Feels Like Blackmail as ICM Registry XXX Domains Spark Lawsuit Legal Problems

by editor

The dot-com world is about to crash for even federal trademark holders as the more than hush-hush release of .xxx domain names is unleashed--at a price. Now anyone can buy your good name as ICM Registry change is no longer top-secret. Now business owners, those owning marks and the U.S. courts can look forward to battles thanks to the company, ICANN and domain registration companies.
 
Would you be surprised to learn a lawsuit is already under way -- involving both ICANN and ICM Registry, the company that's sworn it's not legally liable?
 
Mass media seems to be skipping the fact for now. But legal action is already underway, in fact filed weeks before the .xxx domain names became publicly available on December 6. Manwin's filed an Anti-Trust suit on national soil in November. And despite the media's presentation, or lack of, the .xxx domain name availability is far more a scandal than simply a change to the online landscape. Things are about to get heated and very expensive.
 
Florida’s ICM Registry should be very, very ashamed. And so should ICANN for even considering approval of this scenario that’s going to cost the U.S. and world. Attorneys may be the only entity who can be very, very ecstatic. Legal action is surely already brewing with lawsuit after lawsuit in the pipeline because of the company – and the court system slated to be needlessly bogged down. It’s going to cost a lot of people. Some have already paid. Others will be paying in multiple ways. But the one that should be paying has yet to be held responsible.
 
For ICM Registry, it’s a good thing: The company’s apparently been working for a decade to get XXX website domain names as a reality. Its claim is that the new domains will be helpful. It’s all under the guise that offering XXX domains will somehow how separate the porn industry – making adult entertainment website now easily distinguishable, or the internet possibly safer. At the least it will make things more clear. Kind of. Supposedly .xxx is for adult content. The truth: It’s going to rake in million after million.
 
Here’s an oddity: The .xxx domain name marketing doesn’t seem to be so much about an adult playground, supposedly the intent, as just a playground. ICM Registry has very unusual marketing for the new domain name that it claims dedicated to adult entertainment. And that slogan hasn’t been very circulated – but for those interested, ICM Registry would apparently like you to know that .xxx is “the world’s coolest domain”. That slogan certainly seems to combat any idea of online safety – or the theory that .xxx is needed to separate out porn. Last checked, the most frequent users of the term “cool” tend to be teenagers. So, now the domain so necessary for separating out adult content is the “coolest”? That certainly sounds more intent on enticing teens than dissuading them.
 
But just as interesting, especially to those essentially being forced into purchase of .xxx domains, the marketing angle does create a question: Why does it seem like this new range of domains, presented as such an online necessity by ICM Registry, seem as if it’s being actively marketed to those completely outside of adult entertainment? Weirdly, the tagline or slogan of “Let’s be adult about it” is what was originally advertised before the issue became so public. But now it’s almost as if ICM Registry is intentionally trying to market the sale of premium-priced domains as, simply, a whole new internet. Now that does seem odd. Or not odd at all.
 
Here’s why that little change in marketing from “Let’s be adult about it” to “the world’s coolest domain” isn’t so surprising: For those under the impression that .xxx would be limited to adult content, that’s not the case. Requiring only pornographic or adult-related websites could obviously limit revenue. Businesses and people could have far less of a worry over protecting a current, unrelated domain – or having to potentially buy a new one.
 
The claim as to .xxx domain name benefits was that, supposedly, consumers wanting to visit adult entertainment sites would have reassurance or protection from risk of viruses, identity theft, credit card fraud or inadvertent exposure to ‘images’ of child abuse. And those .XXX domains are also going to give individuals and parents – with the desire to avoid adult entertainment sites -- opportunity to filter out the unwanted. Someone forgot to let ICM Registry know that Google and search engines already kind of do that. But, that’s right, .xxx domains were going to protect both adults and children. Note this supposed benefits don’t address the obvious – kids or teens who are actively searching for porn or adult entertainment.
 
So are .xxx domains going to help with online safety? Of course not. It only stands to reason that porn sites or adult entertainment entities that are more interested in operating in secrecy, with hopes of remaining under the radar, won’t be choosing those .xxx domains. And there isn’t anything to force adult entertainment operators to make that change. Those who don’t want to be easily detected simply won’t be marking themselves with that red ‘A’ so easily. So what’s the point? That seems to be the best question. And the answer seems to come down to a single word: Money.
 
