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04 Aug 2015

ICANN wins a very weak TLD lawsuit ICANN

Back in the 1990s as the Internet was starting to become visible to the world, several people had the bright idea of setting up their own top level domains and selling names in competition with what was then the monopoly registrar Network Solutions (NSI). For these new TLDs to be usable, either the TLD operators had to persuade people to use their root servers rather than the IANA servers, or else get their TLDs into the IANA root.

Attempts to get people to use other roots never were very successful, particularly after Eugene Kashpureff, the operator of alternate root AlterNIC made an ill-advised attempt to use DNS cache poisoning to hijack web traffic from the InterNIC website and pled guilty to wire fraud.

Some of the alternate root TLDs are still around, with operators who are under the impression that they have a right to have their TLDs in the IANA root. One of them is

In 1997, around the time the government was figuring out how to move the Internet out from its direct oversight, asked NSI to add their TLDs to the root, and NSI not surprisingly said no. then sued NSI for anti-trust, and subsequently added the National Science Foundation (NSI's contractor) as a defendant on First Amendment grounds. lost in court, appealed, and lost on appeal. The courts found that NSI was acting under a government contract, and anti-trust law doesn't apply to the government itself, and that (oversimplifying a little) domain names are like phone numbers, not speech that gets First Amendment protection.

Shortly after that, who was nothing if not persistent, applied to have 118 of its TLDs included in ICANN's 2000 round of TLD expansion, paying $50,000. ICANN never really defined its procedures to approve or deny applications, trickled out 12 new domains between 2001-2006, and never finally said yes or no to the rest of them, other than the contentious .XXX finally approved in 2011. was not the only applicant left hanging in that round.

In the current round, ICANN implicitly said that the 2000 round was over and as a consolation prize offered a one-time discount from the new $185,000 price to each prior applicant. ICANN got almost 2000 applications at $185K each, but not from who said (no doubt truthfully) that they couldn't afford 118 x $185K to reapply. So in 2012, they sued instead.

The complaint that started the suit is a 35 page rant accusing ICANN of an anti-competitive conspiracy with Verisign, Afilias and others to monopolize the domain market, infringing name.soace's trademarks in their TLDs, and various other charges.

They lost in district court again, and last week, they lost again on appeal. The grounds were somewhat different from last time. The courts held that you need more than a failed business plan to prove an anti-competitive conspiracy. ICANN had plausible business reasons for the higher prices (such as anticipating that disgruntled parties would sue them), and they of course they got plenty of applications from other people. The courts similarly dismiss a claim for intentional interference with's contracts since there is no evidence that ICANN intended to do so. Indeed, there is no evidence I can see that they were paying any attention to at all.

For the trademarks, when the district court ruled in 2013, none of the TLDs in the current round were active yet, the trademark issue was not "ripe" for decision, so at that time had no trademark claims to decide. By the time the appeals court ruled last week, dozens of the disputed names, from .ACADEMY to .SUCKS, were active, but appeals don't revisit the facts of the case, only whether the original court applied the law correctly. So the appeals court agreed that the trademark issue wasn't ripe in 2013 and that was that.

In principle, could refile a trademark claim, but it's extremely unlikely they could win. The complaint acknowledges that the US Patent and Trademark Office has not allowed TLDs as trademarks and has a couple of pages of hand waving about why this time is different, but I don't find it persuasive and I doubt a court would either.

Some press reports are spinning this as a big victory for ICANN, which it is not. This case was fatally weak when it was filed, and it's no surprise it turned out as it did.

One last thing I don't understand is who's paying for the suit.'s lawyers are Morrison Foerster, a large firm whose work does not come cheap. I see a page at where is trying to raise legal funds with little success, a total of about $2000 so far, which wouldn't pay for the first page of the complaint. The suit asks for damages which would pay the lawyers if they won, but with such a weak case I'd be surprised if anyone would take it on contingency.

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