As reported in our earlier post, the Internet Corporation for Assigned Names and Numbers (ICANN) has been sued by the disgruntled new generic Top Level Domain (gTLD) applicant, DotConnectAfrica, in order to prevent the delegation of the new gTLD .AFRICA. DotConnectAfrica alleged that a rival application for .AFRICA which was filed by ZA Central Registry (ZACR) was fraudulent and sought monetary damages from ICANN. ZACR filed a motion to dismiss the claims against it and the court has granted ZACR’s request. The judge also indicated that there may be the possibility that DotConnectAfrica’s application could proceed to delegation. DotConnectAfrica’s decision to bring court action against ICANN in relation to the new gTLD program was surprising given that all gTLD applicants have effectively signed away their rights to take court action against a decision of ICANN with regard to their applications as set out in clause 6 of the “Top-Level Domain Application – Terms and Conditions” for the New gTLD Program., which states the following:
“Applicant agrees not to challenge, in court or in any other judicial fora, any final decision made by ICANN with respect to the application, and irrevocably waives any right to sue or proceed in court or any other judicial fora on the basis of any other legal claim against ICANN and ICANN affiliated parties with respect to the application. Applicant acknowledges and accepts that Applicant’s non-entitlement to pursue any rights, remedies, or legal claims against ICANN or the ICANN affiliated parties in court or any other judicial fora with respect to the application shall mean that applicant will forego any recovery of any application fees, monies invested in business infrastructure or other startup costs and any and all profits that applicant may expect to realize from the operation of a registry for the TLD.”
However, this did not prevent DotConnectAfrica from filing their lawsuit in California and the judge ruled that Clause 6 was likely not enforceable under Californian law which states that “[a]ll contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property or another, or violation of law, whether willful or negligent, are against the policy of the law.” As such, it appears that in the courts of California, new gTLD applicants do have the right to sue ICANN if their claims are based on fraudulent actions on the part of ICANN.
In response to this court action, ZACR filed a motion to dismiss the claims filed against it by DotConnectAfrica. The judge ruled that DotConnectAfrica had failed to make a case that ZACR had committed fraud and conspiracy to commit fraud, intentional interference with contract, and that ZACR’s conduct gave rise to unfair competition.
As such, DotConnectAfrica’s case against ZACR will go no further.
However, DotConnectAfrica’s claims against ICANN will continue to be considered by the judge. In connection with these claims the judge has issued a ruling concerning the Independent Review Process (IRP) Panel declaration that DotConnectAfrica’s application for .AFRICA should be allowed to continue through the “remainder of the new gTLD application process”.
As a result of this order from the IRP Panel, ICANN allowed the application to continue with the Initial Evaluation process and to be examined by the Geographic Names Panel.
This course of action has now been questioned by the judge who has ruled that “A key issue in the parties’ dispute is whether ICANN violated the IRP Declaration by not allowing the application to resume at a point after the geographic names evaluation phase.”
This ruling appears to be based on the interpretation that DotConnectAfrica’s application for .AFRICA had already been reviewed once by the Geographic Names Panel and that the next stage in the new gTLD application process would be delegation.
This was not the case though. Prior to the IRP Panel declaration, DotConnectAfrica’s application was not assessed by the Geographic Names Panel. This was because the Government Advisory Committee (GAC) issued an advisory notice in the April 2013 Beijing Communique saying that the GAC had reached a consensus position to object to DotConnectAfrica’s application for .AFRICA and that it should not proceed any further.
Following the IRP Panel declaration, ICANN duly put DotConnectAfrica’s application for .AFRICA back into the new gTLD application process at the point of the review by the Geographic Names Panel as this had not yet taken place.
However, the interpretation of the judge is that “At this stage of litigation, it is reasonable to infer that the IRP Panel found that ICANN’s rejection of Plaintiff’s application at the geographic names evaluation phase was improper, and that the application should proceed to the delegation phase.”
Whether this will be the judge’s final interpretation of the fact pattern remains to be seen. In any event, DotConnectAfrica seem to be scoring a number of small victories so far in the litigation. The case continues and we will continue to monitor the situation as it develops.
First published on Anchovy News.