ICM Registry Makes Counterclaims Against Manwin

Oct 1, 2012 4:30 PM PST

LOS ANGELES — ICM Registry has filed a $40 million countersuit against Manwin, alleging the adult entertainment conglomerate filed its antitrust lawsuit against the .XXX operator in order to maintain its "current monopoly" over search and access to online adult entertainment.

The countersuit, filed at U.S. District Court in Los Angeles, said that Manwin's current dominance in the adult industry is so strong that many porn entrepreneurs are forced to advertise and release content on Manwin-owned network platforms.

The suit went on to say that Manwin, as well as its Digital Playground division and co-plaintiff, engaged in predatory acts to prevent and coerce others in the adult entertainment industry from utilizing the .XXX TLD platform.

"At its core, this case does not involve a monopoly over defensive or affirmative .XXX domain name registrations, but instead involves control over the platforms on and through which the online adult entertainment industry advertises and disseminates its content," said the countersuit, which also names 10 John Does.

Specifically, ICM Registry said that Manwin had been using that alleged monopoly power, as well as market strength, to attempt to "improperly extort concessions" from ICM by demanding $10 per .XXX domain name pricing and free registration of exact matches and typos of Manwin's existing trademarks and domain names.

ICM Registry said that Manwin also demanded assurances that neither ICM Registry nor the International Foundation for Online Responsibility (IFFOR) would introduce registry policies that would limit or prevent tube sites from existing in .XXX and a commitment from Stuart Lawley, ICM Registry's CEO, that he would step down as chair of IFFOR.

In addition, ICM Registry alleges, Manwin sought to establish a revenue split approximately between 80/20 and 70/30 of profits acquired from running certain premium .XXX domains from ICM by leveraging Manwin's market power.

ICM Registry also leveled charges that Manwin engaged in an unfair and anticompetitive campaign by interfering with the .XXX operator's existing and prospective contractual relationships

"On information and belief, Manwin has and continues to engage in 'tying' arrangements with webmasters, conditioning promotion of the webmasters websites on Manwin's tube sites on the webmasters' boycotting use of .XXX and has secured agreement, either express or implied, that the webmasters not do business with .XXX," the countersuit said.

The suit also charges that Manwin was involved with wrongful restraint of trade after it improperly interfered with potential sponsorships at XBIZ and AVN adult industry events, as well as advertising opportunities with the trade publishers, by securing either express or implied agreements that they will not do business with .XXX.

ICM Registry said that even .XXX spokesmodels have been coerced to end relationships, that Manwin has engaged in libel and trade defamation and that the company has conditioned contracts to third parties on their non-involvement with the .XXX top-level domain.

"Manwin has conspired and combined with Digital Playground ... to maintain Manwin's monopoly or market power by harassing, oppressing, boycotting and interfering with ICM Registry's commercialization of .XXX," the suit said.

ICM Registry said that the beginnings of discord between the companies began in July 2010 as "Manwin saw the launch of .XXX as a serious threat to Manwin's tube site empire."

"For this reason, Manwin's managing partner, in July 2010, attempted  to buy into lCM," the suit said. "Moreover, Manwin sought ro woo ICM by stating that if Manwin  joined .XXX it would make .XXX a success because everything Manwin does becomes the industry leading activity."

When the attempt by Manwin's managing partner, Fabian Thylmann, to buy into ICM was rebuffed, the suit said, he resorted to instigating legal action by and through Manwin in order to prevent ICM from commercializing the .XXX TLD.

"The timing of Manwin's and Digital Playground's lawsuit is indicative of the true intent of Manwin and Digital Playground to interfere with ICM's prospective business since it occurred just a few weeks before the launch of .XXX," the suit said. "Manwin's and Digital  Playground's suit was making good on Manwin's threat ... to  ICM executives that Manwin would sue ICM to 'mess them up.'"

The filing of counterclaims on Friday came the same day that ICM Registry and ICANN delivered answers to Manwin's first-amended complaint.

Luxembourg-based Manwin filed its original suit last November, alleging that ICM Registry received the original and renewal registry contracts without competition, is charging above-market .XXX prices, imposes other anticompetitive .XXX sales restrictions and has, because of its ICANN contract, precluded other adult-oriented top-level domains from operating. 

ICM Registry's counterclaims include four counts under the Sherman Antitrust Act, one count under California's restraint of trade law, one count of the Lanham Act, one count under California's unfair competition law and one count for tortious interference with prospective economic advantage.

ICM Registry is asking for a restraining order enjoining Manwin from maintaining or renewing anticompetitive contracts or any actions at boycotting .XXX for an array of purposes.

The .XXX operator also asked the court to award damages at no less than $40 million, as well as punitive and treble damages.

Manwin officials did not respond to XBIZ queries by post time.

Lawley, ICM Registry's CEO told XBIZ, "We have maintained all along that the legal actions taken by Manwin against ICM Registry and ICANN are without merit."

"Our counterclaims address the nuisance and damages caused by these misguided actions," he said.

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