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.