The pre-registration period pertaining to forthcoming .xxx domain availability began September 7 and ended October 25, 2011 – a period known as “Sunrise” and holding lesser fees for exact name matches, but still an attached fee. If businesses or entities missed that time period that was virtually absent from publicized efforts, the next timeframe was dubbed “Landrush” where premium prices could be paid. “Landrush” is actually a common terminology used for new domain endings coming to market and becoming open for availability or purchase. But in this case with xxx domains, a more accurate description may have been “Avoiding Squatter’s Rights”.
 
ICM Registry is sparking a living disaster for the nation and its online world, businesses and even courts. It’s one unbelievable claim that the company’s aim includes “working proactively to balance the rights of … existing domain name holders and other trademark and intellectual property holders.”
 
While the company will no doubt argue there’s no blackmail or extortion on its part according to legal definition, a lot of the world may have a hard time coming up with a better descriptor. Businesses feel they're being blackmailed to protect brand names. And it's not just the United States or businesses here affected. Even educational facilities and universities are buying up .xxx names to protect school brands abroad as Canada's Grant MacEwan University reportedly paid US $375 for each of its five domain names. That's nearly $2,000 grand the school surely could've used elsewhere. And it's a theme repeated across this nation as major U.S. universities are forced to buy .xxx domains to protect their brands in America. Ironically schools are spending money on .xxx domains as a battle over tuition fees and increases rages. The next student who wants to complain about fee hikes can be sure to send ICM Registry and ICANN 'thank you' cards.
 
If you already missed that the .xxx change was happening, since secrecy seems to have played a far larger role than any awareness in the .xxx domain name and availability scandal, then you didn’t pay -- yet. That’s not going to help you. You saved hundreds in a pre-registration fee but it could cost you many thousands, even many times over, down the line – depending how “valuable” your domain name may be to another business or someone else. So if you’re reading this now and think it could seriously affect you or your company, you just may consider kicking out the hundreds to talk with an attorney -- or contemplate how pissed it will make you feel to pony up the roughly sixty to one hundred bucks to a domain registration company. But you’ll only be able to do that if, in fact, the .xxx version of your trademarked or domain name is still available.
 
If it’s a popular name or your site receives a lot of traffic, that .xxx domain name just may be gone – snapped up by the one of those entities whom, just like during the internet’s rise, tried to grab every potentially popular domain name known to man. Those individuals, and companies, had the hope of becoming “rich” off .com addresses – sometimes, literally, off someone else’s name. And some actually did make some serious cash -- before the problem became bound for court.
 
For those who did get wind of the ICM Registry scandal in advance, they had the “option” to “opt out”. They got to pay for it. The company was charging hundreds of dollars for the right.
 
ICM has been raking in money with every entity that has tried to opt out of its specific name being publicly made available – charging hundreds per name, even to trademark holders, for the right to do so. Oh, and that little opt-out option -- that no longer exists as of December 6 -- was only good for 10 years. ICM Registry does guarantee “til death do us part” – and you’ll be paying for renewal of those vows. That is, as long as you remember to pay ICM Registry again. Otherwise you can look forward to that domain being publicly available for sale, in the “xxx” format, roughly a decade from now.
 
If you believe the main players of the adult entertainment industry are highly interested in ‘playing’, or hold similar views to the proposed necessity of .xxx domains, think again. The common them is majory players in the porn or adult industry aren’t happy – or even adamantly oppose the new availability. It may actually be that the adult entertainment industry’s been the most informed. And it doesn’t want to play.
 
It’s obviously not bad for their business but it is bad for business owners – and the courts.
 
It’s about to become lawsuit time as trademark holders could be forced to sue over rights to their name or over the demand, that money be exchanged, in order to opt out.
 
According to ICM Registry, don’t plan on suing the party responsible for the whole mess -- because the company claims legal action isn’t a possibility. That claim doesn’t necessarily seem true. Legal action seems to be on the horizon in the U.S. but it's already afoot internationally. In fact one business says ICM Registry and ICANN are guilty of conspiring.
 
