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Court denies Donuts’ request to delay .web auction

Judge faults Donuts on procedural grounds and the merits, so auction will go ahead today as planned.

An auction to resolve the .web top level domain name contention set will go forward today as originally planned. United States District Judge Percy Anderson denied (pdf) Donuts’ request for a temporary restraining order (TRO) to postpone the auction.

Donuts filed a lawsuit and request for the TRO because it believes rival applicant Nu Dot Co might be under new control.

Judge Anderson said that he would have denied Donuts’ request even if ICANN hadn’t responded to the TRO request.

He said the company made several procedural errors when filing its request. First, it didn’t make an effort to contact ICANN’s counsel about its request for a temporary restraining order (TRO) to discuss it. It also neglected to submit a proposed order with its request. Finally, it didn’t serve ICANN.

With ICANN’s response in hand, however, Anderson further ruled that he would not have granted the TRO based on the facts.

Based on the strength of ICANN’s evidence submitted in opposition to the Application for TRO, and the weakness of Plaintiff’s efforts to enforce vague terms contained in the ICANN bylaws and
Applicant Guidebook, the Court concludes that Plaintiff has failed to establish that it is likely to succeed on the merits, raise serious issues, or show that the balance of hardships tips sharply in its favor on its breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence claims. Moreover, because the results of the auction could be unwound, Plaintiff has not met its burden to establish that it will suffer irreparable harm in the absence of the preliminary injunctive relief it seeks. The Court additionally concludes that the public interest does not favor the postponement of the auction.

Finally, the judge ruled that Donuts’ did not prove jurisdiction.

Anderson gave Donuts until August 8 to file an amended complaint to show jurisdiction.

Although the auction will go on as planned today, the lawsuit has placed a shadow of doubt on the procedure and result. Depending on what happens in the auction, Donuts might be able to delay the launch of .web by continuing with its lawsuit.

I have a poll running asking people how much they think the .web top level domain auction will close for.

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  1. Andrew Rosener says

    If this was a private auction instead of an ICANN hosted auction it would do $75M – $100M. But because there is no rebate to the losing bidders I think it only does $20M – $30M.

    • Andrew Allemann says

      That’s the big question, isn’t it? I suspect Nu Dot Co, or whomever it’s bidding on behalf, calculated that the domain will sell for a lot less in a public auction. I’ve heard arguments both ways on this.

  2. Rubens Kuhl says

    One other possibility is a player wanting to deny others from getting money, even though not wanting the string itself. It would be like this: pay one member of the contention set what they would gain by losing a private auction + a few bucks more. Let’s say it would go for 70M in private auction; instead of giving 6 players 10M each they would invest, pay 12M for one member so those 70M are not used to strengthen their competitors.

  3. YamadaMedia says

    Not a fan of ICANN but I hope they keep they lawsuit ctive. Why does ICANN need $100 million in a “whatever we want” account? Aren’t they a non-profit?

    • Ryan says

      because the human race is a greedy one, this is just how it works.

      Happens everyday, nobody is held accountable, and people just do as they want.

    • janedoe says

      A non-profit needs to cover expenses…the question isn’t about them having the money, it is what they do with it.

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