ICANN Files Memorandum In Support Of Dismissing Suit Over .Web

ICANN filed this  memorandum in support (pdf) of its motion to dismiss over lawsuit that IMAGE ONLINE DESIGN, INC a previously applicant for .Web filed against ICANN last year.

Here are the highlights of the ICANN filing:

In 2000, IOD executed a release in favor of ICANN so that ICANN would consider IOD’s application to operate a .WEB TLD. IOD knew that ICANN might decline to award IOD the requested TLD, or might award the TLD to a different entity, but IOD specifically released ICANN from claims related to IOD’s 2000 Application and ICANN’s establishment or failure to establish a .WEB TLD. The fact that twelve years passed before ICANN accepted new applications for the .WEB TLD does not mean that the language in the release is somehow less effective.

The release is just as enforceable today as in 2000.

In its 2000 Application, IOD released ICANN “from any and all claims and liabilities relating in any way to (a) any action or inaction by or on behalf of ICANN in connection with this application or (b) the establishment or failure to establish a new TLD.” (Request for Judicial Notice (“RJN”) submitted with ICANN’s Motion, California courts have routinely upheld

In fact, it is well-settled under California law that corporations “are entitled to contract to limit the liability of one to the other, or otherwise allocate the risk of doing business.”

First, IOD argues that, under California Civil Code section 1542, it did not release ICANN “from any claim that it was not aware of in 2000” and therefore did not release the claims alleged in its Complaint.
The problem with IOD’s argument is that IOD expressly contemplated in 2000 – and therefore released ICANN from – the exact claims that IOD now asserts. IOD’s contract claims, for instance, are based on the central allegation that ICANN failed to act on IOD’s 2000 Application for the .WEB TLD.
The release IOD signed in 2000 expressly contemplate and exempts ICANN from liability for claims relating to “any action or inaction by or on behalf of ICANN in connection with [IOD’s] application.”

Likewise, IOD was well aware of its potential trademark claims before it executed the release in the 2000 Application because it was in the process of litigating those claims.

Second, IOD’s attempt to avoid dismissal of its claims by arguing that the release is invalid as against public policy is also deficient.
Because ICANN does not contend that IOD released “unknown” claims, California Civil Code section 1542 has no bearing here.
Finally, even if it could be claimed that IOD’s 2000 Application “affected the public interest,” the release would still be valid because California Civil Code  Section 1668 is limited to contracts exempting complete responsibility for all “fraud, willful injury to the person or property of another, or violation of law, whether  willful or negligent.”

Nothing in the Application purports to exempt ICANN from all forms of “fraud, or willful injury” to IOD’s property, “or violation of the law,” and IOD has presented no evidence or argument of any such intention or conduct on ICANN’s part. Indeed, the exculpatory clause does not permit ICANN to violate any and every law with impunity. It merely bars suit by IOD on claims relating to ICANN’s action or inaction with respect to IOD’s 2000 Application or “the establishment or failure to establish a new TLD.”

In sum, the 2000 Application and its release are valid and proper under California law

IOD’s Breach Of Contract Claims Should Be Dismissed.

IOD argues that ICANN breached a contract with IOD by failing to “consider” IOD’s 2000 Application for a .WEB TLD before accepting seven new applications for the .WEB TLD in 2012 as part of an entirely new TLD program.

First, IOD identifies no facts in the Complaint supporting IOD’s conclusory claim that ICANN never considered IOD’s 2000 application.
The opposite, in fact, is true.
Specifically, IOD submitted its application for the .WEB TLD on October 1, 2000.
Thereafter, “[t]he applications and the public comments [pertaining to each application] were carefully reviewed by technical, financial, and legal advisors, who applied the criteria set forth in the various materials previously published by ICANN.”
This evaluation team produced a 326- page report that summarized the team’s findings with respect to each application, including IOD.
IOD had the opportunity to, and in fact did, submit comments on this report.
 IOD then filed a request that ICANN reconsider its decision not to approve IOD’s .WEB TLD.
In denying that request, ICANN detailed some of the reasons why ICANN did not select IOD’s 2000 Application.
These facts demonstrate beyond question that ICANN considered IOD’s 2000 Application. And this is not the result of a “hyper-technical” or “strained interpretation of ‘consider,’” as posited by IOD. . IOD cannot ignore these facts in the hopes of evading dismissal.

To the extent IOD is arguing that to “consider” IOD’s 2000 Application ICANN must have issued a formal rejection of the application, IOD has failed to identify any contractual term requiring such action.

As ICANN demonstrated in its Motion – and as IOD failed to challenge in its Opposition – the documents forming the 2000 Application make clear that ICANN would “evaluat[e] all of the applications received” and, in mid-November 2000, “announce its selection of applications for negotiations toward agreements” with any applicants it approved.

There was no promise that ICANN would do anything other than announce the TLDs it selected for approval, which is exactly what ICANN did.

IOD claims, without citation, that statements made by a member of ICANN’s Board of Directors somehow support its breach of contract claim.

There is no allegation, however – and IOD cannot plausibly contend – that these alleged statements are somehow part of the contract ICANN and IOD executed before the statements were made.

IOD’s Opposition does not salvage its trademark claims from their substantive deficiencies. The claims remain unripe and speculative and impossible to adjudicate at this stage. IOD has not identified any facts or law demonstrating that its alleged use of the .WEB trademark to sell “mouse pads,” “fanny packs” and “backpacks” is somehow impinged by ICANN’s unrelated receipt of applications to run a .WEB TLD. In addition, IOD has not identified any facts or law demonstrating that it enjoys common law trademark rights in a .WEB TLD, or why this Court’s 2000 ruling that IOD enjoyed no such rights is distinguishable today.

As set forth in ICANN’s Motion, to state a claim for trademark infringement under 15 U.S.C. section 1114, IOD must allege facts plausibly suggesting that:

(1) it has a valid, protectable trademark; (2) ICANN used an infringing mark in commerce; and (3) the infringing mark is likely to cause consumer confusion.
1  First, the Complaint contains no facts plausibly suggesting that ICANN has “used” the alleged .WEB trademark in “the sale or advertising” of ICANN’s own services.
Nor is there any plausible justification – and IOD offers none – to infer that ICANN would use the .WEB mark to market its own services.

Second, assuming ICANN were to “use” the .WEB trademark in the sale and advertising of its own services, there is no likelihood of confusion because goods and services covered by IOD’s mark – “mouse pads,” “fanny packs” and “backpacks” – are totally unrelated to ICANN’s only operations, the coordination of the Internet’s DNS. Ironically, IOD claims that it is too early to make this determination (which contradicts IOD’s argument that its trademark claims are ripe), but the Court can determine as a matter of law that the goods and services are unrelated, which permits dismissal of the claims.

C. IOD’s Section 1125 trademark infringement claim remains deficient.

This Court already has found that the .WEB TLD enjoys no common law trademark protection under 15 U.S.C. section 1125 because the TLD does not indicate source to a potential domain name registrant or a potential web site visitor.

In short, the Complaint is devoid of any facts upon which IOD can plausibly state a claim for relief under Section 1125. IOD’s alleged .WEB mark is nothing more than a generic TLD, with no source-identifying function.

For the foregoing reasons, ICANN respectfully requests that its Motion to Dismiss be granted in its entirety.

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