Meltdown III: How top-down ‘implementation’ replaced bottom-up policymaking

In our third installment on ICANN’s accountability, we document the saga of the Trademark Clearinghouse (TMCH). The TMCH provides a clear example of the problem of staff-made policy. What was supposed to be a mere ‘implementation’ of a policy developed by ICANN’s bottom-up process suddenly became a different policy with a broader, stronger set of rights for trademark owners.  All of ICANN’s procedural protections proved to be useless against these obvious process violations.

In ICANN’s formal policy making process, representation of different stakeholder groups is balanced and proposals must attain well-defined levels of support across all stakeholders before they are passed. But that idyllic “multistakeholder process”  was blatantly circumvented in this case. The real policy process occurred outside of and after the formal policy development process, in chaotic and politicized interactions among the staff, the US government, the GAC and a trademark lobby that was deliberately targeting ICANN’s supervisors in the U.S. government. And nothing could stop ICANN’s staff from stonewalling any and all challenges to that diversion.

The incoming CEO of ICANN at the time, Fadi Chehade, exacerbated this problem by convening a set of closed, invitation-only meetings that acted as a bootleg substitute for an organized policy making process. His intentions were probably good, in that he wanted to resolve controversies around the new TLD program so that he could get it over and done with. But he did not seem to realize that he was resolving the controversy by completely circumventing ICANN’s policy development process. He gave big brand owners a chance to rewrite policy in ways that favored themselves while imposing costs and harms on other interest groups, without the balanced representation and formal approvals required of the real policy development process.

The Trademark Clearinghouse (TMCH) was at the center of this controversy. The TMCH gives trademark owners pre-emptive rights over domain name registrations that go well beyond what they are provided in normal trademark law. Trademark owners enter their marks into a database and the marks are verified. Registrars connect their domain name registration information systems to this database so that any time an individual attempts to register a domain name similar to the mark, it triggers notifications and warnings. These warnings have important legal consequences, in that they can intimidate registrants and shift the burden of proof away from the trademark holder and onto the registrant.

Originally, these notifications were supposed to take place only when a domain name registration exactly matched a trademark. Most groups in the policy development process agreed to this. Indeed, in mid-2011 it had seemed as if the entire ICANN new gTLD policy was finalized. But from August to December of 2011 a group of American brand owners initiated a major public relations campaign against the whole program. The well-financed trade groups unleashed a flurry of lobbying at the U.S. Congress, the Commerce Department, the Federal Trade Commission and the ICANN board. (Note that all of the institutions they targeted were U.S.-based – another indication of the distorted accountability relationships in ICANN. ICANN’s tether to the USG privileges the American polity over the global polity in countless ways.)

The advertisers’ campaign was not asking for modifications of policy; their real goal was to stop the program altogether. The brand owners acted as if they had just discovered a plan that had been in ongoing development for 5 years. Brand owners were extremely well represented in the earlier policy development process, and had already been given major rights protections. But the onslaught by the ANA and others opened up what were supposed to be finalized issues.

In response to the pressure, ICANN CEO Chehade convened closed meetings in Los Angeles and Brussels in November 2012 to develop a new approach to trademark protection mechanisms. The meetings were invitation-only, so it was ICANN, not the entire community, who controlled who was there and what views were represented. Attendees at the LA meeting were asked by ICANN not to tweet or blog about the talks. Key decisions were made after certain stakeholders had left the meeting.

Predictably, the trademark lobbyists exploited the opportunity created by these closed meetings to rewrite the policy. They pushed through proposals to broaden and strengthen their rights protection mechanisms. A package of policy and implementation changes emerged from the meeting known as the “strawman proposal.” In the strawman proposal, trademark notices would not just protect an exact match, but up to 50 variations on any registered trademark character string provided that the variation had been part of a domain name dispute. As legal expert and NCSG chair Robin Gross wrote,

Apple Inc. has 28 active trademark registrations through the Madrid System for the trademarked term “Apple”. For each of these national registrations Apple will be allowed to place 50 derivations of this mark that encompass 1400 derivations of the single trademark ‘Apple” into the TMCH. In reality, this staff developed policy could be more accurately labeled ‘Trademark + n’ as the road to infinity is tempered only by the number of potential jurisdictions offering applicants registered trademark protection.

