Historical Resolution Tracking Feature » Consideration of Independent Review Panel's Final Declaration in the Donuts Inc. v. ICANN IRP

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Consideration of Independent Review Panel's Final Declaration in the Donuts Inc. v. ICANN IRP


Resolution of the ICANN Board
Topic: 
Processing the New gTLD Program applications at issue in the IRP consistent with the standard New gTLD Program processes.
Summary: 

Board authorizes the President and CEO, or his designee(s), to proceed with processing the New gTLD Program applications at issue in the IRP consistent with the standard New gTLD Program processes.

Category: 
Board
gTLDs
Meeting Date: 
Sat, 25 Jun 2016
Resolution Number: 
2016.06.25.06 – 2016.06.25.09
Resolution Text: 

Whereas, in May 2016, an Independent Review Process (IRP) Panel (Panel) issued its Final Declaration in the IRP filed by Donuts Inc. (Donuts) against ICANN (Final Declaration).

Whereas, Donuts specifically challenged the determinations rendered by separate expert panels upholding community objections brought against Donuts' applications for .SPORTS (.SPORTS Expert Determination) and .RUGBY (collectively, Expert Determinations).

Whereas, the Panel declared ICANN to be the prevailing party in the IRP and, among other things, declared that the Board's actions or inactions did not in any way violate ICANN's Articles of Incorporation (Articles) or Bylaws. (See Final Declaration, ¶ 225, https://www.icann.org/en/system/files/files/irp-donuts-final-declaration... [PDF, 7.55 MB].)

Whereas, the Panel further declared that Donuts shall bear all the fees and expenses and shall reimburse ICANN the sum of US$83,067.66, and the parties shall each bear their own legal fees.

Whereas, the Panel further declared that: (i) IRPs are limited to evaluating action or inaction of the Board; (ii) actions of experts appointed by dispute resolution providers do not equate to Board action or inaction, and are therefore not reviewable by an IRP panel; (iii) an IRP panel is not allowed to base its determinations on what it, itself, might have done, had it been the Board; (iv) the time for challenging the community objection process has passed; (v) the Board need not react merely because it has been petitioned to do so; (vi) the Board is not required to, and has not represented that it would, train dispute resolution experts; (vii) the lack of an appeal mechanism does not violate ICANN's Articles or Bylaws; (viii) the Board has no affirmative duty to consider each and every new gTLD application; and (ix) ICANN did not discriminate against Donuts by not implementing a review mechanism of community objections in general or of the community objections at issue in the Donuts IRP.

Whereas, the Panel also observed the following: (i) the community objection proceedings might benefit from three-member expert panels; (ii) further study could be useful to understand the potential tension that could result from allowing standard applications for strings with relatively open registration policies that could be associated with one or more communities; and (iii) the Panel's belief that establishing an appeals mechanism for community objection proceedings, after careful study, would not be inconsistent with ICANN's Articles and Bylaws.

Whereas, while the Panel declared that ICANN did not discriminate against Donuts and did not violate ICANN's Articles or Bylaws in not directing a re-evaluation of the community objections at issue in this IRP, the Panel opined that "it would not be inconsistent with ICANN's values and principles to provide for a rehearing of [the .SPORTS] objection, by a different expert (or three experts)."

Whereas, in accordance with Article IV, section 3.21 of ICANN's Bylaws, the Board has considered the Panel's Final Declaration.

Resolved (2016.06.25.06), the Board accepts the following findings of the Panel's Final Declaration: (i) ICANN is the prevailing party in the Donuts Inc. v. ICANN IRP; (ii) the IRP Panel's analysis is limited to declaring whether the Board has acted consistently with the provisions of ICANN's Articles and Bylaws; (iii) the Board acted consistently with the Articles and Bylaws; (iv) an IRP panel is not allowed to substitute its own judgment for that of the Board; (v) the time for challenging the Guidebook's standard for community objections has passed; (vi) the Board need not react merely because it has been petitioned to do so; (vii) the Board is not required to, and has not represented that it would, train dispute resolution experts; (viii) the lack of an appeal mechanism to contest the merits of the Expert Determinations is not a violation of ICANN's Articles or Bylaws; (ix) the actions of the experts appointed by the ICC do not equate to Board action or inaction, and are therefore not reviewable by an IRP panel; (x) the Board has no affirmative duty to individually consider each and every new gTLD application; (xi) ICANN did not discriminate against Donuts by not implementing a review mechanism of community objections in general or of the community objections at issue here; (xii) Donuts shall bear all the fees and expenses, and shall reimburse ICANN the sum of US$83,067.66; and (xiii) the parties shall each bear their own legal fees.

