New Version of ICANN's gTLD Applicant Guidebook Upsets Domainer Community

On May 31, 2010, Internet Corporation for Assigned Names and Numbers’ (“ICANN”) recently issued the 4th Edition of the generic top-level domain name (“gTLDs”) Applicant Guidebook, which has raised serious concerns within the Domainer community.

Specifically, ICANN has introduced a new subsection to Section 1.2.1 (Eligibility) that provides for additional grounds for disqualifying a gTLD applicant. That Section now reads, in parts, as follows:

Circumstances where ICANN may deny an otherwise qualified application include, but are not limited to, instances where the applicant, or any partner, officer, director, or manager, or any other person or entity owning (or beneficially owning) 15% or more of the applicant:

(iv) is the subject of a pattern of decisions indicating liability for, or repeated practice of bad faith in regard to domain name registrations, including:

 (a) acquiring domain names primarily for the purpose of selling, renting or otherwise transferring the domain name registrations to the owner of a trademark or to a competitor…;

(b) registering domain names in order to prevent the owner of the trademark from reflecting the mark in a corresponding domain name;

(c) registering domain names for the purpose of disrupting the business of a competitor; or

(d) using domains with the intent to attract, for commercial gain, internet users to a web site or other online location, by way of creating likelihood of confusion with a trademark as to the source…

Domainers are wondering what’s a pattern of decisions? One case? Maybe three cases? Perhaps ten? And who will make that determination? Domainers are asking why business partnerships would assume risks of objection to a gTDL simply because a Domainer may own 15% or more of the applicant. Such objections would delay the issuance of gTLDs and would cost additional time and money - in excess of the already inflated application and registration price of $185k, not to mention to tens/hundreds of thousands more needed to launch a gTLD. Domainers are on edge because such a provision would likely have a chilling effect on Domainers’ participation in partnerships seeking gTLDs – even those Domainers with clean track records.

I recently posted the following comments on The Domains web site:

1. It would seem to me that a “pattern” must be supported with evidence of “clear” bad faith intent. In my opinion, a few “close” loses — that could have gone either way — should not result in disqualification. Take the recent Hayward case, for example. But maybe I’m just talking common sense, which seems to be a lost trait these days on this planet.

2. It’s not necessarily about choosing a domainer as a partner but rather choosing a domainer with a clear bad faith track record as a partner. Does any business want a partner with a track record of violating third party rights? One must then choose partners wisely. There must be a mechanism for brand owners to defend against those domainers that are clearly bad actors. Any better ideas out there?

I think I’m right. For those Domainers that are bad actors – they should not be entitled to own gTLDs (at least not as much as 15%).

The question: Where is that “bad actor” line drawn?

Any thoughts?