PFF Adjunct Fellow Mike Palage led this extraordinary discussion of ICANN’s origins, evolution and future with four of ICANN’s “Founding Fathers”: Milton Mueller (author of Ruling the Root), law professor David Johnson, ICANN’s first CEO Mike Roberts and then ICANN CEO Paul Twomey. In particular, the group discussed ICANN’s mission, governance structure, and accountability; the difficult issue of new generic Top Level Domain names (gTLDs) and trademark concerns; and ICANN’s future relationship with the U.S. government. Be sure to check out the handy ICANN Glossary on page 33. The audio can be downloaded here.

Here’s the transcript (PDF):

My PFF colleague Mike Palage just released a paper about a series of recent applications for national trademark rights in terms that correspond to likely strings for new top-level domain names, or TLDs, (e.g., “.BLOG”). These attempts highlight just one way in which ICANN’s new generic TLD (gTLD) application process is likely to be “gamed.” But it is also a strategy to which some trademark holders may feel compelled to resort to defend their rights to that string. Unfortunately, it does not appear that ICANN is addressing these important public policy considerations. In fact, based upon some of the provisions in the proposed draft registry agreements, it appears that ICANN staff’s actions may increase, rather than decrease, the ambiguity that opens the door to such gaming of the system.

http://d.scribd.com/ScribdViewer.swf?document_id=17847370&access_key=key-17v70dtd7qa1zrmq3z6x&page=1&version=1&viewMode=list

PFF Adjunct Fellow Mike Palage, who served on the ICANN board from 2003 to 2006, filed these comments (PDF) on the NTIA’s recent Notice of Inquiry regarding ICANN’s future.  Mike’s four key points were as follows:

1. ICANN’s Periodic Review of its internal operations and supporting organizations has failed, and has become nothing more than a “perpetual motion machine of public comments and documentation producing no meaningful results.” Only a second Evolution and Reform Process can solve ICANN’s current deficiencies;
2. ICANN must hardcode into its policies and its contracts the principle that its policies cannot supersede national laws;
3. ICANN must cease any operational role in technical infrastructure as required by its bylaws and focus instead on its mission as a technical coordinator; and
4. Congress must avoid “kicking the JPA can down the road” and instead provide much-needed leadership by creating a solid foundation for ICANN 3.0 in legislation after proper consultation with the Government Accountability Office.

I’ve been working closely with PFF Adjunct Fellow & former ICANN Board member Michael D. Palage on ICANN issues.  Michael had this to say about the ongoing saga of ICANN’s attempt to create new gTLDs.

During the recent ICANN Board meeting in Mexico City, the Board authorized the creation and funding of an Implementation Recommendation Team (IRT).  This team was to be comprised of “an internationally diverse group of persons with knowledge, expertise, and experience in the fields of trademark, consumer protection, or competition law, and the interplay of trademarks and the domain name system to develop and propose solutions to the overarching issue of trademark protection in connection with the introduction of new gTLDs.” This IRT is tasked to produce a report for consideration by the ICANN community at the Sydney meeting.

The IRT consists of 24 members:

• Chairwoman Caroline G. Chicoine; and
• Seventeen members; and
• Six ex officio members:  Four IPC-elected officers and two-GNSO elected Board Directors (Bruce Tonkin and Rita Rodin Johnston).  

I have a number of friends and colleagues serving on this team and I wish them well in their important endeavor.

I’ve previously proposed a number of rights-protection mechanisms that IRT should consider.  Today, I offer a few suggestions that I hope will guide IRT as they embark on their important work tomorrow.  In particular, I hope they’ll implement some of my suggestions intended to make the IRT process more transparent-so the rest of the global Internet can follow along with their important work and provide constructive input where possible.

By Mike Palage,  PFF Adjunct Fellow & former ICANN Board  Member

TPI’s Tom Lenard and Larry White released a study yesterday entitled ICANN at a Crossroads:  A Proposal for Better Governance and Performance (PDF).  ICANN is, indeed, at a crossroads:  A number of critical Internet governance issues will be decided over the next 6-12 months-such as:

• How to roll out new gTLDs like .BLOG, which I’ve discussed here and here (PDF).
• ICANN’s future as an increasingly independent organization, which I’ve discussed here. 

