Webcentral, whose best known brand is Melbourne IT, has recommended shareholders accept a late bid from Australian telecommunications carrier 5G Networks rather than a revised bid from Web.com.
The ailing Webcentral Group, which has seen its stockmarket value plummet on the Australian Stock Exchange over the last 16 months, has been swallowed up by the Web.com Group which sees the end of Australian ownership of the country’s first domain name registrar, Melbourne IT.
Heâs about to complete his third three-year term on the ICANN board in November, the limit anyone is allowed to serve. So Melbourne ITâs Chief Strategy Officer Bruce Tonkin will be replaced on the board by Becky Burr, Neustarâs Deputy General Counsel and Chief Privacy Officer.
Burr has been elected by registries, and registrars to serve on the Board of Directors. Burr has long been an advocate for private sector leadership and a restrained ICANN, having been involved since its creation, first as the head of NTIAâs Office of International Affairs in 1998, and most recently providing leadership for enhanced accountability as part of ICANNâs transition to a fully independent multi-stakeholder body. She has been a strong proponent for contracted parties throughout ICANNâs history, including as a legal advocate for individual registries, and for the Registrar Stakeholder Group in negotiating the 2013 Registrar Accreditation Agreement. Becky has also been active on behalf of country code top-level domains, serving on the Country Code Name Supporting Organization Council since 2006.
âVery few people have the breadth and depth of experience across the ICANN eco-system that Becky brings to the table,â said Lisa Hook, CEO and President, Neustar. âBeckyâs dedication to the ICANN community over the years, her willingness to speak truth to power, and her demonstrated success in bridging differences and building consensus across the ICANN community uniquely qualify her for this role. I have no doubt that Becky will represent all stakeholders with the utmost integrity, transparency and leadership,â she added.
Becky Burr will commence her role on the Board in November 2016, when Bruce Tonkin, who has ably represented ICANNâs Contracted Parties House for the past nine years, steps down.
âI am honored to represent ICANN Registries and Registrars and to serve the entire ICANN community on the ICANN Board,â said Becky Burr, Deputy General Counsel and Chief Privacy Officer, Neustar. âThe IANA transition and the important accountability reforms now underway place us at an important constitutional crossroad. I am delighted to have the opportunity to be an advocate on the Board for enthusiastic partnering with the community to finish this important work,â she added.
âBecky will be a valued addition to the ICANN Board,â said Dr. Stephen D. Crocker, ICANN Board Chair. âShe has been involved with ICANN for decades, most recently working on efforts to enhance the organizationâs accountability and the development of a proposal to transition the stewardship of some key Internet technical functions from the U.S. government to the global Internet community.â
Melbourne IT has sold off its digital marketing division, Digital Brand Services, to the US-based Corporation Services Company (CSC) for A$152.5 million.
DBS provides online brand protection and consultancy services to large global organisations seeking to maximise the value of their online assets including registering and selling domain names and providing services to protect a brandâs image online. The division was created in 2008 when Melbourne IT combined its Corporate Brand Services division with the Verisign DBMS business which the company had acquired for US$50 million.
The sale seems to represent very good value for Melbourne IT, and is the equivalent to 95 percent of Melbourne ITâs market capitalisation pre-DBS sale (as of 11 March 2013) of $160 million. Melbourne IT say the sale achieves the Boardâs stated objective of its strategic review to unlock shareholder value by realising the intrinsic value of its businesses.
âThe Board firmly believes this transaction is in the interests of shareholders,â said Melbourne IT Chairman, Simon Jones.
âThe sale of DBS is a substantial result for shareholders. The transaction has crystallised a value for the business almost equivalent to Melbourne ITâs current market capitalisation, and represents a strong multiple of earnings relative to other recent transactions for this type of business. While this was not a business that we had specifically earmarked for sale, given the value creation provided by the transaction, this was an opportunity which could not be ignored,â Melbourne IT CEO and Managing Director, Theo Hnarakis, said.
