thank you judge may please the court michael miller for appellant and plaintiff below namespace incorporated and i'm going to do my best to save three minutes for rebuttal your honour's this is an appeal from a motion to dismiss prejudice that one exception would be the section two claims which were different dismissed with prejudice on stated ground that no amendment could correct the fact that the defendants market power was thrust upon it by a grant from the department of commerce and the plaintiff in this case as an entity that was foreclosed from competing in the relevant markets well let me ask the question what what market is the defendant in that your client is in your words it seems to me they're in different markets your client is in the business of selling dot somethings to ultimate users or at monopolizing the market that you're and they don't seem to be in that market at all your honor this is a case based on an unusual set of facts and i think it drives the analysis here the facts do so i think we agree with  market that you're not in the right so if i can back up for a second so we recognise that and it's the unusual the unique set of circumstances that the drive for someone let me start with what i think is common ground or i guess my worry about that is why didn't your purpose pleaded conspiracy to monopolize your honor we the the allegations necessary because it seems to me that you can't get in on the other one so we brought a section to claim broadly it made lee in the claims the phrase conspiracy to monopolize does not exist even if you had brought a conspiracy to monopolize claim and i'm not clear what its parameters would be because i'm not sure you who you'd be kucing a monopolizing doesn't you have don't you have the same twamley problems that you would have here you have with your section one claim the district court said you really haven't and twamley was in a trust case you really haven't alleged enough for me to find that it's plausible that people conspired together there's a motive perhaps they met together but where is your evidence of conspiracy i'm glad the question because it was my next exact there seems to me on believe your problem will let me deal with that issue and then i'll go back to the sure competitor issue so this court in kendall stated that the plaintiff obligation is to plead facts quote to give a defendant seeking to respond to allegations of a conspiracy and idea of where to begin sure and and i don't like tomblin and i don't like it paul so we put that on the record but there and i trust cases where the allegations seem to be very close to the kinds of allegations we have here how how did you get past that line in this case when what is it that you what alec we know the principal of what allegations did you make that that nudge did as justice  the possible to plausible so let me let me state first what is a distinction between the twamley case in this case and the second is what we what we pleaded that we think would have satisfied even formally now quandary was a case in which there was a unilateral conduct i'm sorry i should say unilaterally or there was conduct in the marketplace by different actors and the question was what explained that conduct and what what was required twamley were allegations that made a conspiracy that is what drove the separate conduct to possible to be sure in this case we have an allegation that a single entity if you will is as has conspired that it done were stating the fact that it appears to be a single entity it's a conspiracy and so my question is what if you allege what facts if you image to to make it plausible that this isn't a single entity but rather a conspiracy and i don't need you and if you will just add to what he said because it seems to me you've alleged that there are potential conspirators namely the director there are times and locations a board meeting and there's a two thousand and twelve output cation process that made your business model difficult that's the only thing i can find in there you really allege well let me talk about what was alleged as to the conspiracy what  and adopted the two thousand and twelve application round and i'm no doubt about to read the allegation but why that's a that's a naked allegation that there was that one occurred in this process was a conspiracy as opposed to the normal action of the board what facts have you managed and led me to lead me to think that it was a conspiracy rather than merely a normal action of the board ok but but if i could just pause for a second on that distinction what we've alleged are individuals both inside and outside of ican made a decision together let's not talk about the motive or the conspiracy for that is the agreement that is the conspiracy part of this that has been alleged and i think your honor question your honour's question is well ok but gee they're just making a of if which is not enough standing on alone but it is a factor that needs to be considered i know factors enough standing on a cloud so you have this motive what you see is a process that benefited particular entities that were represented on the board and that we have alleged in the complaint we're part of the conspiracy so it's a little bit more than the usual motive of gee it's a conspiracy to raise prices because everybody likes higher prices if you're a seller this is a little bit different it's a little more specific and i would refer respectfully suggest a little more plausible that these individuals as they move in in and out of the i can board are benefiting their own financial interests now what we also have is the proof is in the putting what we see and what we have alleged is that only a few entities were able to participate in the process what we allege is the very same entities who are part of the alleged conspiracy the district court below referred to the number of applications and said gee there seems to be a lot of them that shows there's competition but the complaint specifically alleged that it was only a few entities that were permitted while you know it's not permitted to tell me if you entities that you contend that can afford according to their business models to participate there's  no exclusionary rule here correct i you're absolutely right permitted in a practical sense and which involves the the application fee which given the history of this process was extremely high inflated and what we will lead to is that was for a purpose so not just the price the but on the face of it on the face of it it's one hundred eighty five thousand or something like that