six part comment which we have consolidated for you:

We represent Karsten Manufacturing Corporation, the owner of the famous PING trademark and the parent company of the applicant which has filed App. No. 1-1833-90242 to run the <.ping> registry.

We are writing concerning the thinly veiled attempt by Directi, which has formed new entities to apply for thirty-one new gTLDs, to make an end-run around the ICANN’s clearly stated applicant requirements.

Specifically, we draw ICANN’s attention to the above-referenced applications (each an “Application”) filed by a newly-formed company (each a “NewCo”).

Research into publicly available documents has confirmed that each NewCo (with the exception of the NewCo applicant entity for .web[1]) is controlled by Bhavin Turakhia, an individual who also controls Directi, whose service “PrivacyProtect.org” has been the losing Respondent in more than sixty recent Uniform Domain Name Dispute Resolution Policy (“UDRP”) proceedings.

Given the significant fiduciary and legal responsibilities associated with operating a gTLD, ICANN has established a set of requirements in the “gTLD Applicant Guidebook” (“Guidebook”) that, absent “extraordinary circumstances,” forbid applicants with a history of adverse UDRP decisions from applying for new gTLDs. Each of Bhavin Turakhia’s applications thus raise two simple questions:

1. Should a party who has been the named respondent in dozens of adverse UDRP decisions be permitted to thwart the Guidebook’s prohibitions by forming new companies to serve as the applicant entity for a new gTLD?

2. Is providing a “privacy service” whereby the service provider does not disclose customer information even when a UDRP is filed against a customer’s domain name an “extraordinary” circumstance such that an exception to the Guidebook’s applicant restrictions should be granted?

For the reasons outlined in detail herein, it is clear that the answer to both questions presented is unequivocally “no.”

Any applicant who has engaged in a pattern of disqualifying activities under the Guidebook’s policies cannot evade ICANN’s well-reasoned process by simply filing new gTLD applications through a newly formed company they control. Simply put, each Application referenced above and each NewCo must be automatically disqualified.

[While the NewCo applicant entity for the .web application (DotWeb Inc.) does not list Bhavin Turakhia as the founder of DotWeb Inc., NewCo’s Application for .web states that DotWeb Inc. is a “wholly owned subsidiary” of Directi.

Because Bhavin Turakhia controls Directi, which in turn holds DotWeb Inc., the fact that Bhavin Turkahia is not listed as the founder of DotWeb Inc. does not impact the analysis.

DotWeb Inc., like all of the other NewCos, should be disqualified as a gTLD applicant for the reasons outlined herein.

Each Application must be disqualified because each NewCo was founded or is otherwise controlled by Mr. Bhavin Turakhia, an individual who controls a company that has been the losing respondent in dozens of UDRP proceedings.

As detailed in each Application, NewCo “is a wholly owned subsidiary within the Directi Group” (“Directi”). Indeed, each Application makes clear that NewCo intends to “outsource[] our Abuse and Compliance functions to the Directi Group and our Abuse and Compliance desk will be staffed as a cost center by [Directi].” Mr. Bhavin Turakhia controls both NewCo (as evidenced by each Application) and Directi, as evidenced by the true and correct copy of a Capital IQ report identifying Directi’s officers attached hereto as Exhibit 1.

As reported in the Washington Post article attached hereto as Exhibit 2 and as confirmed by Directi in the blog post attached hereto as Exhibit 3, Directi is also the owner of a service called PrivacyProtect.org.

As detailed herein, PrivacyProtect.org has lost dozens of UDRP proceedings in the past several years. At bottom, PrivacyProtect.org and NewCo are all under the common control of Mr. Bhavin Turakhia.

Because Bhavin Turakhia’s company has been the named respondent in dozens of adverse UDRP decisions, any company under Mr. Turakhia’s control is an ineligible applicant for a new gTLD. Directi, each NewCo, and PrivacyProtect.org are all collectively referred to herein as “Applicant,” because all of these entities are under the common control of Bhavin Turakhia.

There is little doubt from Directi’s own public statement that all of the mentioned activities are run as a “group.” For example, in an article written by Applicant titled, “Directi Group Applies for Thirty-one Top-Level Domain Strings in the ICANN Process,”

Applicant states:

“Directi Group, a global leader in Internet products and Web services, today announced its ambitious effort to secure Top-Level Domains (TLDs) under ICANN’s program to expand the Internet’s addressing system. Under its new brand – Radix – Directi has committed over $30 million on the application of 31 strings comprising several generic and mass market names.”

See Directi Group Applies for Thirty-one Top-Level Domain Strings in the ICANN Process, RADIX, May 31, 2012, http://radixregistry.com/radix-applies-for-31-strings-newgtlds.php (a copy of which is attached hereto as Exhibit 4).