âManagement and the Board are now concentrating on updating the strategic plan for the business following the divestiture so we can provide clarity to shareholders before the AGM in May. We are confident that Melbourne ITâs remaining business divisions will benefit significantly from the arrival of new gTLDs, the completion of the Transformation program, and managementâs clearer focus on executing our plans,â he said.
âWe were attracted to the global scale and capabilities of DBS to combine with CSCâs leadership position in providing corporate domain and online services to create the best partner for companies worldwide to turn to for helping them manage, promote and protect their brands in the digital marketplace, said Corporation Service Company (CSC) Vice President, Jim Stoltzfus.
Melbourne IT reported a five percent year-on-year decrease in revenue while announcing its full year results for 2012, but this included significant investment to prepare for the arrival of new gTLDs in 2013 and beyond – something they believe will drive an increase in demand for the company’s services.The domain name registrar and consulting company believes new gTLDs are expected to drive an increase in demand for domain strategy consulting and registration revenue, brand protection growth and will see the commencement of more than 110 ‘.brand’ registry services contracts from the second half of 2013 onwards.”2013 will be a significant inflection point for Melbourne IT,” Melbourne IT CEO and Managing Director Theo Hnarakis said. “Although it is too early in the financial year to provide any detailed guidance for 2013 – particularly given the strategic review is in progress – we see good growth opportunities ahead for our business and by successfully executing our strategies, we expect the performance of each of our divisions to be maintained or improve in 2013 as we invest further in our people, marketing, systems transformation and enhancing the customer experience.”Speaking about brand protecting in new gTLDs, Hnarakis told the Australian Financial Review:
“We have 3800 corporate customers, many of which are very defensively-oriented in particular brands. When these new extensions are launched, they naturally register that domain name to ensure nobody else can secure that name. Even if you were to run that multiple down significantly you would still see a significant lift in revenue from the middle of 2013 right through to 2014.”Hnarakis also said sales from the 146 companies that had applied for a new domain name through Melbourne IT, as well as defensive registrations, would specifically boost division revenues this year. The company has spent in excess of $5 million on preparing systems and marketing for the domain push.Of the 146 applicants, 36 had said they would ‘park’ the domains for the foreseeable future, instead of actively using them as web addresses.”We’re very bullish in terms of the upsides for new [top-level domains] and brands.””It will really depend on the TLD. If it’s a popular one like .web you might see a significant number rivalling .xxx but if it’s a unique one like .food you might not get a lot of defensive registrations.”
A new report from Melbourne IT says brands need to prepare to protect their brands as new generic Top Level Domains are introduced, but that their impact will be minimal compared to the efforts required to protect brands in .com.In the report released this week, 2012 domain dispute trends were analysed and indicate the world’s large brands have their hands full dealing with existing domains like .com.The Melbourne IT Digital Brand Services’ (DBS) report used dispute data from the World Intellectual Property Organization (WIPO) and shows that .com was the domain most recovered from cybersquatters by brands with more than 3,475 domain names, almost triple the number of disputes in all other gTLDs combined. The first full year of operation for the .xxx domain yielded only 16 disputes filed with WIPO.What the Melbourne IT report does not note though is that while complaints to WIPO have increased 4.2 percent, total registrations of domain names in the year to the end of September increased by 12 percent according to Verisign’s latest Domain Name Industry Brief.But what the Melbourne IT report does note is that “there are also multiple ways of getting a domain suspended, cancelled or recovered from a cybersquatter outside of taking a UDRP action. These include private negotiation through ‘Cease & Desist ‘ letters threatening action , website take – down by a service provider or actually paying the squatter off to recover the name.””The domain industry and global brands have been looking for evidence to shed light on the predictions that the arrival of potential new gTLDs such as .web, .home and .sucks will drive cybersquatting to new highs, and the first year of .xxx has been closely watched as an indicator,” said Melbourne IT DBS Executive Vice President, Martin Burke.”Some will be quick to point out that 16 cases show the fears are just hype, but that ignores the fact that around 80,000 trademarks were registered in .xxx to protect brands before the gTLD even went live. What is more compelling is that .com accounts for 68% of WIPO domain disputes, and in our view that percentage is likely to remain high once the new gTLDs arrive, meaning the biggest problem for brands is actually one they are already having to deal with,” he said.”However, we do agree with trademark holders that it is likely cybersquatting cases will occur at the second level of new gTLDs, so it is imperative brands prepare now by considering which trademarks will need to be registered in ICANN’s Trademark Clearinghouse and developing their domain registration strategy for both protecting and promoting their brands in the new domains.”The Melbourne IT DBS report and news release is available for download from www.melbourneit.info/news-centre/Releases/cybersquatting-report.xml.