greg two to apply why can't lie can't a producer a manufacturer if you will of something say we want to make sure the people who buy these have the wherewithal to to deal with this process once they buy them we worry that if we just give them out like candy we're going to have abuses out there so we want people to whom people have a substantial stake in buying me so they will protect them and do the right thing with them that may not be a good business model but it's a least a reasonable this model wh plausible that this is a conspiracy my telling people last night i tried to buy a handbag for my wife at a store they went to the store and they said they only give us ten of these because they want them to be rare and we don't have one so i couldn't buy it there and that was their business model so what's what's wrong what's what is that plausible that's an interesting let me think to think that that that are in the complaint that make that possible the first is we specifically alleged that the application fee bore no relationship or reasonable relationship to a purpose such as your honor just describe that that we would that's not enough to prevail at the end of the day but it's we believe enough to get past the motion to dismiss stage but in addition the complaint goes on at length about the history of g t l d delegations and not only the two thousand and twelve route but the earlier around and that history gives a few allegations it's a much much lower price so your honor the justification that you just described would have applied one day i did it to thank you for their minds they sold them it for fifty fifty thousand dollars fourteen years ago  i could buy cars much cheaper fourteen years ago and now they're selling them for one hundred eighty thousand dollars what i did and that fact of that fact doesn't get me towards conspiracy gets me towards high prices but you and i would suggest it makes at this stage of the proceedings at that that allegation plausible but in addition what we also alleged is the nature of namespace business model disclosed in those earlier rounds which posed a threat to the established players and that there is a specific allegation that that higher price not only did it bear no relation to any a justifiable business case but was designed that's the allegation was designed you know i'm see allegation but do you have to have facts under tuam plea as opposed to allegations that make it plausible that this was a big conspiracy and it's the it's your right your honor it's the totality of the circumstances the financial interest the lack of representation the other rule not just the price the limitation to one detail the per application what we would what we've alleged is that the totality of those facts not just one not just the price not just the limitations not just the coerced released the totality of those facts when you look at who the board is and who they are when you look at namespace business model in the prior relationships all of that is enough to make the allegations of conspiracy plausible could you open your own route issues if people don't like what people are selling they go open up a new market and or does and so my question is could you could you open an alternative route we have alleged in the complaint that's not feasible i don't have have they done anything to protect you from doing as i can done anything to protect you who i don't think so your honor i don't think so i'm but what i'm not going to but my technical capability and what i'm not clear about is the role of the united states government which you know in part if i could just go back to the first question which was why are they a competitor in this market and i talked about how this is unique and i thought it was some common ground as well but i think it's common ground it's recognized by the district court and recognized my argument is that the department of commerce gave icann a monopoly position in in these markets and we think that puts icann in these markets for purposes of the case law that requires a monopolist to be in competition the d l c did not give ican old north bridge case where i can is in a separate market like the d t c was and had a monopoly position this is a market that the dio see excites mercy peninsula i just recalled he'll se gave i can a monopoly position in this market there's no market until i can who has the power to control that market it's all that until they delegate but so just and that  difficulty with in your argument is it gave i can the same authorities a government would have which is i'll decide how many of these to sell and at what price but i will be you saying with that monopoly position came the responsibility to be in the markets and that's where i'm having difficulty will it gave the fact that they were in the markets when the did they get it made them the man you in my analogy the manufacturer didn't make them the government they're not claiming immunity because of that but it made them in effect the government that doled out the the dot somethings and that's the point i did for saying that they weren't the regulator to me there are at least a ministry here but importantly and it  regulator but i think the important point there is that in a way they are not the government they are not standing in the shoes of the government congress and the department of commerce expressly stated repeatedly that i can would not be i can't him an opulent position which the district court and i can't says what else could that mean but that they are in the market to say that they were given monopoly power in these markets doesn't just mean they're in the market  of distributing dot some things are creating got some things if you will not in the market of selling them down there at the top of the distribution chain you're your clients for their down your honor we don't think so because this market which refusing to to sell certain t t l d s only the ones that they they want to so they're to the extent they are not selling those while they are still in that market they are the they are the portal to that market they're in the market it's very unusual it's very different from the other cases which hold that you need to be a competitor in the market in order to have a section to claim stated against you but we think on these facts where it's enough befor you sit down i want to ask you about the lanham act claims why are they right the difference is if somebody ever starts using something that your client thinks that they have intellectual property rights to you can move ahead but there