CircleID

It is clear that it is a small minority of domain investors and developers who are using tasting to abuse trademark rights of others. However, this practice creates problems for all of us. Internet Commerce Association (ICA) is interested in working with CADNA and others to stop this abusive practice. However, ICA wants to make sure that legitimate domain investment and development rights are not sacrificed to stop a few bad guys.

Alex is on the right track here, but I see one problem with his suggestion.  He says, “Those who weren’t interested in refunds would pay only the registration fee, now lower because it would no longer carry the weight of subsidizing the tasters.” I am not a lawyer nor have I been advised by one. In my opinion, this would require VeriSign to voluntarily reduce registration fees for .com and .net because they have a long term contract that specifies prices and even allows price increases. VeriSign is one of the benefactors of tasting. Despite some expenses to accommodate the add/delete requests, VeriSign makes money from tasting. It seems unlikely that a company with a fiduciary duty to their shareholders will reduce prices voluntarily to help end a profitable practice.

I wonder if ICANN’s fee for each registration could be made to be non-refundable to accomplish the same goal. Any funds obtained from tasting could be used to reduce the ICANN fee for all registrations. However, I am not optimistic that there would be any significant revenue from tasting. The numbers show that this practice depends upon no-cost registrations. Tasting will not be profitable at least on the scale that we see today with even a 20 cent cost per domain. This method would not have the same contractual pitfalls as reducing registration fees to the registries and should stop large scale tasting while maintaining a way for legitimate registration errors to be reversed at low cost.

Anyone who is interested in helping us preserve the rights of domain investors and developers is encouraged to join ICA. We welcome new members and need your support.

Michael Collins
Internet Commerce Association
www.InternetCommerce.org

Thanks Michael for taking the time to comment on the proposal.

I am unclear regarding the following:

(1) You suggest that tasting “creates problems for all of us.” It is not clear to me which “problems” you are referring to?

(2) You say that the article is on the “right track.” Are you referring to the suggested source of the problem or the offered solution?

I apologize for not being clear regarding the implied cost of registration. The article does not suggest an explicit refund, rather that the resulting registration fee would have an implicit cost saving, and thus, a benefit to each registrant.

As stated in the article, besides the recommendation to abolish the grace period, the solution provides incentives to VeriSign through premiums collected from the sale of refund insurance policies. Hence there is no issue with VeriSign’s “fiduciary duty to their shareholders.” In fact, the premiums can generate more income to the shareholders than under the current setting.

Alex,

Sorry, "all of us" is a little ambiguous. Trademark owners are damaged when their names are used by cybersquatters. Domain owners are damaged by a loss of confidence in internet commerce. Consumers lose confidence when a known brand name is used to sell an inferior product. Companies lose confidence in search advertising if they believe that it is supporting cybersquatting.

I think that you are on the right track by proposing a market-driven solution to the problem.

VeriSign's profit and position on this issue is complete speculation by me. Maybe you have talked to them and know more than me. However, I think that the cost of using add/delete grace period should be high enought to stop the practice of tasting. I don't think that the cost per domain would have to be high. Add/delete grace period should still be available for the original intent, allowing mistaken registrations to be refunded (though at a small cost).

If the cost of tasting is high enough to stop the practice, then how will the insurance fees that you propose replace current profit? If the insurance produces any revenue the plan does not succeed at stoping tasting.