ICANN’s three strikes rule is so full of holes that you have to wonder if the holes are on purpose.
One of the major changes to the so-called “Proposed Final” applicant guidebook is a definition of what a pattern of “bad faith in regard to domain name registrations” is. Applicants that have shown this bad faith pattern are barred from applying.
The new rule slipped into the latest version: if you have three or more UDRP, ACPA, or other equivalent legislation adverse decisions and one of those is in the last four years, you may not apply for a new TLD.
Of course this begs the question if registrars such as GoDaddy and eNom, who each have affiliated companies that have lost more than three UDRPs, can apply.
My opinion, based on the current reading of the application, is that YES, these companies can apply. The old language relating to this paragraph read:
Circumstances where ICANN may deny an otherwise qualified application include, but are not limited to instances where the applicant, partner, officer, director, or manager, or any person or entity owning (or beneficially owning) fifteen percent or more of the applicant…
The new header for who these restrictions apply to reads:
Circumstances where ICANN may deny an otherwise qualified application include, but are not limited to instances where the applicant, or any individual named in the application…
So ICANN has removed the “person or entity owning” part. Now if you flip to the application rules you’ll see that a lot of people meet the qualifications of being “named in the application”. These include:
(a) Enter the full name, contact information (permanent residence), and position of all directors (i.e., members of the applicant’s Board of Directors, if applicable).
(b) Enter the full name, contact information (permanent residence), and position of all officers and partners. Officers are highlevel management officials of a corporation or business, for example, a CEO, vice
president, secretary, chief financial officer. Partners would be listed in the context of a partnership or other such form of legal entity.
(c) Enter the full name, contact information (permanent residence of individual or principal place of business of entity) and position of all shareholders holding at least 15% of shares, and percentage held by each.
So let’s look at the example of DemandMedia/eNom. Technically the names it has lost at UDRP (so far 6 cases this year) were part of a subsidiary. The new registry the company sets up, then, would not have any of the “names” related to this subsidiary in it, meaning that (based on my reading) eNom should have no problem.
And if it did want a troublesome person on its board or in a senior position? It can just add them after the application is approved. The way I read it, the cybersquatting provision doesn’t apply to any people added after the application. The only problem when you add someone is if they have a criminal history.
Here’s one theory: this loophole is so gaping that it was placed to appease trademark holders with full knowledge that anyone who wants to get around it can.
Now I personally don’t have a problem with any of the registrars that have been trapped by this new provision from applying. If we’re going to let registrars own registries and vice-versa, let’s bring it on.
That’s beside the point that this three strikes definition is a major problem. Here are three other problems with the rules:
1. We know that UDRP is inconsistent. If some large portfolio holders knew about this new applicant qualification back in the day, they would have fought UDRPs more rigorously. Consider Tucows, which technically would be barred given the three strikes rule. I count 11 decided cases involving the company. It has won all but three, and one of the three had a dissenting opinion. The names it has lost in UDRP are all controversial. They’re common last names, and I believe the company has fought some of them in court.
2. What happens if a company or person lost a UDRP but won the same case in court? Technically it’s still a UDRP loss.
3. It doesn’t take into consideration the number of domain names owned. If someone owns 10 domains and has lost 2 UDRPs, that shows more of a pattern than someone who owns millions of domains losing 3 or more cases.
It still concerns me that this arbitrary provision has been added. It should be overhauled.