Lawsuit Gives Domain Managers a XXX Headache

The group that manages the Internet’s address system has a new headache over its efforts to expand the number of new top-level domain names—this one over the .xxx domain.

The Internet Corporation for Assigned Names and Numbers approved the controversial higher-level domain in March for adult-oriented websites, designating ICM Registry to run it.

Manwin Licensing International, a Luxembourg-based company that runs Playboy’s online sites and other adult websites, and porn filmmaker Digital Playground filed an antitrust lawsuit Wednesday against ICANN and ICM Registry, saying the creation of the new .xxx extension was forcing businesses to buy “defensive registrations.”

The new X-rated domain will be open to any qualified applicant on Dec. 6. Trademark owners both in and outside the adult content industry had a chance to register their names earlier this fall. Non-adult-industry brand owners were given a chance to remove their trademarks entirely so that no one could launch an adult website with their trademarked name. ICM wouldn’t say how much it was charging.

“Such defensive registrations are necessary to preclude others from registering and using the owners' names in .xxx, and prevents the confusion or dilution in value of those names that would otherwise result,” Manwin and Digital Playground argued in their lawsuit filed in U.S. District Court in Los Angeles.

Kevin Gaut, a partner with Mitchell, Silberberg & Knupp, which filed the lawsuit on behalf of the two companies, said the process ICANN used to award the registry contract to ICM was not competitive because no other companies were allowed to bid. He also argued that ICANN failed to include restraints on how much ICM could charge registrants.

Gaut said Manwin and Digital Playground would like the court to order ICANN to shelve the current contract with ICM, reopen the bidding process to other companies, and limit defensive registrations and prices. A Manwin spokeswoman said her company has not sought to operate an adult domain in the past and has no plans to offer one in the future if given the opportunity. 

ICM says the lawsuit is baseless. “ICM Registry has been working on the development of this [domain name] for more than 10 years and has taken extensive measures to ensure it is being launched in the most lawful and responsible way possible,” ICM CEO Stuart Lawley said in a statement. An ICANN spokesman said the group’s lawyers are reviewing the lawsuit and declined further comment. 

ICANN has been fighting a rebellion among many major U.S. advertisers and corporations over its plan to open up the top-level domain name space to almost any new name—expanding the choices from .com and .net to just about anything, such as .shoes, .companyname and so on. ICANN is expected to start accepting applications under its new generic domain-name program in January.

However, a coalition led by the Association of National Advertisers is trying to block the program. The coalition sent a letter to Commerce Secretary John Bryson last week calling on the department to press ICANN to delay implementation of the new domain-name program. Commerce’s National Telecommunications and Information Administration oversees ICANN.