Is it really less than a week ago that Melbourne IT (MIT) hosted a Washington, DC forum on âTrademarks and New gTLDsâ? The calendar says that it was, but intervening events make the discussion that took place feel outdated already — given that the one item on which there was clear consensus among almost all event participants (ICANN moving forward with implementation of Uniform Rapid Suspension (URS)) appears to be launching, while ICANNâs new CEO subsequently sent a letter to Congress throwing cold water on two key items in the brand communityâs wish list.
The focus of the event was supposed to be MITâs High At-Risk Marks (HARM) proposal, which envisioned a circumscribed set of global, non-generic word trademarks receiving a higher level of required rights protection in new gTLDs. While we had strong concerns about some aspects of the HARM trial balloon â especially the notion that a URS brought against a HARM-listed mark would bring automatic domain suspension if the registrant did not pay a response fee within 48 hours â we nonetheless commend MIT for putting a well-reasoned and circumscribed proposal out for consideration. But the dayâs discussion ranged far beyond HARM, especially after brand representatives at the event made clear that its requirements were too restrictive for their taste. This led MIT CTO (and ICANN Vice Chair) Bruce Tonkin to remark post-event, âThere doesnât seem to be enough support for line-drawing.â So HARM, R.I.P., we hardly knew you.
Mr. Tonkin kicked off the event with remarks that the Applicant Guidebook (AG) contained a âminimum set of protectionsâ and that ânow is the time to review the mechanisms in light of the TLDs applied forâ. Most of the panelists chosen for the event represented brand interests and made predictable arguments for significant expansion of the breadth of listings in the Trademark Clearinghouse (TMC) and the length of its operation, as well as for converting URS from a limited supplement to the existing UDRP to a full-bore substitute, at a much cheaper price for complainants at the expense of cheapening registrant rights.
But some of the comments did surprise us, such as that of Dan Jaffe of the Association of National Advertisers (ANA), a group that had hoped to delay the acceptance of new gTLD applications. Mr. Jaffe declared that âthere is no URS at the present timeâ, which is certainly news to us as well as everyone else in the ICANN community who had debated its contours at extended length. We were also taken aback by Andrew Abrams of Google, who gave an interesting presentation on the various business models contained within its 98 gTLD applications â but them went on to endorse changing the URS by lowering its burden of proof to the same as a UDRP, and to imposing a
âloser paysâ rule on the registrant of even a single domain at issue. When the time came for audience comment ICA pointed out that this was a rather confounding endorsement from Google, which had helped lead the fight against the SOPA legislation for the exact reason that it would subject domains to suspension aka âcensorshipâ based upon allegations of IP violations but absent adequate due process for registrants. Our post-event conversation with Mr. Abrams indicated that Google may reexamine its URS position.
One panelist who stood out from the crowd was Jon Nevett of leading gTLD applicant Donuts, who made a strong argument that the AG should be considered closed and that any new rights protection mechanisms (RPMs) should only be considered in the context of a policy development process (PDP) applicable to all gTLDs. ICA, for its part, has long been on the record favoring initiation of a PDP for procedural UDRP reform, but it was pressure from brand interests that have deferred its start until at least mid-2015. Mr. Nevett pointed out that Donuts has additional rights protections baked into its applications, such as a Domain Protected Marks List (DPML), and made the case for allowing such experimentation by applicant groups to test the efficacy of such measures before even thinking about requiring them from all.
When the discussion was opened to the audience, ICA noted that the existing RPMs came out of a two year ICANN community debate and were unanimously endorsed by the GNSO Council and the ICANN Board, so they shouldnât be casually tinkered with â while not rejecting all proposals out of hand, we think there has to be a mighty high bar for any alterations.
