Non-Commercial Users Constituency (NCUC)
Domain Name Tasting
7 December 2007
The Final Outcomes Report of the ad hoc group on domain name tasting suggests a growing trend of registrants exploiting ICANN’s Add Grace Period (the “AGP”) to receive a full refund on the cost of registration by canceling their domain name registrations within five days. The AGP may have been adopted upon the assumption that all commercial uses of a domain name would require registration for a period longer than five days. Certain registrants, however, have discovered that they can profit from repeated use of extremely short-term registrations through the use of pay-per-click advertising or otherwise. A coordinated response by ICANN may be appropriate to close this loophole. This response, however, should not be disproportionate to the problem nor stem from any misconception of the issue.
Insofar as some registrants are exploiting the AGP to operate without paying any registrations costs, they are effectively forcing the registries to subsidize them. This was clearly not the intended use of the AGP, and action by ICANN may be appropriate to counter this growing practice. It remains to be seen, however, if the AGP should be removed in its entirely. The ad hoc group report indicates that the AGP may provide benefits to both registrants and registrars, and so completely eliminating the AGP risks eliminating these benefits as well. However, any reported benefits of the AGP are disputed and further elaboration is needed before recommending specific action.
One possible approach may be similar to that adopted by the Public Interest Registries (PIR) — the imposition of a modest ‘excess deletion’ fee. This approach could penalize those registrars with heavy deletions, thus forcing them to adopt policies that prevent registrants from exploiting the AGP. Since registrants looking to avoid paying registration costs will naturally flock to those registrars least vigilant against this abuse, registrars would have a substantial incentive to be vigilant against creative disguises of these practices. Yet unlike directly imposing a fee on all short-term registrations, this approach gives registrars significant flexibility to adopt effective practices tailored to their customer base and business model, and preserves the other advantages of the AGP.
Intellectual Property Issues
The intellectual property issues discussed in the ad-hoc group’s final report warrant special attention. In this context, “intellectual property” refers almost exclusively to trade and service marks, which are often referred to collectively as “trademarks.” The vast majority of the respondents to the RFI identified themselves as either intellectual property rights owners (37.93%) or representatives of intellectual property rights owners (51.23%). Consequently, intellectual property rights feature prominently in the responses.
The problem which domain tasting presents to trademark holders is not that the AGP creates a loophole which makes otherwise infringing activity legal. If a registrant makes use of a trademark in a manner that constitutes infringement, the holder of that trademark is protected through international treaty, the laws of various nations, and through ICANN’s own Uniform Dispute Resolution Policy. These protections still apply even if the period of registration is very brief. The problem is instead one of enforcement.
This distinction should be kept in mind by the GNSO and by any subsequent working group established to tackle this issue. Many of the responses to the RFI listed problems such as “erosion of brand names,” “erosion of reputation” and “loss of revenues