is and there's no evidence yet that anybody started using any of these domain names or you're right your honor we would have a claim against that entity who uses we also think we have a claim it's a different claim against the entity who says i am going to sell your trademark but they had to disrupt what they haven't yet right at the time of the complaint they were only plants that they had not yet ok and that's all we can deal with you but even the announcement of i am going to sell your trademark interferes with their announcement that i might i might interfere in your with your intellectual property rights in the future gives rise to a right claim if you will with respect to trademark if there's a disruption in this ties in with  state law claims as well but if there is a disruption in our trademark then that is unlawful interference with the trademark that is right you are not i'm happy to answer questions about rebuttal but i do think i the market for selling top level domain names and so if any of the three of you wish to operate judge dot com or any of the new f domain names that might come on line you cannot go to ikea and obtain that name and we have to we have to buy it from somebody for oh don't go daddy or network solutions or one of the registrars or that icann has a credit right but it isn't so board of icann made up in part of people who for whom i would have to employ i would have to go to buy these in small parts yes and ok so if there i'm not sure they've alleged this but let me make a m a difference this is a hypothetical ok let's assume that they allege that there was an influential group of those people named names faces competitors who are on the board and have got together and said we can we can run this operation in such a way that will be the only people that ever get to sell these things and they reach an internal remit of that and influence the board to make those decisions i don't see those allegations here in that form but if those were made with that be issue i think if there was a sufficient allegation that in and out spaces competitors actually got together and said we want to stop namespace and their so called business model from being able to compete and we're going to set the rules for the game in such a manner that all of us are ok but they're not but they're not i think business in the icann arena that's the full scope of paragraph sixty one of the complaint doesn't allege that those people thought about namespace when they were setting the price that those people thought about namespace when they were establishing the guidebook and then in paragraph sixty six of the complaint he lists the regularly scheduled meetings  little this is outside the record but i'll note for what it's worth that that those board meetings that the transcripts are vailable online so anyone can see what it is the board talked about but instead what we have no the allegation is policy and then time's right and well a corporate board is supposed to meet that that's what the board does among other things and so the fact that we hand for board members to have some unclear conflict but it doesn't relate to named space and those four board members then alleged then that attended regularly scheduled meetings of a not for profit board record the record does not address that i can tell you as a factual matter the department does not have a right but it didn't and i don't know when it created the when it first transferred the the rights to the entity if you will make some suggestions about in the composition of the contact with the department of commerce and other members of the clinton administration to vet those candidates but the the shaft there's some reference to the briefs and i was trying to go back to the record to the notion that some of these conflicts of interest were built into the department's request that people in the industry be on the board well and so the complaint does refer to the privatisation of the domain name system and what the clinton administration decided in hundred eighty was that the government should get out of the business of running the domain name system but they did not want governments translation the united nations to run the  asked industry to create a system which has what we refer to as bottoms up policymaking we have a number of constituent organizations and those were going to zation generate policy recommendations to icann including specifically with respect to the program that the plaintiffs doesn't like and i can then adopted various policy recommendations in this instance what was adopted was that rather than having a very limited number of additional top level domains which was the purpose of the what happened in the year two thousand the point if applied in the year two thousand and it doesn't say this in the complaint but the announcement that i can made in the application was this was for what we call proof of concept by the words let's add some tough level domains to the internet and make sure they don't break the internet we added seven or eight names dot museum info pro dot bids they worked successfully the internet was secure and so many years later a policy organization said we want to have on unlimited number of additional domains and again it's not in the records it's not in the complaint but the point of knowns i can receive nineteen hundred and thirty applications for new top level domains i couldn't put that in the record because it's not in the complaint but that's the facts and is there in the record matter for it to see there is there reason why the internet can't be open in effect to anybody who wants to occurs after the dot yes your honor speculated that i can set the fee high because they wanted to make sure that the applicants had the wherewithal to be able to operate a registry on the internet and that is exactly a primary reason why the fee was set high i should know that setting a high fee and that's really what this case is about is absolutely lawful even if i can was a monopolist and under trink owen lots of other cases a monopolist can set a high price it has to do something more than set a high price in order to violate section two but here the district court ruled based on the allegations of the complaint that i can have natural monopolist but the market that it is monopolizing if as it were is the market to administer domain names one entity the government decided should be the only entity to administer the system to decide who gets additional games to decide who gets to register those names to decide who gets to operate the country co