In fact someone already is suing ICM Registry over what it perceives a problem with .xxx domains or effect. It's a company that happens to be based in Luxembourg, a business known as Manwin. It's in charge of managing You Porn, x Tube and other online destinations. Manwin is suing both ICANN and ICM Registry in what it claims is basically forcing businesses to pay for domain registration before cyber-squatters have the opportunity to grab them. That lawsuit isn't going down abroad, despite lack of news reference: It's happening right here in the United States. 
 
The United States District Court for the Central District of California received a filed suit by Manwin November 16, 2011 -- only weeks ago. The legal complaint against both ICANN and ICM Registry says Plaintiffs "maintain that ICANN and ICM conspired to eliminate competitive bidding and any market restraints for certain .XXX registry services, with the intent to injure competition and consumers." The 44-page lawsuit claims ICANN and ICM Registry are accused of “monopolistic conduct, price gouging, and anti-competitive and unfair practices.” Now if you're wondering who Manwin is -- or why it wouldn't be a business on par with Hustler responsible for making the move -- the answer might surprise you. It is.
 
It's a company you know well, possibly without knowing it. Manwin is based in Luxembourg but has offices worldwide and about 700 employees across the globe, where offices reside in Hamburg (Germany), London (UK), Montreal (Canada) -- and a little spot known as Los Angeles. Among a whole spectrum of popular adult websites, Manwin additionally operates and manages all “Playboy” online content and also happens to run Playboy Television worldwide -- with the “Playboy Plus Entertainment” label. Manwin is known for technology, including High Definition (HD) video streaming and website optimization that sets the company apart. 
 
And Manwin's size a an industry player with heft -- meaning Hustler can, in the interim, remain on standby or rely on the wait-and-see method. There's no sense wasting time and money on attorneys fees and court costs when someone's willing to bust out first, put out the expense, and possibly solve your problem for you.
 
That United States location may prove very important for Manwin, ICM Registry and ICANN. 
 
Don't think Hustler's not ticked. Hustler also wants ICM Registy to pay – if not financially then at least by backing off. In reponse to Hustler in the U.S., ICM Registry is claiming “you can’t sue us” in a white paper. Apparently the company responsible for setting the stage or creating a war for the general public and business owners t to fight, wants to declare itself exempt from any legal chaos.
 
Here’s what ICM Registry says in its white paper response to Hustler's claim: “Courts have held uniformly that the mere registration of a domain name does not amount to infringement of a mark similar to the name. They also have made clear that neither registry operators nor registrars are liable for infringement, dilution, or Anticybersquatting Consumer Protection Act expressly immunizes both registrars and registries from liability for registration of domain names. No court has ever held that a domain registry, which is a step removed from the registrars, can be held liable for the registration of a domain name incorporating another party’s trademark.”
 
It’s an intriguing response by ICM Registry? ‘We started this mess that’s going to cost you to legally defend yourselves, but you’re sure as hell not entitled to go after us’ seems to be the claim. But that remains to be seen. And at least one company plans to legally prove otherwise.
 
It hasn’t been just Hustler that’s been arguing with ICM. Adult companies Manwin, Pink Visual and AEBN have already been in battle. One of those may just change the landscape ICM has just begun to alter.
 
It seems ICM Registry is offering up a fallback scenario that’s apparently supposed to make trademark owners feel safer about .xxx domains or possible problems related to marks: “Separately, under the Rapid Evaluation Service, independent experts will make determinations, in certain cases within 48 hours, for claims involving well-known or inherently distinctive marks.” Translation: If you’re a Facebook, you might escape fate. For others, consider that grave to be already dug. You prove how “well-known” you are without specific, provided guidelines related to that determination made by another party.
 
The Free Speech Coalition [FSC] has already been intent on helping the adult industry combat the changes that major players don't want and plan to combat: FSC Executive Director Diane Duke has said the “FSC is inviting adult businesses to put ICM Registry on notice that they do not have permission to sell the .XXX version of their trademarked names and brands… It is critical that ICM Registry understand that the adult community will not tolerate ICM’s business model, which is built on frightening existing adult companies into paying ICM in order to protect their brand and trademark.”
 
