ICANN Questions:
ICANN is in the process of reviewing Affinity Internet's TLD Application. As outlined in the October 23, 2000 TLD Application Review Update which
appears at http://www.icann.org/tlds/tld-review-update-23oct00.htm, ICANN may
"gather the additional information [it] require[s] by posing specific
questions to applicants in e-mail and requesting a written response."
Keeping in mind the goal to evaluate applications to operate or sponsor
new TLDs in as open and transparent a manner as possible, both the questions
posed by ICANN and the Applicant's responses will be publicly disclosed
on the ICANN website.
Accordingly, ICANN requests your reponses to the following questions:
1. Identify and summarize Applicant's assumptions
with respect to the existence of other general purpose TLDs in
determining the total number of registrations in your application. 2. State in detail your position as it relates to
possible legal claims by certain applicants and/or
non-applicant third parties based on alleged
trademark, patent or other violations of purported
rights in the TLDs identified in your application
3. If you receive a new TLD, state whether you will
indemnify ICANN for claims arising from legal
challenges regarding your right to operate the new
TLD. If you will indemnify ICANN, identify and
describe in detail the resources you propose to
utilize for the indemnification.
4. Hypothetically, if you receive .ebiz as a new TLD
instead of .biz, describe in detail the effect, if
any, on the pro forma financial statements submitted
with your application.
5. Hypothetically, if you receive .firm as a new TLD
instead of .biz, describe in detail the effect, if
any, on the pro forma financial statements submitted
with your application.
6.
Hypothetically, if you receive .inc as a new TLD
instead of .biz, describe in detail the effect, if
any, on the pro forma financial statements submitted
with your application.
7. Hypothetically, if you receive .real as a new TLD
instead of .biz, describe in detail the effect, if
any, on the pro forma financial statements submitted
with your application.
Affinity Internet Responses: 1.
We assumed that one general purpose TLD, not specifically related to
business, will be granted in this round, and that this will probably be
".web", ".info" or some other general name. We also assumed that if we are
granted one of the strings that we applied for, (.biz, .firm, .inc, etc,)
then no other specifically business oriented TLD string would be awarded at
this time.
In general, we assumed that from five to ten new TLDs will be created in
this round. We expect that a number of these will be specialized TLDs
(.kids, .xxx, .tel, etc.) which we believe will not materially effect our
success in obtaining registrations in our target market.
We therefore believe that much of the initial rush for names will be
diverted to the cheaper and unrestricted TLD (.web etc.). We however expect
that the same problems that have existed with .com, that is the prevalence
of domain name hoarding, speculation and cybersquatting, will quite quickly
become apparent in this unrestricted TLD. It is for this reason that we
forecast a relatively low number of registrations in the first year rising
very rapidly in year 2 as names in the unrestricted TLD are rapidly used up
by frivolous registrations.
We also expect that the growth of our TLD will be moderated as other
business related TLDs, which are either general in nature or cover specific
areas of business, are granted in subsequent rounds of TLD additions.
If no unrestricted TLD is granted in this first round we would expect our
number of registrations to be closer to our 10% "optimistic scenario" than
to the "expected scenario" detailed in our application materials.
2.
(a) Position as it relates to possible legal claims by
certain applicants and/or non-applicant third parties
based on alleged trademark violations
Our position in this regard is to review any validity
in any such claim and to address the claims in light
of any legal concerns. The main issues relate to
intellectual property rights and national boundaries.
We generally view trademarks from our own world view.
This, however, is not a reasonable perspective given
the global nature of the Internet.
With respect to the TLD, it appears that trademark
rights do not exist in respect of the TLD .biz at
present registered in all countries of the world. Of
course, should someone register .biz before a
trademark office for use in registration of domain
names, etc., we would address the issue in that
country. We do not believe that this is a serious
concern based on recent jurisprudence. That said, this
is a matter of civil litigation between us and another
party and should not involve ICANN in any way.
It will be our strict policy in our operation of the
TLD to not knowingly infringe on valid intellectual
property rights of third parties.
(b) Position as it relates to possible legal claims by
certain applicants and/or non-applicant third parties
based on alleged patent violations
It appears that patent rights do not exist in respect
of the TLD .biz at present. Of course, should someone
register a patent that prevents the use of .biz domain
names in a specific jurisdiction, we would effectively
be banned from registering domain names in that
country unless the patent is invalidated. It is
however very unlikely that someone would be granted a
patent preventing us from operating the TLD based on
the nature of Patent Law. That said, this is a matter
of civil litigation between us and another party and
should not involve ICANN in any way.