There is an acute need to better educate the public and policymakers about these complex issues and about how ICANN works-something that will be addressed by my upcoming primer on ICANN.  For that reason, I welcome TPI’s contribution to this important debate about the future of the Internet.  I share TPI’s concerns about the inadequacy of mechanisms currently in place to ensure ICANN’s accountability and the absence of any checks on ICANN’s ever-expanding budget. 

But I strongly disagree with TPI’s conclusion that:

ICANN should remain a nonprofit organization, but it should be governed by and accountable to its direct users: the registries and the registrars.  The seats on ICANN’s board could be rotated among the major operators in a manner that would reflect the diversity of viewpoints among the registries and registrars.

Having worn many hats in the ICANN eco-system-as a consultant for both registries and registrars and as a business user and IP attorney-I must say that adopting this model of direct-user control would be suicidal for ICANN.  Filling the ICANN Board with registries and registrars would create at least the appearance of a cartel, allowing those opposed to ICANN’s underlying model of public/private-partnership to capture the organization.  Neither capture by private interests opposed to the “public” part of the model nor a counter-attack by those who object to the “private” part of the model would be a good thing for Internet users or ICANN stakeholders.

Having invested over 10 years of my life in ICANN’s diverse and inclusive public/private partnership model, I speak from first-hand experience that ICANN is far from perfect as an organization.  I’ve often feared that ICANN is heading in the wrong direction and I’ve never hesitated to say so. But despite these shortcomings, the various stakeholders I work with in the seemingly byzantine “ICANN process” remain as committed as ever to the principles set forth in NTIA’s 1998 White Paper as the foundations of Internet governance.  The staying-power of this shared belief in a common set of principles among all stakeholders reaffirms my faith in the public/private partnership-whatever other changes need to be made.

Lenard and White are right about one thing:  We do need a new model for ensuring ICANN’s accountability after the expiration of ICANN’s current relationship with the U.S. Government.  But the model they suggest isn’t it—as Steve Delbianco has pointed out.

ICANN has just released a second draft of its Applicant Guidebook, which would guide the creation of new generic topmore generic top-level domains (gTLDs) such as .BLOG, .NYC or .BMW. As ICANN itself declared (PDF), “New gTLDs will bring about the biggest change in the Internet since its inception nearly 40 years ago.”  PFF Adjunct Fellow Michael Palage and former ICANN Board member addressed the key problems with ICANN’s original proposal in his  paper ICANN’s “Go/ No-Go” Decision Concerning New gTLDs (PDF & embedded below), released earlier this week.

ICANN deserves credit for its detailed analysis of the many comments on the original draft which Mike summarized back in December.  ICANN also deserved credit for addressing two strong concerns of the global Internet community in response to the first draft:

• ICANN has removed its proposed 5% global domain name tax on all registry services, something Mike explains in greater detail in his “Go/No-Go” paper.
• ICANN has commissioned a badly-needed economic study on the dynamics of the domain name system “in broad.” But such a study must address how the fees ICANN collects from specific user communities relate to the actual costs of the services ICANN provides. The study should also consider why gTLDs should continue to provide such a disproportionate percentage of ICANN’s funding—currently 90%—given increasing competition between gTLDs and ccTLDs (e.g., the increasing use of .CN in China instead of .COM).

These concerns are part of a broader debate:  Will ICANN abide by its mandate to justify its fees based on recovering the costs of services associated with those fees, or will ICANN be free to continue “leveraging its monopoly over an essential facility of the Internet ( i.e., recommending additions to the Internet’s Root A Server) to charge whatever fees it wants?”  If, as Mike has discussed, ICANN walks away from its existing contractual relationship with the Department of Commerce and claims “fee simple absolute” ownership of the domain name system, who will enforce such a cost-recovery mandate?  

But ICANN simply “kicked the can down the road on the biggest concern”: how to minimize abusive domain name registrations ( e.g., cybersquatting, typosquatting, phishing, etc.) and reduce their impact on consumers. ICANN seems only to have made a vague promise to engage in additional outreach and consultation on this problem.  But Mike has proposed a number of potential solutions that are narrowly tailored to protect brand holders while respecting the fair use rights of other, including: 