Actually that “frightening” terminology is tactful but many would agree could easily be re-worded to “forcing” – and it’s extending far beyond “adult companies”. This is going to affect the entire online world, business owners whom have already fought to preserve trademark rights, and likely the nation’s legal system.
 
What does ICM have to say about the new .xxx domain availability? ICM Registry told AFP: "We've put a lot of money into this [xxx domain registration], and 10 years of blood, sweat and tears." That’s according to ICM chief executive Stuart Lawley. The exec says, "I feel validated." It’s great to know the company’s top exec feels validated in an action sure to bring blood, sweat, tears and a lot of pain to somany -- including companies that even hold a trademark and could possibly forced to battle problems legally or in court. ICM’s Lawley says: "It has been a long struggle but we [ICM Registry] stuck to our guns and took the high road." That “high road” is very debatable. Many are viewing what seems a very sneaky scenario as the ‘lowest of low’.
 
ICM Registry has “put a lot of money” into the maneuver because it’s going to make the company a lot of money. Make that more than a lot of money.
 
The opening of new xxx registrations seems to be operating under the guise that the move will help solve a problem or safety concerns – basically by shifting adult entertainment sites to its own world of domains. But it’s not slated to block porn to teenagers or really make the online world any safer for children or parents who are trying to block that aspect. And if there was strictly the best of intent, it’d seem that ICM Registry would have made sure to actually block the sale of domains with names protected by federal trademark.
 
Before today’s public release of domains, companies or entities could pay between roughly $200-$400 to “opt out” of having even a name used with trademark made openly available to the public for sale in the new xxx domain format. Strangely enough, as the clock ticked down – the 8 a.m. EST cutoff on the horizon -- and the general public seemingly entirely unaware, the news media wasn’t exactly addressing the issue either . Not until early this morning on December 6 when reports started to fly about the new .XXX availability. But that was after it was too late for many. And it wasn’t just the news with a marked absence of reference to the soon-to-be available adult entertainment domains.
 
Domain registration companies themselves haven’t been openly referencing the change either. That would be for good reason.
 
Of course this most recent change equals serious cash for companies specializing in or selling domain registrations. Perhaps the theory on behalf of registration companies is that refusing to really address the change -- or create awareness in advance -- equals innocence. There’s that excuse of no guilt due to no participation? To the contrary, many perceive serious guilt through a deliberate lack of information or awareness – especially when that lack of public awareness means you’re in line to make some serious cash in the near future.
 
Registration companies should be first in line, maybe next to and not even behind ICM and ICANN, for scrutiny and investigation as to their role – and participation or direct non-participation – in how they would be benefitting now and in the future.
 
The still-unaddressed fact remains that those companies offering domains for sale not only stand to make huge amounts of revenue off the newest .xxx offering but are absolutely guaranteed to profit from the change and availability.
 
Trying to protect yourself by buying your own name with an xxx-ending isn’t cheap. In fact it’s the most expensive destination yet, with Go Daddy charging roughly $100. The registration companies will likely argue that the steep pricing is somehow meant to discourage a gobbling of availability that never applied to dot-coms. It’s a theory that needs to be thrown out the window: Reality is that domain registration companies are going to financially benefit hugely either way -- whether an entity is snapping up the new names or an existing one is forced to buy the domain out of self-preservation.
 
If there’s a domain registrar or company that’s openly-publicized this little secret to even its own customers, that’d be news. Reps at one of the biggest were (supposedly) sheepishly admitting the company didn’t exactly want to be associated. Domain registration companies would be downright stupid to claim otherwise. Be sheepish. Be out of the spotlight. Right now is when all the finger-pointing and blame can be directed toward ICM Registry and even ICANN who approved the change. But it’s very interesting that among those who stand to benefit most are the domain registration companies currently remaining silent – and standing still.
 
Think or believe otherwise? It’s only day one of the new .xxx domain availability and already Network Solutions is pimping out its message of “Protect Your Brand With a .XXX Domain”.
 