Resolved (2016.06.25.07), the Board notes the Panel's observations with respect to the community objection process referenced in the Whereas clauses above, and directs the President and CEO, or his designee(s), to ensure that the New gTLD Program Reviews take into consideration such issues raised by the Panel as they relate to the community objection process.

Resolved (2016.06.25.08), the Board concludes that nothing in the Final Declaration supports re-review of the .SPORTS Expert Determination, nor is it sufficiently "inconsistent" or "unreasonable" such that it warrants re-evaluation.

Resolved (2016.06.25.09), the Board authorizes the President and CEO, or his designee(s), to proceed with processing the New gTLD Program applications at issue in the IRP consistent with the standard New gTLD Program processes.

Rationale for Resolution: 

Donuts Inc. (Donuts) initiated Independent Review Process (IRP) proceedings challenging the separate expert determinations upholding community objections brought against Donuts' applications for .SPORTS (.SPORTS Expert Determination) and .RUGBY (collectively, Expert Determinations).

With respect to .RUGBY, Donuts contended that the expert determination was the result of what Donuts portrayed as procedural irregularities. With respect to .SPORTS, Donuts contended that the expert determination was the result of bias on the part of the expert panelist (.SPORTS Expert) appointed by the International Chamber of Commerce (ICC). Donuts' three primary arguments were as follows: (1) the .SPORTS Expert Determination "resulted from the objection panelist's conflict of interest"; (2) the Board had an "obligation" to ensure consistent application by the ICC and its expert panels of ICANN's Bylaws and the Guidebook; and (3) the Board failed to create a "review process" for objection determinations. The request for IRP (IRP Request) sought to compel the ICANN Board to reverse or vacate the community objection determinations, and reinstate Donuts' applications for .SPORTS and .RUGBY.

The Final Declaration was circulated to the parties on 12 May 2016. After consideration and discussion, pursuant to Article IV, Section 3.21 of the ICANN Bylaws, the Board has determined to adopt the findings of the Panel, which are summarized below, and can be found in full at https://www.icann.org/en/system/files/files/irp-donuts-final-declaration... [PDF, 7.55 MB].

The Panel found that it was charged with determining whether the Board's actions are consistent with the Articles of Incorporation (Articles) and Bylaws, and that the Panel was "duty-bound to focus on [the] three questions" enumerated in Article IV, Section 3.4 as to whether the Board acted without conflict of interest, exercised due diligence, and exercised independent judgment. (Final Declaration at ¶ 126.) The Panel further stated that, in determining whether the Board acted consistently with the Articles and Bylaws, the Panel is "not allow[ed]…to base its determinations on what it, itself, might have done, had it been the Board." (Id. at ¶ 133.)

Using the applicable standard of review, the Panel found that ICANN is the prevailing party in the Donuts Inc. v. ICANN IRP, and declared that "Donuts has not met its burden to demonstrate action or inaction by the Board that violated ICANN's Articles or its Bylaws." (Id. at ¶ 225.) The Panel further declared that "Donuts is to bear all the fees and expenses" and "shall reimburse ICANN the sum of US$83,067.66, representing that portion of said fees and expenses in excess of the apportioned costs previously incurred by ICANN." (Id. at ¶¶ 235-236.)

In addition, the Panel found that while the Guidebook permits the Board to individually consider new gTLD applications, the Board has no affirmative duty to do so in each and every case, sua sponte. (Id. at ¶¶ 185, 213.) "[A]t any given time the Board is confronted with [a] range of options and is entitled, indeed required, to balance the competing values listed in the Bylaws when deciding what, if anything, to do. The Board need not react merely because it has been petitioned to do so by a stakeholder, commentator or other observer." (Id. at ¶ 170.) The Panel also found that the actions of the experts appointed by the ICC do not equate to Board action or inaction, and are therefore not reviewable by an IRP panel. (Id. at ¶¶ 142, 153, 156, 159, 187.) "This Panel concludes given the foregoing, and in accord with the reasoning of other Panels, that the relationship between ICANN and the ICC is not such as to allow an IR Panel ‘[to] review the actions or inactions of ICANN's staff or any third parties, such as the [DRSP or objection experts] who provided services to ICANN.'" (Id. at ¶ 159.) The Panel further found that "the Board is not specifically required by any constituent document known to the Panel to institute training [of the experts appointed by the ICC]; nor has it represented that it would perform such training." (Id. at ¶ 172.)

The Panel also found that the time for challenging the community objection process as adopted has passed. (Id. at ¶¶ 136, 179.) The Panel also concluded that the lack of an appeal mechanism to contest the merits of the Expert Determinations is not a violation of ICANN's Articles or Bylaws. (Id. at ¶¶ 182-183.)