• A Rebuttable Reserve Names List that would minimize the need for defensive registrations of marks that have been subject to abusive registrations by freezing registration of domain names (e.g., DELTA.AIR) that precisely correspond to those marks (e.g., Delta Airlines’ “Delta” trademark)  for the 60 days leading up to the opening of a new TLD (e.g., .AIR)—although anyone can rebut this presumption upon making a fair use showing under existing UDRP principles.
• An Expedited Domain Suspension Policy, either  as a new policy, or an amendment to the existing UDRP, that would provide a faster and more cost-effective remedy for abusive domain name registrations on an ongoing basis, but only for marks that have been registered with a national trademark authority (or the equivalent thereof).
• A Uniform Proxy Registration Policy governing the use of proxy services that substitute their own contact information for the registration’s information in the Whois database; such baseline practices and safeguards would reduce abuse that could harm legitimate users while preserving the option of proxy registration for privacy-sensitive users.

Washington Internet Daily (subscription-only) reports that:

ICANN is also rethinking its timeline for launching the gTLD application process, it said. There will be a third draft guidebook, making it unlikely applications will be accepted before December, it said. The new draft leaves provisions on four major issues – security and stability, malicious misconduct, trademark protection and demand/economic analysis of the need for new gTLDs – unchanged pending further discussion, ICANN said. Comments are due April 13. 

PFF wil continue to respond to ICANN’s call for comment to promote responsible expansion of the domain name space.  Here’s Mike’s paper (click on the rectangle-in-rectangle button at the top right to maximize the iPaper viewer):

I’ve been working closely with PFF’s new Adjunct Fellow Michael Palage on ICANN issues.  Here is his latest note , from the PFF blog.

ICANN recently proclaimed that the “Joint Project Agreement” (one of two contractual arrangements that ICANN has with the U.S. Department of Commerce (DoC) governing ICANN’s operations) will come to an end in September 2009. ICANN’s insistence on this point first became clear back in October 2008 at ICANN’s Washington, D.C. public forum on Improving Institutional Confidence when Peter Dengate Thrush, Chair of ICANN’s Board declared:

the Joint Project Agreement will conclude in September 2009. This is a legal fact, the date of expiry of the agreement. It’s not that anyone’s declared it or cancelled it; it was set up to expire in September 2009.

ICANN’s recently published 2008 Annual Report stuck to this theme:

“As we approach the conclusion of the Joint Project Agreement between the United States Department of Commerce and ICANN in September 2009…” – His Excellency Dr. Tarek Kamel, Minister of Communications and Information Technology, Arab Republic of Egypt

“Concluding the JPA in September 2009 is the next logical step in transition of the DNS to private sector management.” – ICANN Staff

“This consultation’s aim was for the community to discuss possible changes to ICANN in the lead-up to the completion of the JPA in September 2009.” – ICANN Staff

ICANN’s effort to make the termination of the JPA seem inevitable is concerning on two fronts. First, ICANN fails to mention that the current JPA appears to be merely an extension/revision of the original 1998 Memorandum of Understand (MoU) with DoC, which was set to expire in September 2000. Thus, because the JPA does not appear to be a free-standing agreement, but merely a continuation of MOU-as Bret Fausset argues in his excellent analysis of the relationship between the MoU and the JPA (also discussed by Milton Mueller). Therefore, it would be more correct to talk about whether the “MoU/JPA”-meaning the entire agreement as modified by the most current JPA-will expire or be extended.

Although previous MoUs with the USG have been extended, ICANN seems to be playing a game of chicken with the USG-hinting that it will not extend the current MoU/JPA if ICANN believes that it has completed its mission. Since it seems possible that ICANN really might walk away from the MoU/JPA without global stakeholder consensus that it has fully completed its obligations under the MoU/JPA, it is critical that we think about the consequences of such a unilateral move by ICANN. ICANN would likely argue that the bilateral contracts it has in place with registry operators-from which ICANN has carefully removed most references to the USG in recent years-provide a sufficient legal basis for ICANN to continue its current operations without direct USG oversight.

Some stakeholders have expressed concern about the idea of ICANN not being directly held accountable to any government entity, but ICANN appears to have attempted to preemptively address this concern, when it acknowledged in its 2008 Annual report that “[t]he California attorney general is the legal overseer of California nonprofit public benefit corporations such as ICANN.”

With the future stability and security of the Internet hanging in the balance, a neutral third party ought to analyze the current existing relationship between the USG and ICANN- before ICANN decides in September 2009 whether to renew the MoU/JPA or walk away. The General Accounting Office (GAO) is the ideal candidate for such a task, given its well-established reputation for independent analysis and prior experience studying these matters-especially its detailed 2000 analysis of the early stages of DoC’s relationship with ICANN.