It will be our strict policy in our operation of the
TLD to not knowingly infringe on valid intellectual
property rights of third parties.
(c) Position as it relates to possible legal claims by
certain applicants and/or non-applicant third parties
based on alleged violations of purported rights in the
TLDs identified in your application.
We are unaware of existing rights in .biz. That said,
we have the above stated policy to not knowingly
infringe on valid intellectual property rights of
others.
It will be our position that any claims by third
parties will be independently evaluated. Clearly,
those with .biz in other roots will continue to
operate in those roots without complications. The use
of .biz in a new TLD in the ICANN root is neither
confusing nor likely to result in confusion since most
individuals cannot even access the other root systems.
Finally, we hold a position similar to that of ICANN
in regards to the general intellectual property rights
available to third parties with respect to domain name
registration. Quoting a letter written by Mr. Louis
Touton.
" This conclusion that there are no service-mark rights
in domain names with respect to registration services
under those domain names is supported by judicial
decisions as well. In Image Online Design, Inc. v.
CORE Ass'n, Case No. CV 99-11347 RJK (C.D. Cal. June
22, 2000), the plaintiff asserted trademark rights in
the name "web" as applied to the service of
registering domain names under the top-level domain
.web. The court granted summary judgment to the
defendants, finding as a matter of law that there
could be no trademark rights in the name "web" based
on its use in connection with the provision of
registration services under the .web domain:
"’In sum, Plaintiff's use of the mark .web in
connection with domain name preregistration services
does not confer trademark protection. As a gTLD, .web
does not indicate the source of the services; instead,
it indicates the type of services. The Court finds
that .web, as used here, falls out of the ambit of
trademark categorization. Further, even if it could be
categorized, .web is simply a generic term for
websites related to the World Wide Web. Accordingly,
the mark is not protectable.’ (emphasis in the
original)
"This result appears to apply not only in the United
States, but in other major countries as well. ICANN's
Governmental Advisory Committee (GAC), which consists
of representatives of approximately 30 governments
(including the United States) and intergovernmental
organizations (including the World Intellectual
Property Organization) issued a communiqué to ICANN in
August 1999 which gives the following advice to ICANN:
"’The GAC reaffirmed its May resolution that the
Internet naming system is a public resource and that
the management of a TLD registry must be in the public
interest.
Accordingly, the GAC considers that no private
intellectual or other property rights inhere to the
TLD itself nor accrue to the delegated manager of the
TLD as the result of such delegation.’
"In sum, it would appear that - activities in
registrating third-level domains under the domain name
"biz.com" do not confer on it any rights to exclude
others from engaging in the registration of
second-level domain names under the possible top-level
domain .biz, either in the United States or
elsewhere."
For the above reason, we view our policies as
sufficient to address the issues of intellectual
property rights of domain name owners, applicants and
third parties.
3. Affinity in will be prepared to indemnify
ICANN for claims arising from legal challenges
regarding our right to operate the new TLD. We expect
that the specific wording of this indemnity would be
subject to negotiation, but would protect ICANN from
the same types of intellectual property and other
liabilities dealt with in ICANN's contracts with
Network Solutions regarding the .com TLD. The
indemnification would be supported by the financial
resources of Affinity Internet, Inc and appropriate
insurance policies provided by Affinity Internet, Inc.
4.-6. The following reply also answers questions 5 and 6 which
pose the same question in relation to .firm and .inc.
We believe that being granted any of the strings other
than .biz would reduce our expected number of
registrations by approximately 1/3rd as we do not
believe that any of the other strings would be as
popular with our prospective customers as .biz.
This has the effect of reducing our projected profits
by approximately 40% - 50% in years 1 - 5 and changing
our first year from a small expected profit to a loss
of $1,800,000.
Even under our pessimistic scenario, however, at
levels of registration half those in the expected
scenario, our initial capital injection would be
sufficient to maintain a positive cash flow balance.
For these reasons we clearly have a very strong
preference for the ".biz" TLD string.
As stated in answer to questions previously asked
about our assumptions, however, our estimates are
based on the assumption that no other TLD specifically
for the business community will be granted in this
round.
7. We request to withdraw our application for the ".real"
TLD at this time and we therefore present no analysis
for this string.
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