Go Daddy isn’t quite speaking, so much. It’d be smart not to elaborate. Apparently Go Daddy just wants to help – or that’s the presentation through its Help Center for the .xxx domain registration. On the other hand, reps first seemed to portray ignorance before admitting knowledge. Strange. What’s also a bit strange is that the ICM Registry website plasters a Go Daddy ad front and center when prompting a search for available .xxx domains – while all other companies for registration appear out of sight and require a scroll down. Instead clicking the tab related to registrars doesn’t get you a Go Daddy ad but, oddly, Go Daddy is listed at the very top of the list from ICM. Surely there’s no relationship or correlation.
 
It all begs the question as to some inquiry or even investigation into relationships or financial “donations” between ICM Registry and domain registration companies. Registration companies may stand aside while others take the heat at the moment. It reflects no less guilt. Those registration companies are first in line for all the domain name sales sought – and those now basically required for owners to protect their brand, as Network Solutions so correctly phrases the situation.
 
If any domain registration company has the gall to claim otherwise, perhaps that company will be first in line to issue statement that it absolutely refuses to sell domains related to the .xxx availability. Freezing hell with flying pigs will occur first.
 
What does the new xxx domain registration mean for existing or established websites that aren’t in the adult entertainment industry, or even remotely related to porn? Like any new domain that enters the market, it means a possibility for confused visitors or lost website traffic – particularly for better, more well-established websites that already maintain good or quality content. Those names are the easiest target for someone wanting to snap up a name while hoping for confusion.
 
Visitors looking for a certain website could theoretically, accidentally end up on an adult entertainment site with a xxx domain that copies the name of an existing, well-known site. And xxx domain owners are sure to seek a nefarious or worthwhile way to garner position in search engines. The smartest way would be the simplest, tried-and-true method that’s already been employed: Just like websites have been doing all along – and the same reason decent and honest sites have been battling to maintain some type of presence in Google as the search engine attempts to extricate “content farms” – the new sites can employ the standard theft method.
 
Stealing copyrighted content to use as their own could outrank the owners that actually have rights to those words, causing another website to rank higher in SEO. It’s an activity that already takes time and effort to straighten out, when it actually can be -- in contacting search engines like Google to report the illegal activity. But whatever the battle thus far, this one could be worse: Now it’s not just content that could come up as matching, to potentially confuse search engines, but virtually identical names.
 
Are search engines like Google to blame? Not directly. But the company’s desire and need to rule out companies causing SEO problems seems to inadvertently have aided the new .xxx domains. If in fact Google is effectively doing what it’s hoped to effectively do for years – bring up the most relevant search results in place of what most users consider a bunch of crap – then those changes could logically help ICM Registry’s cause: Supposedly relegating adult entertainment sites to a new domain ending should mean that Google and other search engines now have an easier way to properly provide users the content they’re searching for – and that may mean a big problem for the adult entertainment or porn industry’s biggest players in terms of search or results.
 
If internet users now get trained to add that “xxx” after searches related to sex sites, it’s foreseeable that a huge shift in online traffic to well-established players could occur. As of now, a Google search for “hustler” brings up all kinds of stuff related to Larry Flynt’s brand – the stuff that Google sees fit as appropriate or most relevant to a bulk of users. Those search results include the brand’s home page and article after article related to the business and its products, excluding the dirty stuff from top results. But if internet users are suddenly trained to add that “xxx” after “hustler” then a big shift seems likely to occur: The existing stuff related to the business entity could suddenly drop or be ruled out. And that could mean a lot less traffic for a company like Hustler.
 
It’s no surprise that website after website uses the terms “hustler xxx” in combination. But it’s not the Hustler brand that tends to come up Number One in relation to that search. It would only make sense that a new domain using “xxx” specifically could now rank at the top in spots like Google, as the search engine tries to provide the most relevant. And that could “x” out at least part of Hustler’s traffic.
 
For fans or haters of the adult entertainment industry, the dilemma and concerns are understandable: Any company that’s built its brand, established itself and even gone to the lengths of trademark protection is now posed with the problem of potentially fighting against not only its very own name but rights associated with that name. And it’s bound to be very expensive – for everyone. Thank ICM Registry and ICANN, but don’t forget to include those registration companies that will be profiting greatly.