Any argument by Applicant that it should be allowed to form a separate entity to apply for a new gTLD in order to avoid its history of adverse UDRP decisions is unavailing. It is clear that the Guidebook does not permit formation of new entities in order to thwart the consensus of the ICANN community.

II. The gTLD Applicant Guidebook

The gTLD Applicant Guidebook (“Guidebook”) governs how applicants may participate in the New Generic Top-Level Domain Program. One of the goals of the Guidebook is to provide protections for rights holders and to protect consumers from confusion.

The Guidebook seeks to prevent cybersquatters from undermining ICANN by purposely using broad language to prohibit an applicant or individual named in the application from forming new companies to circumvent ICANN’s policies. Thus, the Guidebook requires disclosure of any history of adverse UDRP decisions, and states:

“In the absence of exceptional circumstances, applications from any entity with or including any individual with convictions or decisions of the types listed in (a) – (m) below will be automatically disqualified from the program….

(m) has been involved in a pattern of adverse, final decisions indicating that the applicant or individual named in the application was engaged in cybersquatting as defined in the Uniform Domain Name Dispute Resolution Policy (UDRP), the Anti-Cybersquatting Consumer Protection Act (ACPA), or other equivalent legislation, or was engaged in reverse domain name hijacking under the UDRP or bad faith or reckless disregard under the ACPA or other equivalent legislation. Three or more such decisions with one occurring in the last four years will generally be considered to constitute a pattern….

(o) fails to provide a good faith effort to disclose all relevant information relating to items (a) –(m).” (emphasis added).

In short, the Guidebook prohibits parties who have been involved in a pattern of adverse final decisions from participating in the new gTLD program.

As explained in detail below, Applicant has engaged in a pattern and practice of refusing to disclose customer information even after a UDRP is filed against a relevant domain name. This results in significant costs and burdens to legitimate rights holders and should foreclose any possibility that Applicant’s so-called “privacy service” offerings should be afforded “exceptional” status under the Guidebook’s clear and important applicant restrictions.

Directi’s PrivacyProtect.org has been the losing Respondent in at least 45 UDRP cases before the National Arbitration Forum (the “NAF”).

Of those 45, more than 20 were decided in the last 12 months (well after publication of a version of the Guidebook prohibiting applications from parties with a pattern of adverse UDRP decisions).

These decisions involved some of the world’s most well-known brands, including FORD, VICTORIA SECRET, METROPOLITAN LIFE, CITI, TARGET, ALLSTATE, DINERS CLUB, NORDSTROM, WALMART, and LOWES.

Further, Applicant has been the subject of at least 16 adverse UDRP decisions issued by the World Intellectual Property Organization (“WIPO”).

Copies of the 61 adverse NAF and WIPO Decisions against Applicant are attached as Exhibits 5-65.

Despite Applicant’s dismal record before WIPO and NAF, Applicant remains undeterred. As of the date hereof, well after the publication of the Guidebook, Applicant continues to appear as an email contact in the WHOIS information for domain names consisting of some of the most well-known brands in the world, including LOUIS VUITTON, MARRIOTT, NIKE, REEBOK, and CHANEL, which is consistent with its business model of shielding the identity of cybersquatters in order to enhance the sale of domain names. Copies of the relevant WHOIS records are attached hereto as Exhibit 66.

Each Application should be automatically rejected on the grounds that Applicant, through its various affiliated entities all under the common control of Bhavin Turakhia, has a documented pattern of adverse UDRP decisions against it.

Additionally, each Application should be automatically rejected on the grounds that each NewCo (with the sole exception of the Application for .web as explained above) lists Bhavin Turakhia as its Founder in its Application. This is because Bhavin Turakhia also controls Directi, whose PrivacyProtect.org business has been the named respondent in dozens of adverse UDRP decisions. In fact, there are so many such decisions involving the bad-faith registration and use of some of the world’s most well-known brands that ICANN would be irresponsible to place Applicant in charge of any new gTLD registries.

PrivacyProtect.org is named in hundreds of WIPO decisions along side parties who engaged PrivacyProtect.org to provide false contact information to inhibit enforcement for their acts of cybersquatting. Although relevant, the more than 60 decisions naming PrivacyProtect.org alone are sufficient to establish “a pattern of adverse, final decisions indicating that the applicant or individual named in the application was engaged in cybersquatting.”

Notably, irrespective of the existence of common control between the NewCo and Directi/PrivacyProtect.org, Applicant should be automatically disqualified because Applicant has confirmed in its application that Applicant intends to outsource its “Abuse and Compliance functions to the Directi,” the owner of PrivacyProtect.org. This is the very definition of the fox guarding the henhouse.