As for the major brand rationale for performing RPM surgery â that there were 1400 unique gTLDs being applied for â we pointed out that by the time the Board approved the existing measures there was an expectation of at least 500-1,000 applications, and that the existing RPMs do scale for whatever number of new gTLDs come into being. We also made clear that since the URS had been adopted on the basis that it was to be a limited supplement to the UDRP, weâd strongly oppose any bait-and-switch attempt to convert it into a cut-rate UDRP substitute.
From other comments, it was also clear that many applicants, registries, and registrars were very concerned by any proposed alteration of the TMC warning system that would result in an inordinate number of false positives. The trademark for insurance company ING came in for several mentions, since any TMC registration warning system triggered by the multiple words containing such a trademark â such as domaining â could scare off potential registrants in droves.
As noted, the one item on which all parties seemed to agree was that ICANN was way overdue on URS implementation. Perhaps not coincidentally, the very next day an ICANN e-mail properly delegated control of URS implementation to the GNSO Council (see http://internetcommerce.org/URS_Implementation), with this to be a major discussion item at the upcoming Toronto meeting.
But other RPM expansions touted by brand owners at the HARM event got the cold shoulder in a letter sent last week by new ICANN CEO Fadi ChÃ©hade to Congressional leaders (letter available at http://www.icann.org/en/news/correspondence/chehade-to-leahy-et-al-19sep12-en).
In regard to possible extension of the TMC-related claims service requirement beyond 60 days, his letter stated:
There is nothing precluding registries from electing to continue to offer the trademark claims service beyond the required 60-day period; indeed the Applicant Guidebook incentivizes registries to provide rights protections that exceed minimum requirementsâ¦.For the first round of new gTLDs, ICANN is not in a position to unilaterally require today an extension of the 60-day minimum length of the trademark claims service. The 60-day period was reached through a multi-year, extensive process within the ICANN community. One reason for this is that there are existing IP Watch services that address this needs. Those community members that designed the Trademark Claims Service were cognizant of existing protections and sought to fill gap, not replace existing services and business models. (Emphasis added)
And, on another key RPM expansion being pushed by brand owners â going beyond exact matches of trademarks for TMC purposes — he had this to say:
It is important to note that the Trademark Clearinghouse is intended as a repository for existing legal rights, and not an adjudicator of such rights or creator of new rights. Extending the protections offered through the Trademark Clearinghouse to any form of name (such as the mark + generic term suggested in your letter) would potentially expand rights beyond those granted under trademark law and put the Clearinghouse in the role of making determinations as to the scope of particular rights. The principle that Â rights protections âshould protect the existing rights, but neither expand those rights nor create additional legal rights by trademark lawâ Â was key to the work of the Implementation Recommendation Teamâ¦Though ICANN cannot mandate that the Trademark Clearinghouse provide notices beyond those required in accordance with the Registry Agreement, there is nothing to prevent the Trademark Clearinghouse or others from offering additional services that would, for example, give notice regarding various forms of a trademark. (Emphasis added)
So what is the way forward in the wake of the HARM discussion and these subsequent ICANN actions? In his opening remarks, Mr. Tonkin outlined three potential routes:
- 1.Â Â Â âBest practicesâ implemented voluntarily by new gTLD applicants. — This already exists in proposals from Donuts, Uniregistry, and other applicants and requires nothing from ICANN except encouragement. Registrants are free to consider whether they wish to be subject to such additional measures before acquiring a domain at any new gTLD.
- 2.Â Â Â Â âFormal adviceâ to the ICANN Board from various ICANN constituencies, stakeholder groups, houses, and councils. â In our view, advice is fine but the GNSO Council, as the ICANN entity responsible for gTLD policy, must play a central and critical role lest we see more lobbying of the Governmental Advisory Committee (GAC) by brand interests designed to circumvent the Council, with subsequent political pressure on the ICANN Board such as that which has already resulted in some whittling down in registrantsâ procedural rights.