throughout the world that entity today's icann so it is not competing i'm going full circle to where one of the questions you've asked mr miller it's not in a market that the plaintiff is in the three so called relevant markets that are referenced in the complaint i can isn't in any of those markets its bylaws don't permit it to be in those markets and we provided that information to the district court and we also provided it to this court can you can act claims because i understand that the allegation is they have copyright interests i take it your trademark interests in in certain domain names or with  complaint i think it was accurate what the what the plaintiff said point of said i can has accepted applications or ok from third parties that wish to operate some of the top level domains that are also in the alternative in turn that the plane and operate right what and that at the time that the complaint was filed i can have accepted applications from some number of applicants for the same string when you say accepted applications that doesn't meet a granted the contract no and in fact at the time the complaint was filed i can had not except i had not delegated so i can receive the applications it then spent a year a value waiting the applications in many instances there were multiple entities that applied for the same name one of the plaintiffs names with all due respect to the court was done songs which may turn out to be a popular name for people who are in opposition to something well i can receive multiple applications for that particular string and then there's a whole process the gets so that when this was when this motion dismissed was before the district court nothing had been done right and the district court said if something gets done come back and complain but in the meantime the fact that people are that people who applied for them and you haven't rejected their applications out of hand doesn't permit state or animal rights i want to make sure i understood this if procedural history not the district court did not address because of the rightness argument the second argument that we addressed in our those marks in copier but that that's beyond the face of the complaint isn't well it has to be alleged in order to state a claim that not only is i can imminently going to use those marks but that those marks would be used in commerce are cases that are cited in the papers that talk about people setting up domain names in order to criticize other people doesn't have anything to do with commercial use and the courts say let's not tr can is advertising that it or somebody else is going to sell names in one of the strings that are at the point of also has it doesn't allege that and the reason does allege i can't doesn't do that so there's a a dual have a different kind of question which is procedural in matter as your opponent got up and suggested and i understood the district court dismissed all the claims with the ability except the sherman section to claim correct and that that was with prejudice correct why was that a claim that ought to have been dismissed with prejudice when there might have been a chance to prove to file under section two a conspiracy to monopolize well i don't know that it be befor us i don't i don't see how that's before you because i don't i mean i don't know that it is that that's one thing i wanted you to talk about i don't see how judge is a frankly when i read it out section t claims even if i agreed with you there was no monopolisation claim i don't know that one could say on these facts there's no conspiracy to monopolize claim and if in the motion to dismiss by saying let us amend section to correct and so i don't see how the district court could hold mantissa pated the theoretical possibility of that clause i'm sure my colleague was going to help me out as much here did i just wan  amendments that add facts under twamley with respect to the section one claiming the tortious interference claim may be trademarks claims but i have a new cause of action that i would also like to allege and that cause of action was not  answer is i don't i think the dismissal with prejudice was was accurate because there's no market that but the use of that there's no market that i can is monopolize and there's no injury to purposes since you dismissed your complaint after being given the opportunity to amend it without amending it for purposes of today's review we can say well well i guess i can think of facts that he might make leave to amend for one reason and that is that the department of commerce thrust the monopoly upon icann our response to that is that's an error well because if you are make maintenance claim if you are only making a a monopolization claim as a poster conspiracy to monopolize claim then the legal acquisition of a monopoly would be a complete defense only monopolies that are forbidden under section two are those that are that occur because of illegal conduct but unlawful maintenance is also a section to claim and that's the claim we asserted not acquisition but did make but that's a market issue again isn't because the maintenance they're required by law to maintain what they do the question is are they in your market so let me turn to that because councilor for i can stated that if you folks want to go to a judge if you want to get judge dot com you need to go to go daddy not that i can characterization but we've decided already how it's supposed to do that we've already decided how it's to do that it's to do it in compliance with section one and section two of the sherman act your honor asked could we have an open market yes we can have an open market if i can stop making decisions based on as is alleged in the complaint a desire to only allow the big corporate the people with financial power the entrenched members of this industry to participate in the industry well then without that without icann opening the markets that's what  that's what that's what we complain about in the two thousand and twelve application around not just price a whole series of things the closing of the internet without justification it may be that icann has a justification and that they'll share that justification with us in this case in discovery and on summary judgment but right now with this complaint we would respectfully submit we've done what we've can to create a totality of the circumstances the factual allegations which together in and also the question that's in the complaint which we raise to why can't the internet be open together what this all suggests is a claim that survives