Stuart Lawley Counter Sues Manwin & Digital Playground For $120 Million

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from – ICM the operator of the .XXX Top Level Domain (TLD) just filed a counterclaim again Manwin Licensing International, the company that owns and Digital Playground, Inc, both of which filed suit against ICM and ICANN over the .XXX extension.

ICM is asking the court to award it $120 Million dollars (treble damages), punitive damages, attorney fees and for injunctive relief.

The counter claim is under several counts including “Combination or Conspiracy in Restraint of Trade” , violation of the Sherman Act and Violation of the Cartwright Act; Unfair Competition Under the Lanham Act and Tortious Interference With Prospective Clients.

We did cover back in December 2011, what ICM has centered in its counter claim, which was a ban by Manwin against “all activity between its brands and Internet sites registered with a .XXX TLD, including advertising for .XXX websites on its tube sites.” That December story which was oringinally published in, went on to say: “In addition, Manwin said it won’t permit its content to be used or advertised on .XXX websites.”

Here are some of the more interesting allegations in the counter claim:

Manwin has colluded with at least, Digital Playground, and their related companies, affiliates, brands and certain third party affiliates to prevent the emergence of other tube sites through improper means in order to protect its dominance in the relevant market or markets as alleged herein.

Manwin, Digital Playground, and their related companies, affiliates, brands, and certain third party affiliates have conspired to boycott the .XXX TLD and have coerced and/or encouraged the boycott of .XXX websites by third parties.

In order to maintain a monopoly over the relevant market or markets as alleged herein, Manwin, Digital Playground, and their related companies, affiliates, brands, and certain third party affiliates have intended to restrain trade in the product market mentioned above through inhibiting commercialization and utilization of the .XXX TLD.

Plaintiffs are informed and believe that Manwin and Digital Play- ground have combined and conspired to undertake at least the following anti- competitive practices intended to restrain trade in the relevant market or markets

(a) Engaging in improper “tying” arrangements with webmasters in which said Counterdefendants condition the promotion of the webmasters websites on Manwin’s tube sites on a boycott of the .XXX TLD;

(b) Instigating a boycott of .XXX and refusing to advertise, promote or host content for companies, individuals or groups that use .XXX;

(c) Engaging in harassment and coercion to extort high value tube site names such as “” for below market prices;

(d) Demanding that ICM allocate it several thousand domain names at below market prices and requiring assurances that neither ICM’s nor IFFOR’s registry policies would introduce any policies that limited or prevented tube sites from existing in .XXX;

(e) Improperly coercing industry groups into blocking the promotion of .XXX at adult entertainment events and gatherings in an attempt to improperly restrain the trade of ICM;

(f) Conditioning contracts with third parties on non-involvement with the .XXX TLD; and

(g) Engaging in an unfair anticompetitive campaign against .XXX in order to prevent ICM from bringing .XXX to market.

Manwin has conspired and combined with Digital Playground, a leading content provider, to maintain Manwin’s monopoly or market power (and Digital Playground’s visibility) by harassing, oppressing, boycotting and interfering with ICM Registry’s commercialization of .XXX.

If not enjoined, there is a high likelihood that Manwin’s monopolization over the relevant markets will continue to the exclusion of existing and potential competitors giving Manwin unfettered discretion to fix prices, refuse to deal and restrain trade.

Manwin has acted in concert with at least Digital Playground, and their related companies, affiliates, brands, and network of webmasters to boycott the .XXX TLD, and have engaged in predatory anti-competitive acts as discussed above in violation of the Cartwright Act.

Manwin has engaged in libel and trade defamation, including without limitation a libelous press release about this very lawsuit in which Manwin’s (false) allegations were reported as facts, intended to interfere with ICM’s existing and prospective business relationships.

Such actions constitute unfair competition in violation of Section 43(a) of the Lanham Act because they are designed to drive a legitimate market participant out of the market by improper means.

Counterdefendants’ acts complained of herein have damaged and will continue to damage Counterclaimant irreparably.

Counterclaimant is therefore entitled to an injunction restraining and order

As part of its .XXX Founders Program and Sunrise A reservation period, ICM offered members of the adult entertainment industry the ability to secure and develop .XXX domain names and apply for advanced registration of .XXX domains in exchange for a registration fee.

In response to these offerings, members of the adult entertainment industry expressed their intention to enter agreements and/or did enter into agreements with ICM, including .XXX Founder Premium Domain Name Licensing Fees Contracts and .XXX Premium Generic Names Contracts, for registration of .XXX domains.

For example, ICM entered into registration agreements with Really Useful, Ltd., the registrant for the domain names and
Under its contracts with this registrant, ICM was to receive a series of payments in exchange for reservation of those domains.

In addition to the contracts for the and domains, Really Useful, Ltd. intended to enter into additional premium name contracts with ICM for other .XXX domains.

Manwin had knowledge of ICM’s offering of domain name registration to the members of the adult entertainment industry and ICM’s agreements obtained from this offering based on various public announcements, including ICM’s announcement on the successful conclusion of its .XXX Founder Program, which included the and domains.

On information and belief, Manwin had knowledge of adult entertainment industry members’ intention to apply for registration of .XXX domains based on communications with those members and/or Internet publications expressing these members’ intention to apply for registration.

On information and belief, Manwin intended to disrupt the economic relationship between ICM and these industry members who intended to apply for .XXX registrations by indicating that Manwin would not take video uploads, links, sites or ads from .XXX sites.

The actions of Manwin disrupted the relationship ICM had with these industry members who intended to apply for .XXX registrations. Manwin’s actions deterred these parties from purchasing .XXX domain names because their ability to monetize such domain names would be greatly inhibited by Manwin’s boycott.

These parties decided to forego their applications to register .XXX domain names with ICM as a result of Manwin’s actions.

Certain of these parties also lost revenue as a direct result of Manwin’s boycott of their content and advertising and consequently were forced to seek deferral of payment to ICM for the generic .XXX domain names they had acquired.

The counter claim is 24 pages long as was filed in the UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA on Friday September 28th, 2012.

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