YNOT – A federal judge in Los Angeles has tossed the entirety of ICM Registry’s $120-million countersuit in the 15-month-old courtroom battle between the .xxx registry and global adult entertainment behemoth Manwin Licensing International.
In an in-chambers order issued Feb. 26, U.S. District Judge Philip S. Gutierrez not only axed ICM’s bid to pursue financial damages for Manwin’s alleged unfair competition and tortious interference with potential business relationships, but also granted Manwin’s motion to dismiss the countersuit under California’s Strategic Lawsuits Against Public Participation, or SLAPP, statute. In all cases, Gutierrez indicated ICM had failed to support its arguments.
The Manwin-ICM fight worked its way into the courts in November 2011, when Manwin and its subsidiary Digital Playground sued ICM and the Internet Corporation for Assigned Names and Numbers over a variety of antitrust allegations including conspiracy and collusion. In August 2012, Gutierrez struck two of the original five causes of action from the lawsuit but allowed three others to stand. In addition, Gutierrez declined to dismiss ICANN as a respondent.
In October 2012, ICM returned fire with a counterclaim seeking triple the $40 million in damages the registry claims to have suffered as a direct result of Manwin’s meddling and rabble-rousing. ICM characterized Manwin’s boycotting of .xxx domains and outspoken criticism of the process by which .xxx received ICANN’s approval as malicious attempts to restrain trade. Because of Manwin’s size, the company is able to exert an extreme amount of influence on the rest of the industry through intimidation, ICM argued, thereby harming not only ICM, but also the adult industry as a whole.
Gutierrez disagreed, saying Manwin’s dominance has not prevented and will not prevent other companies from conducting business with ICM or any other domain registry. Furthermore, Manwin’s actions have harmed none of Manwin’s or ICM’s competitors, the judge noted.
“The only potential harm is to ICM itself,” Gutierrez wrote. “Harm to ICM only is not sufficient to constitute antitrust injury. It must allege harm to the competitive process.”
In the SLAPP portion of ICM’s countersuit, Gutierrez similarly found no support for ICM’s contention that Manwin’s aggressive anti-.xxx action amounted to predation under California law. The judge ordered ICM to pay legal fees Manwin incurred in its anti-SLAPP defense.
ICM has 30 days to file an amended counterclaim.