In conducting a new study, GAO ought to consider the following issues:

• Since the original 2000 GAO report on ICANN, ICANN’s annual budget has skyrocketed to more than $60 million. That budget is set to grow significantly once ICANN begins accepting applications for new gTLDs on a large scale: Using ICANN’s own projections of new gTLD applicants and the minimum fees that will be assessed suggests that ICANN’s budget will soon exceed $100 million. As ICANN’s budget grows, one must ask: Are these fees-paid by largely gTLD registrants, registrars, and registries-consistent with the GAO’s conclusion in its 2000 report that ICANN is limited to recovering only actual costs (because “ICANN is a project partner with the Department under the memorandum of understanding, and it is the Department’s policy to allow project partners to recover only actual project costs”)?

• If ICANN walked away from the MoU/JPA without the USG formally acknowledging that ICANN had successful fulfilled its obligations under the agreement, would ICANN be able to rely upon its existing contracts with registry operators to continue collecting fees?

• In its 2000 report, the GAO asked whether the DoC “had the authority to transfer control of the authoritative root server to ICANN.” The GAO did not definitively answer this question, but concluded that it was “uncertain whether transferring control would involve the transfer of government property to a private entity” thus giving rise to implications involving the Property Clause of the U.S. Constitution (Art. IV, § 3, cl. 2.), which requires statutory authority for the disposal of government property.

• GAO investigated, but did not resolve, whether or not an act of Congress would thus be required to transfer control of the root server to ICANN. But GAO did not undertake the same analysis as to whether the contractual rights associated with the top-level domains themselves constituted “government property” requiring Congressional action for any to transfer to ICANN. This may have been because U.S. courts had, at that time, held that domain names were not “property” in general, but simply a contractual right to a service provided by the registration authority. But potentially changed with the Ninth Circuit’s 2003 decision in Kremen v. Network Solutions concerning sex.com. Thus, if the GAO concludes that ICANN’s gTLD contracts with registry operators involve property rights and that statutory authority would be required for the DoC to transfer these rights to ICANN, it is difficult to see how ICANN would be able to enforce these rights if ICANN ended its relationship with the USG as a project partner by walking away from the MoU/JPA-regardless of ICANN’s success in removing references to the USG in these contracts.

These are just some of the initial questions the GAO needs to answer well before September 2009, independent of whether the USG and ICANN decide to extend the MoU/JPA. The stakes are just too high for these questions to remain unanswered.

The intrepid Chris Soghoian has turned up an important wrinkle in Google’s services. Google pulled his AdWords ad pointing out AT&T’s campaign contributions to an Indiana politician after AT&T lodged a trademark complaint about it.

Trademark law is for preventing confusion about the source of goods and services. There is no possibility that Chris’ ad would confuse consumers in this way. He’s not providing telecommunications services, and his ad didn’t suggest it. Chris’ use of “AT&T” did not violate AT&T’s trademarks.

The subject matter of Chris’ ad is an important part of our national discourse, and something people should be able to run ads about on a platform like Google. It would be, well, evil, to kick small public policy advocates to the curb in favor of big corporations.

A company like Google is in a tough spot, of course, trying to adjudicate trademark claims at scale. But it is not acceptable to treat trademark complaints as proven just for having been submitted.

Google should take some steps to make its process more fair, such as by allowing advertisers to respond to a trademark complaint before Google acts on it. Much of the process could be automated, and it could explain to both sides what trademark rights include – and what they don’t. If after a few automated steps, the two remained at loggerheads, Google employees could take a look to see whether the claim or the response were meritorious. (A trained monkey could have determined that Chris’ ad is not a trademark violation.)

In close cases, Google should leave it to the parties to resolve, while it works in the courts to generate a substantive body of law that service providers in the position of Google are not properly liable for the trademark infringements of users. (My brief pitch for common law findings of “no liability” in such situations – as opposed to statutory protections like CDA section 230 – starts at minute 22 of this video.)

Would these ideas increase Google’s cost and potential liability? Yes, some. But Google should embrace those costs as it educates its users, employees, courts, and – most important – trademark holders about what trademark does and does not do.

Kudos to Chris for his tenacity. Google, fix this.