Trademark owners were being given notifications and warnings for gigantic swaths of the name space. The notification process was not sensitive to context, geography, parody or fair use. The legal significance of the expanded protections was not lost on free speech advocates. Robin Gross noted that receipt of a claims notice via the TMCH would increase the risk of ordinary domain name registrants:

Prospective registrants will be faced with new legal risks should they dare to attempt to register a domain name that may trigger a TMCH claims notice, despite their intended use of the domain being perfectly legal and non-infringing. Noncommercial users are often … without the financial resources to retain legal counsel or, in many cases, to even engage specialist counsel to determine whether their proposed name is infringing or lawful fair use. Many noncommercial users will simply abandon their registration upon receipt of a TMCH [notice].

But debating the merits of these policy changes is not entirely the point. The key failing here was one of process. Why was policy being reopened and rewritten? Why was ICANN’s balanced system of representation, deliberation and approval, which had already settled on protection only for exact matches, suddenly being bypassed? Registries, registrars, new gTLD applicants and end users complained that the proposals for stronger rights protection mechanisms had already been considered multiple times and rejected. Yet here they were again in the “strawman” proposal. In one of many expressions of concern about this, a complaint about the strawman process was filed with ICANN’s Ombudsman. The first of many subsequent appeals, it had no effect.

Usually when ICANN circumvents its own process it claims that it is engaged in ‘implementation’ and not ‘policy making.’ But in this case, ICANN itself admitted that it had altered policy. In a blog post on November 26, 2012, ICANN’s CEO recognized that expanding the scope of the trademark claims service was a policy matter. ICANN staff issued a document on 29 November 2012 (updated on 3 December 2012) entitled ‘Trademark Clearinghouse: Strawman Solution’ stating “The inclusion of strings previously found to have been abusively registered in the Clearinghouse for purpose of Trademark Claims can be considered a policy matter…”

Thus, in a sop to appropriate process, Chehade wrote to the GNSO Council to request guidance on the strawman proposal. In its February 28, 2013 response the GNSO Council gave the Chehade an unambiguous answer: don’t adopt the strawman proposal; it alters policy.

The majority view of the Council is that the proposals on changes to the TMCH implementation amount to an expansion of trademark scope. We believe that this, together with the potential impact of such proposals on the full community, make them a matter of policy, not implementation. The majority of the Council believes – consistent with what the Council unanimously agreed previously – that protection policies for new gTLDs are sufficient and need not be revisited now. If the community seeks to augment existing RPMs [rights protection mechanisms], they are appropriately the subjects of future Council managed GNSO policy activity.

ICANN’s bottom up process not only did not approve of the changes, it noted that the strawman proposal was overriding what had been unanimous agreement before.

Yet ICANN’s staff ignored the GNSO. Its request for ‘guidance’ must not have gotten the answer it wanted. A 20 March 2013 Memorandum accepted all disputed portions of the Strawman proposal. A disturbing aspect of this Memorandum is that it was written entirely by ICANN’s legal staff, and then put before a completely passive board for a rubber stamp.

To understand the significance of this, suppose that the U.S. Congress or British Parliament had just passed a law, but one lobbying group didn’t like it. Suppose that the President or the British Prime Minister convened a closed meeting with a small group of invited “stakeholders” and agreed on a “strawman proposal” to amend the legislation. The new legislation makes the first group happy but most other stakeholders unhappy. But nevertheless, the chief executives went on to order its executive branch to implement the revised legislation without any review and approval by the Congress/Parliament.

That is exactly what ICANN did.

