Controversy over .WEB auction takes a new turn as various sources today pointed to a lawsuit filed against ICANN by Ruby Glen LLC, a subsidiary of Donuts Inc.—the largest registry for new generic top-level domains (gTLDs). Plaintiff is seeking minimum of $10 million in damages and has demanded a jury trial for complaints that include breach of contract, negligence and unfair competition.

— Andrew Allemann from Domain Name Wire writes: “Donuts and at least two other applicants are concerned that someone is bankrolling applicant Nu Dot Co’s application for .web. They believe there might be a change of control to the entity and new people involved, which they allege might require a change to Nu Dot Co’s application. They want this week’s auction of last resort for .web postponed while the matter is investigated.”

— Kevin Murphy from Domain Incite writes: “But Donuts’ complaint strongly implies that ICANN is forcing the auction to go ahead because it stands to benefit financially.”

— [UPDATE / July 26] “Wednesday’s .Web auction must go on,” reports Allemann: “ICANN has responded to Donuts’ lawsuit over the .web top level domain name auction, saying that Donuts’ allegations are unfounded and that the auction should proceed as planned on Wednesday.”

— [UPADATE / August 9] “Donuts is demanding ICANN pay up the $22.5 million it reckons it is owed from the auction of the .web gTLD, which sold late last month [July 28] for $135 million,” Kevin Murphy reporting today in Domain Incite: “The company yesterday amended its existing California lawsuit against ICANN to allege that Verisign tried to avoid regulatory scrutiny by secretly bankrolling successful bidder Nu Dot Co.”