- 3.Â Â Â A formal PDP, the results of which would be mandatory for all gTLDs. â As Mr. Tonkin noted, this has the strongest impact but also takes the longest time. And itâs hard to envision a PDP that would consider new RPMs for presently nonexistent gTLDs as well as for those with tens of millions of domain registrations, such as .com, that could be completed prior to the expected early 2014 launch of new gTLDs.
So thatâs where things stand today, but clearly more surprises could be in store in the weeks leading up to the Toronto meeting.
As ICA prepares to fully participate in that Canadian forum, our number one priority will be, âFirst, do no harm â to registrant rights.â
Melbourne ITâs involvement with ICANN dates back to 1999, when ICANN awarded it one of the first five registrar licenses to compete with the then-monopoly of Network Solutions Inc. in registering domain names under .com, .net and .org. It remains in the top tier of Internet registrars today, with 4.5 million domains under management. It is also involved with several .brand new gTLD applications, including those of Singapore-based StarHub and the Australian Football League, for which it provided domain strategy and application consulting services while ARI Registry Services(a division of AusRegistry, the .AU ccTLD registry operator) will provide technical backend services.
Last, but certainly not least, Melbourne ITâs Chief Strategy Officer, Bruce Tonkin, who formerly Chaired ICANNâs GNSO Council (the policy arbiter for gTLDs), was elevated to the position of Vice Chair of ICANNâs Board of Directors in June 2011. (We note for the record that Dr. Tonkin recused himself from voting on all matters involving new gTLDs even before MITâs involvement with the above-referenced .brand applications, and due to potential conflicts does not serve on ICANNâs recently established New gTLD Program Committee.)
All of which adds up to say that we take any policy proposal coming from Melbourne IT very seriously â especially its new suggestions for further strengthening of the rights protection mechanisms (RPMs) for new gTLDs. On August 16th, MIT âreleased a Community Discussion Paper, entitled âMinimizing HARMâ which outlines a policy alternative whereby organizations with âHigh At-Risk Marks’ should be afforded greater protections at the second level (ie. names to the left of the dot), which ICANN could adopt to boost consumer protection.â (See www.melbourneit.info/news-centre/Releases/Melbourne-IT-Urges-ICANN-to-Consider-Stricter-Protections-to-Minimize-Consumer-and-Business-Harm-in-new-gTLDs for the related press release.) MIT is promoting its HARM proposal fairly aggressively â an open forum will be held to discuss it in Washington, DC on the afternoon of Tuesday, September 18th Â which any interested party can attend, although MIT requests that an RSVP be sent to RSVP@melbourneit.com by September 13th; MIT also plans to simultaneously webcast the discussion. And MIT also intends to promote further discussion of the HARM proposal at the upcoming Toronto ICANN meeting scheduled in October.
ICA has significant concerns about any reopening of the debate on RPMs for new gTLDs, as the existing ones â the Trademark Clearinghouse (TMC) and Uniform Rapid Suspension (URS) â were only agreed upon after two years of contentious debate within the ICANN community, and ICANNâs Board has since succumbed twice to pressure from the heavily-lobbied Governmental Advisory Committee (GAC) and further scaled back certain registrant protections in the URS. Also, while we accept at face value MITâs contention that the HARM proposal is motivated by a perception among some organizations that they will need to engage in substantial defensive registrations at the 1400 unique new gTLDs which may be added to the root over the next few years, there are many trademark interests which have repeatedly sought any opening to turn the URS into a cheap substitute for the UDRP by lowering the required burden of proof and adding a domain transfer option, while WIPO has been unremittingly hostile to the URS as presently constituted and would prefer an alternative that looks to us like the DNS version of SOPA. We also canât help but note that that the very same trademark interests who keep pushing for additional protections at new gTLDs are the same ones who have blocked any near-term consideration of UDRP reform — despite the fact that the UDRP is the only major ICANN policy that has never been reviewed, and the mind-boggling fact that ICANN accredits UDRP providers to cancel or transfer domains without any contractual controls or obligations.
