YNOT – In an amended complaint filed Friday, Manwin Licensing International dropped two of four allegations against ICM Registry and the Internet Corporation for Assigned Names and Numbers, but upped the tenor of its arguments for the two causes remaining in the antitrust lawsuit pending at federal court in Los Angeles.

Filed Nov. 16, the original Manwin v ICM Registry action sought redress for antitrust violations under federal and California law allegedly committed by ICM and ICANN in approving the dot-xxx adult-specific sponsored Top Level Domain. The two state claims were dropped in Friday’s filing.

“While Manwin believes it would have prevailed on the two state law claims, those claims involved procedural peculiarities of California law that posed risks of potential trial delay,” a prepared statement distributed by the company noted. “Manwin is anxious to have its day in court and did not want any such delay.”

At the same time, the new court documents reveal additional arguments Manwin intends to put forth relative to its federal claims under Sections 1 and 2 of the Sherman Antitrust Act.

“ICANN and ICM both knew and intended, at the time they entered the contract, that the contract would permit and be used by ICM to charge supra-competitive prices, prevent future entrants into the market for adult-oriented TLDs, and lead to poorer quality services and less innovation than would result if ICM had to compete for the dot-xxx registry or with other adult-oriented TLDs,” the amended complaint states. “In fact, during contract negotiations, ICM informed ICANN of the above-market prices ICM intended to charge and from which ICANN would profit.”

Consequently, in awarding the dot-xxx registry contract to ICM, ICANN delivered “perpetual monopolistic control of the relevant markets” that “will preclude the entry of new competitors who would offer better quality and/or lower-priced registration services for .XXX or other adult-oriented TLDs.”

In order to secure ICANN’s complicity in what Manwin calls “an illegal scheme,” ICM employed “coercive acts intended to secure ICANN’s agreement to the scheme.”

But ICANN also saw dollar signs in the arrangement, according to the amended complaint.

The internet’s governing body approved ICM’s application “not only in response to those improper and coercive tactics but also because ICM promised to pay ICANN what is expected to be millions of dollars in annual fees derived from ICM’s sales of .XXX registrations, and in particular defensive registrations,” the complaint states.

Court documents indicate Manwin takes egregious exception to the entire notion of so-called defensive registrations within dot-xxx, because such registrations violate the spirit and intent of the domain space. Defensive registrations also violate the registry contract between ICM and ICANN, Manwin’s amended complaint states.

“ICM agreed in its registry contract with ICANN that .XXX would be an industry-limited and sponsored TLD,” the amended complaint notes. “Under the contract, only those providing adult entertainment services are supposed to operate .XXX websites. But ICM has not enforced this restriction. Instead, ICM has allowed .XXX registrations by those having nothing to do with adult entertainment.”

According to the complaint, “scores” of dot-xxx domains having nothing to do with adult entertainment have been registered and are in use in the space. The complaint lists DiscoverMe.xxx, EFlowers.xxx, InsuranceRates.xxx, MusicVideos.xxx, OnlineClasses.xxx and RentACar.xxx as examples of sites that have no connection to adult entertainment.

“Permitting broad, unregulated access to .XXX enhances the likelihood that others will register .XXX sites infringing rights of [adult entertainment] name holders,” the amended complaint states. “ICM’s breach of its contractual obligations thus makes defensive .XXX registrations more necessary.”

The new filing occurred three days after Manwin, ICM and ICANN filed a joint stipulation in the case, indicating the adversaries might be attempting to settle their differences out of court.

“…[I]n recent days, Plaintiffs and ICM have engaged in discussions aimed at resolving the disputes that are the subject of this litigation,” that document stated. “The parties believe that additional time would potentially allow the parties to resolve all or some portion of their disputes.”

A lawyer for Manwin indicated filing an amended complaint protects Manwin’s interests but does preclude an out-of-court settlement.

“The filing of an amended complaint in our antitrust case was required to avoid unnecessary procedural delays by ICM and ICANN,” Kevin E. Gaut, counsel for Manwin and partner with Mitchell Silberberg & Knupp LLP, noted in a prepared statement. “It also reinforces the fact that both ICANN and ICM both knew that the terms of the .XXX registry contract would permit ICM to charge supra-competitive prices and prevent competitors from entering the market. We are still pursuing all of the remedies filed in the original complaint.”

ICM and ICANN have until April 17 to respond.