Judge Tosses ICM Registry's Counterclaims Against Manwin

Feb 28, 2013 2:15 PM PST

LOS ANGELES — A federal judge this week tossed all of ICM Registry's counterclaims against Manwin, ruling that the .XXX operator failed to state antitrust charges against the adult entertainment conglomerate.

U.S. District Judge Philip Gutierrez also granted Manwin’s motion to strike over claims under California's Strategic Lawsuits Against Public Participation statute, also known as SLAPP, over a call for a .XXX boycott.

The legal battle between the two entities began after ICM Registry won approval from ICANN, also a party to the original antitrust suit, to provide .XXX registry services for the Internet.

Manwin and Digital Playground filed their original suit in November 2011, alleging that ICM Registry received the original and renewal registry contracts without competition, charges above-market .XXX prices, imposed other anticompetitive .XXX sales restrictions and has, because of its ICANN contract, precluded other adult-oriented top-level domains from operating. 

In October, ICM Registry filed a $40 million countersuit against Manwin, alleging 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.

ICM Registry later alleged that Manwin colluded with third parties to boycott content from Shemale.xxx and Ladyboy.xxx, both owned by Grooby Productions, on Manwin's tube sites based upon on their .XXX affiliation.

But this week,  Gutierrez, in a ruling over the countersuit, said that porn entrepreneurs likely aren't harmed by Manwin's dominance.

"Websites seeking to compete with Manwin’s sites could  easily form a new website, regardless of whether that site bears the .XXX TLD or an alternate TLD," Gutierrez said. "Thus, ICM has failed to make an argument that failure to commercialize the .XXX TLD will reduce the number of competitors in the market for online search and access to adult  entertainment via websites.

"The only potential harm is to ICM itself. Harm to ICM only is not sufficient to constitute antitrust injury. It must allege harm to the competitive process."

Manwin, as well as its Digital Playground division, also were alleged by ICM Registry to have engaged in predatory acts to prevent and coerce others in the adult entertainment industry from utilizing the .XXX TLD platform.

Manwin had argued that a Dec. 2 Manwin press release advocating a boycott of .XXX was protected speech.

Gutierrez, in his decision, agreed with Manwin.

"Because ICM’s state law counterclaims arise from Manwin’s protected activities and ICM has failed to demonstrate through affidavits that it is likely to prevail on either claim, Manwin’s motion to strike ICM’s counterclaims under California’s anti-SLAPP statute is granted," Gutierrez said.

Gutierrez, however, granted ICM Registry 30 days to amend its suit with a second amended counterclaim. The federal judge noted that ICM Registry would be on the hook for Manwin's attorney fees over the anti-SLAPP portion of the suit.

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