In a last-ditch attempt to put the runaway train back on the track, the Noncommercial Stakeholders Group (NCSG) filed a reconsideration request in April 2013. The NCSG carefully documented the process violations and the reasons why the TM+50 was a policy change. Neither the staff nor the board took this request into serious consideration. ICANN’s legal staff was ordered to write up a rationalization of what had already been determined to be the desired outcome, namely going ahead with the strawman proposal. The staff response parroted the discredited line that the change was “implementation” and not “policy,” using pathetically legalistic statements – such as that admitting that something “could be” policy did not necessarily mean that it was policy. It tried to dismiss the GNSO Council’s determination that the change was a policy change by noting that one constituency group (the trademark constituency) supported the change (even though none of the others did, and the constituency group they cited benefited from the change).

The NCSG then used the only other accountability mechanism remaining: the Documentary Information Disclosure Program (DIDP), ICANN’s version of the freedom of information act. If it could not stop the process from going off the tracks, at least it would perhaps improve our knowledge of what went wrong and how. Who was the staff talking to when they made this decision? What opinions and positions were they debating? What was their true rationale? On July 24, 2013, NCSG requested “All documentation, memos, reports, analysis, correspondence, preparatory documents or any other information … concerning and/or leading to the staff action of the imposition of the policy announced in the 20 March 2013 staff memo titled “Trademark Claims Protection for Previously Abused Names.”

In August, the NCSG received the staff response: no information was provided. Edward Morris, an NCSG member who handled the DIDP request, noted that:

We should have expected the type of response we received from ICANN. It is what the organization does and what it has become. Many of us have dreams of an international multi-stakeholder non-bureaucratic organ that serves as a new form of global governance that not only could manage domain names, but also could someday be used as a governance prototype in other fields. Instead what we actually have is a private California corporation which, like most corporations, views stakeholders as groups to be managed rather than ones to be listened to. ICANN’s management techniques reflect the components and perceived relative power of the specific stakeholder group it is managing. That is our current situation and our response should be tailored to it.

Morris went on to note:

In recent year…the DIDP has served more as window dressing than as an actual tool to be used by interested parties to help ICANN become a truly open and transparent organization. Since Fadi Chehade assumed his position of ICANN CEO there have been twelve DIPD requests. In responding to these requests, ICANN has not provided ANY document to the requestor that was not 1) already posted online or 2) already scheduled to be posted online. This reticence to release information pre-dates Mr. Chehade. Of the last twenty DIDP requests…only one request produced any release of new information. In recent years ICANN has resorted to responding to DIDP requests using boilerplate denial language.

ICANN usually cites its ‘Defined Conditions of Nondisclosure’ (DCND) in refusing to release any additional information than that it has already released. They did so multiple times in our Request. Yet absent a review of staff action, how does one know if the staff is correctly applying the DCND properly or instead is merely protecting its own interests through nondisclosure? …

ICANN’s basic response to our DIDP request was to provide links to information already posted on its website and deny us access to any further information by citing the Defined Conditions of Nondisclosure (DCND). Not only did they cite the DCND a record breaking twenty-three times, but we are also authors of the only DIDP request to have caused ICANN to cite each and every provision of the DCND while denying our requests.

These are damning words, but they are justified. As the TMCH controversy unfolded Fadi Chehade was quoted in the press as saying:

I made one big mistake in the last few months; I didn’t quite fully understand… this concept of ‘trying to take a second bite at the apple’ when I engaged with the Trademark Clearinghouse discussions.

At that moment, Chehade seems to have achieved a rare level of insight into ICANN. But that insight had no effect whatsoever on his subsequent actions. In the end, he not only gave the TM hardliners their ‘second’ (actually, their third) bite at the apple; he and his staff ignored appeals from the GNSO to follow the proper process and got the board to dismiss reconsideration attempts. His staff even refused to respond appropriately to a request for internal information about how this had happened. This kind of cynical deviation from proper process has become so routine in ICANN that no one inside of it is surprised by it any more.

The basic pattern is clear: abandon fair process in response to political pressure; substitute staff-made policies for bottom-up policies; feed ignorant and overwhelmed board members only the information they need to ratify the staff decisions; pre-emptively dismiss any reconsideration or information requests with boilerplate language and bogus rationalizations.  All this is possible because, after all, there is no real accountability, no standards to adhere to, no effective appeals mechanisms or oversight.

Archive of relevant documents on the TMCH case


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