ICANN’s policy development process resulted in the Guidebook and its objective standards for disqualifying applicants with a pattern of adverse UDRP decisions. In this case, Applicant may argue that the activities of its PrivacyProtect.org service should not result in disqualification under the Guidebook because PrivacyProtect.org is merely a service that allows third parties to register domain names on an anonymous basis.

However, any purported altruistic aims expounded by Applicant are belied by the facts.

Unlike many anonymous WHOIS service providers, PrivacyProtect.org fails to modify the WHOIS record to disclose accurate registrant information even after a UDRP is filed against a relevant domain name.

As noted above, this means that PrivacyProtect.org is often the sole respondent in UDRP decisions concerning domain names registered through the service.

Even if Applicant were to now claim that none of the dozens of UDRP decisions against it involved domain names that were not otherwise licensed to a customer, ICANN evaluators do not have the benefit of any legal discovery process, so there is no way for ICANN to verify any such claim.

This is why ICANN has established objective standards by which to evaluate applications and applicants.

At bottom, Applicant’s decision to shield cybersquatters’ identities, even during UDRP disputes, disqualifies it as an applicant because the result is an adverse pattern of decisions against Applicant that disqualifies Applicant under the Guidebook’s objective, quantifiable standard.

To be sure, there are dozens of so-called “privacy service” providers, many of which attempt to operate in good faith to facilitate the dual benefits of providing anonymity to their clients but also ensuring disclosure when cybersquatters attempt to confuse or defraud consumers.

These companies disclose their customers’ information upon demand from aggrieved rights holders, or, at a minimum, upon the filing of a UDRP.

Our client believes that Go Daddy may be one such company offering WHOIS proxy services in this manner, balancing both the interests of its customers and those of consumers who rely on trademarks for their purchasing decisions.

There is nothing illegal or necessarily improper about providing such a so-called “privacy service.”

However, there are risks associated with such a business model.

By making the choice to offer such a service and to operate the service in a manner that results in a multitude of adverse UDRP decisions against it, “PrivacyProtect.org” and its controlling and affiliated parties are foreclosed from applying for (directly or indirectly through newly-formed applicant entities) new gTLDs.

Section 3.7.7.3 of the Registrar Accreditation Agreement makes it clear that, absent a prompt disclosure of underlying registrant information after receipt of reasonable evidence of actionable harm, the party appearing in the WHOIS “shall accept liability for harm caused….” W

While the Registrar Accreditation Agreement deals with registrar accreditation and not new gTLD applications and is making reference primarily to third-party harms, one of the other harms caused is to Applicant itself. Applicant must accept the harm it has caused itself as a result of PrivacyProtect.org’s business model.

By choosing to enhance its sales of domain names by providing the PrivacyProtect.org service and allowing itself to serve as the Respondent in dozens of adverse UDRP proceedings in order to shield its cybersquatting customers, Applicant has disqualified itself as a new gTLD applicant.

ICANN adopted the eligibility policies contained in the Guidebook for the express purpose of protecting consumers by helping to limit the likelihood of brand abuse.

No exceptional circumstances can exist where an applicant has routinely engaged in activities that intentionally thwart the efforts of legitimate rights holders to protect their brands and the consumers who rely on them. Indeed, Applicant’s practice of routinely losing UDRP disputes brought by owners of some of the world’s most famous brands confirms that Applicant is the very type of entity that the applicant restrictions contained in the Guidebook were designed to disqualify.

It is irrelevant whether Applicant was the underlying “true” registrant or was allowing itself to be the named Respondent in order to enhance the sale of domain names. The outcome is the same under a clear reading of the Guidebook.

By carefully drafting objective standards in the Guidebook, ICANN cast no judgment on the value of anonymous WHOIS services.

Indeed, an owner of an anonymous WHOIS service could easily remain an eligible applicant for a new gTLD simply by disclosing the underlying registrant when faced with the UDRP complaint.

However, Applicant decided to do business in a different way and have repeatedly elected to serve as the respondent in adverse UDRP proceedings. The Guidebook’s objective standards simply provide no exception for Applicant’s business model. Allowing Applicant to proceed would violate the unambiguous text of the Guidebook, undermine ICANN’s credibility, and cast into doubt the legitimacy and fairness of the new gTLD application process.

IV. Conclusion

For the reasons outlined herein, ICANN should honor the automatic disqualification of each of the above-referenced Applications as required by the Guidebook. Automatic disqualification is the only action that ICANN can take to ensure a fair and level playing field, maintain the legitimacy of the Guidebook, and protect consumers from the most egregious brand abuses.”””