Nevertheless, now that the initial launch date of the first new gTLDs has been pushed back to at least the first quarter of 2014, this reopened debate was probably inevitable and perhaps it is best that it be focused on a relatively restrained proposal such as that proffered by MIT. The full details can be found in the Discussion Paper, but the gist of the HARM proposal is:
- Â·Â Â Â Â Â Â Â Â HARM designation would be available to established global trademarks that match the rights holderâs second level domain name, and which are distinctive and do not match dictionary words in any of the six official UN languages.
- Â·Â Â Â Â Â Â Â Â The rights holder must demonstrate that the trademark has been subject to misleading and deceptive online conduct as demonstrated by multiple successful UDRPs, court actions, or similar evidence.
- Â·Â Â Â Â Â Â Â Â A trademark meeting these criteria could, for an additional one-time fee of $1-2,000, receives certain additional protections.
MIT estimates that a few thousand global marks would meet the screening criteria. However, we assume that many trademark interests will use the HARM proposal as a jumping-off point and seek to expand the range of eligible marks and associated protections while reducing the registration cost.
That is why it is critical that consideration of any new RPM proposal such as HARM go through ICANNâs standard Policy Development Process (PDP) with full involvement of the GNSO Council. This goes far beyond mere tweaks or implementation details of existing RPMs, and should only be considered by the Board if there is strong community consensus. And there is plenty of time for such formal review, given that we are at least sixteen months away from the launch of the first new gTLD.
We also have strong concerns in particular about one of the additional proposed protections, which is that a HARM-related domain at issue in a URS be suspended within 48 hours if the registrant has not paid a response fee within that period. That is an extremely short turnaround time, especially given that complainants control the timing of filings and can choose holidays and other periods when registrant responses are more likely to be delayed. ICANNâs Board has already bowed to GAC pressure and shortened the standard URS response time by a week, and we would oppose any further truncation for disputes that only involve allegations of trademark infringement absent strong evidence of ongoing criminal activities such as phishing, malware distribution, or payment system fraud.
Finally, we have pointed out to MIT that the discussion panel listed for the DC event does not contain any identifiable proponents of registrant rights, and they have advised us that additional participants will be added.
ICA intends to attend the DC HARM forum and to remain actively engaged on this and all other proposals for alterations of new gTLD RPMs. Our top priority will be to assure that nothing in HARM does any material harm to the due process rights of registrants at new gTLDs, and that the collective weight of adopted RPMs does not so discourage registrations at new gTLDs that their potential for competition and innovation is substantially undermined.
With the introduction of new generic Top Level Domains becoming a reality, a conference has been scheduled in Sydney, Australia, this coming November.The New TLD Summit: Asia Pac 2012 will be held at the Sydney Convention and Exhibition Centre from 19 to 21 November and is being organised by Brand Huddle, whose Director-Sales and Marketing is Andrew Pink, someone who has been intimately involved with the new TLD program for many years now.The conference aims to give those from a brand and legal background direct access to domain industry experts and digital thought leaders, ensuring that they have the knowledge and capability to navigate these new online environments for successful business outcomes.Pink says those attending the conference will gain knowledge and an insight into the new rights protection mechanisms and dispute resolution processes and how to navigate brands through the new digital landscape. Other issues that will be covered are the impact they will have on search, how to identify the right TLD environments to invest in and what to do with existing domain name portfolios.”In-house legal counsel, IP & trade mark firms, brand and digital strategists, marketing and digital agencies and those responsible for new gTLDs are all encouraged to attend,” Pink said.Speakers lined up to date include:
- Chris Disspain, auDA CEO and ICANN Board Member
- Bruce Tonkin, CSO Melbourne IT and ICANN Vice Chair
- Richard Foxworthy, Head of strategy and lead for the Dot Yellow Pages TLD application
- Tim Johnson, CEO Dot Kiwi
- Stuart Sheridan, Director Bullseye
- Zoe Warne, Co-Founder August
- Neil Brown, QC and Dispute panellist
- Jurgen Bebber, Principal Griffith Hack.
There is an early bird registration that ends on 7th September. For more information, and early bird registration info, go to www.newtldsummit.com.