Companies respond to allegations about their eligibility to run top level domain names.
This morning I (and a handful of other bloggers) received a copy of a letter written by McCarter & English partner Jeffrey Stoler calling into question Demand Media’s and Donut’s eligibility for applying for new top level domains.
The crux of the issue that Stoler brings up (pdf) is ICANN’s three strikes rule. The rule says that if you’ve been on the losing end of three final UDRP, ACPA, or similar rulings with one in the past four years, then you are disqualified from applying for new top level domains.
By the spirit of this rule Demand Media certainly would be ineligible. Its subsidiaries have lost dozens of UDRP cases.
I’m not aware of any other applicant besides Demand Media that would be ensnared by this rule. Go Daddy would have been had the program kicked off as planned, but since the program was delayed I believe the company falls outside the four year window.
Stoler’s letter says there’s strong evidence that Donuts is merely an alter ego of Demand Media.
Demand Media had limited comment on the letter, citing its quiet period. A company spokesperson said:
We’re limited in what we can say given that we’re in a quiet period. However, we do believe our applications meet the requirements set forth in ICANN’s applicant guidebook, including the eligibility requirements. We continue to feel good about the new gTLD program and the opportunity to participate in this exciting new initiative.
Donuts co-founder Jonathon Nevett responded:
The letter — generated by a law firm representing an anonymous client — is rife with factual inaccuracies and meritless allegations. Demand Media is a commercial partner and is neither an investor in nor part of a joint venture with Donuts. We look forward to engaging in the ICANN review process and its thorough background checks, and are confident that we meet all requirements to operate a Top Level Domain registry.
Nevett brings up a burning question: who is behind Stoler’s letter? Attorneys don’t spend hours of their time coming up with this stuff for the fun of it. Given that just about every new TLD applicant has a conflict with Donuts, it could be any number of competitors.
Stoler has not returned my voicemail left this morning.
This is not surprising. It is generally a small group of domainers getting advice from the same attorneys to set up all these businesses and “subsidiaries.”
BTW – The same law firm that filed that bogus Domain Tools lawsuit also represents ENOM.
In any case cybersquatter gangs need to be driven out of the industry instead of getting speaker slots at domain conferences, getting awards, and being featured in stories that portray them as heroes and entrepreneurs.
Web Wise says
“Nevett brings up a burning question: who is behind Stoler’s letter?”
This is the real question that needs to be answered as you’ve rightly pointed out.
At the moment all of this talk relates to no legal action.
Will be interesting to see what would happen if we threw some actual legal documents and enforcements in there.
The ‘anonymous’ client had better be someone pretty powerful or Donuts and Demand Media will be wiping the floor with them in legal battles.
“who is behind Stoler’s letter?”
I don’t see what the difference is who raised the issue. The issue should be judged on its merits, not who raised it.
“had better be someone pretty powerful or Donuts and Demand Media will be wiping the floor with them in legal battles.”
Why would you think that? It seems a number of UDRP’s were lost. Plus, ENOM uses an attorney who was the staff counsel to Seattle’s “porn king.” Maybe you have been reading too many of those articles that portray these people as brilliant entrepreneurs? I suspect those articles get written by people who get free trips to these domain conventions.
For instance, the people with the SIX.com dispute sometimes use the same attorney who worked for the Seattle “porn king.” They have a domain like SIX.com yet all they can think to do with it is point it to a porn site. You are dealing with some really high class individuals here.
Claire W. says
This is fascinating reading. I’ll be curious to see if Donuts or Demand plans on specifically pointing out the “factual inaccuracies and meritless allegations” in the letter.
Doesn’t matter who the client is, if true the allegations are simply against the rules. It’s called whistle blowing, no need to know who it was, the question is is it true. The Donuts story seems to have a large hole…
Andrew Allemann says
+ 2 points to J for hole joke
we rule gtlds says
deleted – fake email address
Martin Warner says
And why does everyone ignore the real issue here. That this one company is registering 75% of all the generic domains. ICANN has failed to deliver on its promise of offering innovation and competitiveness if it doesn’t block this company. It is pure greed that would cause a company to go for such a large number of domains and leave so little for every other company. Will ICANN step up and block this insanity?