Jeffrey Stoler, Esq. on behalf of the Boston law firm of McCarter & English LLP has posted a second round of comments today telling ICANN that Donuts and Demand Media should be disqualified from owning new gTLD’s.
The first round of comments were posted on July to ICANN’s site.
Here is the new comment:
“”In our letter dated July 28, 2012 (the “July 28 Letter”), we sought to bring to ICANN’s attention information detailing why the 333 gTLD applications filed by Demand Media and Donuts (together hereinafter referred to as “Demand/Donuts”) should not survive the Background Screening standards of §§ 1.2.1 and 2.1 of the gTLD Applicant Guidebook, Version 2012-06-04 (hereinafter, the “Guidebook”).
“Subsequent to the date of that letter, additional facts increasing our concerns have come to light, and we write now to bring that information to ICANN’s attention.”
“Specifically, we wish to describe the following matters:”
“* As background, and as detailed in our July 28 Letter, eNom is both the registrar subsidiary of Demand Media and the company founded and run by Paul Stahura for many years prior to Mr. Stahura’s assuming the leadership of Demand Media and later becoming the founder and CEO of Donuts.
“On August 28, 2012, a panel of the National Arbitration Forum decided, in Uprising Communications Group, LLC v. Whois Privacy Protection Service, Inc./Whois Agent, that eNom was a “notorious cybersquatter” with a “history of [bad-faith] UDRP decisions.” The panel firmly rejected eNom’s contentions of innocence in the case – particularly eNom’s position that “stay brutal” is a common and generic term of speech – and ruled that eNom had acted in bad faith.
“This decision brings the total number of rulings against the Demand Media Group (as defined in the July 28 Letter) to 40, of which 23 have been rendered within the past four years. ”
“These 23 decisions are 20 decisions more than the 3 adverse decisions the Guidebook states will constitute a pattern of bad faith conduct that would disqualify an applicant from being granted a gTLD under ICANN’s new gTLD program.”
“As background, and as also detailed in our July 28 Letter, Mr. Graham Stirling was a founding director of Donuts and, upon information and belief, is directly or indirectly a major investor in Donuts. On August 5 and 7, 2012, it was publicly reported that Mr. Stirling had registered the 27 self-evident and egregiously cybersquatting domain names listed in Exhibit A to this letter. In an attempt to conceal this cybersquatting activity, it has also been reported that Mr. Stirling abandoned his registration of those 27 domain names on August 8, 2012.”
The July 28 Letter identified various points of evidence supporting an inference that Demand Media and Donuts were operating in concert – the kind of concerted action that caused the UDRP panel in the Davis Vision case to hold, as the courts regularly do, that ostensibly separate corporations should be treated as one and the same when those entities are shown to act in concert.
The inference that Demand Media and Donuts were operating in concert – and should therefore be treated as one and the same – was strongly buttressed by Demand Media’s Securities & Exchange Commission filing on August 7, 2012. That filing revealed that Demand Media had made a multi-million dollar investment in a “strategic arrangement” with Donuts Inc. to control 107 of Donuts’ gTLD applications.
As stated in the July 28 Letter, “It would make a mockery of ICANN rules . . . if Demand Media Group and its executives could absolve themselves of their record of adverse UDRP decisions merely by forming a new entity [i.e., Donuts, Inc.].”
With the foregoing evidence in hand, it would seem only to heighten that mockery if Demand Media could then provide millions of dollars in financing to that new entity and expect ICANN not to notice.
In closing, we are hopeful that the foregoing will prove useful to ICANN in connection with its Background Screening process, and we invite you to be in touch with the undersigned if there are questions or concerns with which we could assist.””