The Panel also made some observations for the Board's consideration. In particular, the Panel opined that "rather than using single expert panels, the community objection process might to [sic] advantage employ panels composed of three experts." (Id. at ¶ 229.) The Panel also observed that since applicants may pursue standard applications for strings with relatively open registration policies but which could be associated with one or more communities, there may be a "predictable conflict of expectations" and "the assumptions and policies that lead to this kind of tension warrant further study." (Id. at ¶ 231.) The Panel further noted that "some sort of appeals mechanism [for community objection determinations] might add predictability of outcome and produce greater satisfaction with the process by some," and "to do so in a sound fashion after careful study would be consistent with ICANN's Articles and Bylaws." (Id. at ¶ 181.)

The Board acknowledges the foregoing important observations by the Panel. The Board has considered the observations and notes that it will ensure that the New gTLD Program Reviews take into consideration the issues raised by the Panel as they relate to the community objection process.

Donuts also claimed that ICANN discriminated against Donuts by implementing a review mechanism to address certain string confusion determinations, while not permitting the re-evaluation of the community objections against Donuts' two applications. The Panel concluded that ICANN did not discriminate against Donuts by not implementing a review mechanism of community objections in general or of the community objections at issue here. (Id. at ¶¶ 220-221.) "The record does not allow the Panel to conclude that the considerable consistency issues raised in connection with the string similarity cases have emerged in connection with the community objection cases as a whole, or with respect to the two expert decisions giving rise to this IR." (Id. at ¶ 220.) While the Panel did not suggest that ICANN provide for a re-review of SportAccord's community objection to Donuts' application for .SPORTS, the Panel did note that "[c]oncerning the community objection proceeding brought by SportAccord in connection with .SPORTS, the [Panel] believes it would not be inconsistent with ICANN's values and principles to provide for a rehearing of that objection, by a different expert (or three experts)." (Id. at ¶ 230.)

On 21 June 2016, Donuts' counsel sent a letter to the Board requesting that the Board initiate a re-review of the community objection against Donuts' .SPORTS application by a three-member panel. (See 21 June 2016 letter available at https://www.icann.org/en/system/files/correspondence/genga-to-icann-boar... [PDF, 538 KB].) While Donuts' letter suggests that the IRP Panel "recommended" that ICANN should conduct a re-hearing, that is not an accurate statement and is belied by the Final Declaration. The Panel actually stated that it "believes it would not be inconsistent with ICANN's values and principles to provide for a rehearing of that objection, by a different expert (or three experts)." (Final Declaration at ¶ 230.) SportAccord later sent an email to the Board pointing out, among other things, that "the majority panel ruled in ICANN's favor and did not require any further action."

The Board acknowledges and has considered the Panel Declaration, as well as Donuts' 21 June 2016 letter and SportAccord's subsequent email, and concludes that the Panel did not recommend that the Board take the action that Donuts is suggesting. Having considered the Declaration and the community objection proceeding at issue, the Board does not think that re-review of the objection is warranted based on any of the IRP Panel statements in the Declaration. Further, the Board determined that the .SPORTS Expert Determination is not sufficiently "inconsistent" or "unreasonable" such that the underlying community objection proceeding resulting in the .SPORTS Expert Determination warrants re-evaluation. The SCO Final Review Mechanism was established by the NGPC on 12 October 2014, after consultation with the community, in order to address two SCO expert determinations that had conflicting expert determinations about the same strings issued by different expert panels, thus rendering their results to be so seemingly inconsistent and unreasonable as to warrant re-evaluation. (See https://www.icann.org/resources/board-material/resolutions-new-gtld-2014....) As part of its deliberations, the NGPC considered and determined that it was not appropriate to expand the scope of the proposed SCO Final Review Mechanism to include other expert determinations, such as expert determinations relating to community objections. Moreover, here, the expert determination with respect to Donuts' application for .SPORTS is not contrary to or inconsistent with another determination. Rather, Donuts merely disagrees with the results of the .SPORTS Expert Determination. Such is not a justification for subjecting the underlying community objection to re-evaluation. The Board finds that ICANN's Bylaws concerning core values and non-discriminatory treatment, and the particular circumstances and developments noted in the Final Declaration, do not support re-evaluation of the community objection proceeding leading to the .SPORTS Expert Determination.

As required, the Board has considered the Final Declaration. As this Board has previously indicated, the Board takes very seriously the results of one of ICANN's long-standing accountability mechanisms. Accordingly, and for the reasons set forth in this Resolution and Rationale, the Board has accepted the Panel's Final Declaration as indicated above.

Adopting the Panel's Final Declaration is not expected to have any direct financial impact on the organization or any direct impact on the security, stability or resiliency of the domain name system.

This is an Organizational Administrative function that does not require public comment.