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For those of you who like to plan ahead, recent events in the dot-com world could leave you frustrated, especially if you filed multiple applications to get a popular name like show.biz or travel.biz on the new dot-biz registry that opened last week. The problem: Performances at show.biz won’t be opening any time soon. About a year ago, I noted with some skepticism the simultaneous addition of seven top-level domain names by ICANN, the Internet Corporation for Assigned Names and Numbers. The major question raised back then was whether rolling out seven new registries, each to be operated by different private contractors, was too much too soon for the domain name registration process. A recent Los Angeles court decision that put over 53,000 of the most popular dot-biz names on hold may provide an answer. If you were thinking of going into dot-biz-ness or adding dot-biz to your current online sales strategy, you may want to reconsider. The court’s action was just what ICANN wanted to avoid. When ICANN awarded its contracts to applicants such as Neulevel, the Virginia-based company that operates the dot-biz registry, one criterion was a solution to the land rush for Web names and the ensuing trademark slugfest suffered by the overcrowded dot-com suffix. But perhaps Neulevel was too creative. Or greedy. At least that appears to be Los Angeles Superior Court Judge Anthony Mohr’s view as he granted class action plaintiffs a preliminary injunction against Neulevel and up to 500 other defendant registrars (read resellers of dot-biz names) to halt registration of domain names in “Class 2B” (as in “to be” determined). Success by plaintiffs at the injunction stage means that Judge Mohr believes that civil suits against Neulevel may succeed in full trial. In that event Neulevel could be forced to refund all application fees, pay damages, or possibly begin the application all over for these 53,000 names. Class action attorneys sued in early August on behalf of potential dot-biz registrants, claiming that Neulevel’s complex name registration process was an illegal lottery under California law. The two largest plaintiffs, which had made the vast majority of dot-biz name requests, were required to post $800,000 bond each. At this time, it appears only the primary plaintiff has posted the bond. Neulevel’s registration process is more complex than those of two other ICANN approved registries, dot-name and dot-info. Ostensibly the Neulevel process has a valid goal: to give priority to trademark owners and to efficiently resolve name claim disputes at the outset — before a cybersquatter takes the name. To do this, Neulevel provided a three-step process. First, during a so-called claims phase, trademark owners were given the opportunity to pay $90 for a claim to a domain name using their trademark without registering the domain name. After the claims period, anyone could apply for any domain name for $2 each, but with an unusual — and lotterylike — twist: All applications would be pooled and a “winning” applicant selected at random would be permitted to register a name — even a disputed name. The winner’s registration would not be activated for 30 days, however, so that disputes could be resolved. In that third step, a trademark claim holder to the domain name could challenge the winner. After 30 days, the disputed domain name would become active, but “locked,” meaning that the winner could not sell or otherwise change its identity until the dispute with the trademark holder was resolved. In the end, either the winner’s registration would be unlocked or the trademark owner would register the domain name. But the random selection process had a lottery quality. Applicants could vote early and often; the same applicant could submit multiple applications for the same domain name to improve its chances of winning. Some dot-biz resellers even referred to the process as a lottery and the applications as tickets. That’s where Class 2B came in. Judge Mohr allowed companies that filed one application for one name and those where one applicant filed multiple applications for one name to go forward with registration as it started Tuesday. That took care of 229,000 of the 282,000 names sought for dot-biz registration. The remaining 53,000 names where multiple companies filed multiple applications for the same name are on hold by the judge’s order. With 1.5 million applications for those 53,000 names, the plaintiffs claim that Neulevel is operating an illegal lottery with the classic elements of prize, chance and consideration. The plaintiffs say that the prize is the right to register the domain name for an exclusive Internet address. The chance is the random selection process from the pool of applications. The consideration is the $2 entry, uh, application fee — which is not refunded. Neulevel justifies the fee as necessary to defray costs for its notification and trademark dispute resolution. Let’s hope the dot-info and dot-name registries, which have a sunrise period allowing trademark owners to register prior to other applicants, but without a random drawing, don’t have similar problems. Dot-pro (for professionals) also intends to use a sunrise period to address intellectual property concerns but its registry agreement with ICANN is yet to be completed. Hopefully, it will learn from the mistakes of dot-biz. In case you are wondering, the 1.5 million requests for 53,000 names averages out to about 28 applications per name. So for those of you who were looking to get into show.biz, it looks like the odds are still as challenging as ever — especially if you want to get into the act online.

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