Donuts, Inc.,  the largest applicant under ICANN’s new gTLD program has just been covered again by a major publication, this time by  BusinessWeek.com in a story entitled:

“Donuts’ Grab for Domains Raises Fears of Cybersquatting”

“Stoler, the McCarter & English lawyer, said in his July letter to Icann that Donuts has clear links to Demand Media and its subsidiaries, which have received more than two dozen “bad- faith” rulings from Icann-recognized dispute panels.”

“”Examples of bad-faith actions include buying a domain name to block a rival that might have previously used the name as a trademark or using a domain to deliberately mislead consumers into thinking they’re on a different site. While cybersquatting is illegal under U.S. trademark law, courts often defer to Icann tribunals because many cases involve foreign parties.”

“The allegations have been made fairly publicly by a wide range of organizations,” said David Weslow, a partner with Wiley Rein LLP specializing in Internet intellectual property. “If the allegations are true, the concern would be the prior actions of those other companies would be indicative of how the Donuts group may operate,” he said.

Weslow said he represents businesses bidding for TLDs, though none in direct contention with Donuts.

“Stoler declined to comment to Bloomberg News and wouldn’t say if any of his clients are competing with Donuts to own new TLDs”

“The chief executive officer of Donuts used to run Demand Media, and Donuts has an arrangement to sell Demand Media 107 of its TLDs if it chooses to release them.”

“Donuts and its key executives are, by Icann’s established eligibility guidelines, unsuited and ineligible to participate,” Jeffrey Stoler, a lawyer with McCarter & English LLP, wrote in a July letter to Icann, which manages the architecture of the Web. “Icann can and should reject the applications from Donuts and its subsidiaries, Demand Media and its subsidiaries, and their respective affiliated companies.”

The story quotes Brian Jacobs, founder and general partner of San Mateo, California- based Emergence Capital Partners, a Donuts backer to say:

Donuts and Demand Media are distinct companies with no equity relationship, and Donuts is “100 percent qualified” to be a TLD registry, said.

Jonathon Nevett, one of Donuts’ four founders is quoted as saying:

The company is bidding for so many TLDs because domain-name expansion is long overdue”

“When you do something bold and large, sometimes you put a target on your back,” he said. “We’re going to run a clean, safe registry.”

“Donuts wants to build a “shopping mall” of domain names that offer breadth and depth to consumers”

“This has been the most constrained space you can think of,” with only 22 suffixes currently available. If you think of it in the real-estate market, it would be like not creating homes for years and years and years.”

You can read the entire story here