[EP5.2] [Social] Determine ENS Labs’ next steps in eth.link litigation

FYI, Labs also now owns eth.page, which is currently unused and could be stood up as an eth.link replacement if necessary.

4 Likes

Okay, the offer is out there. No strings attached.

On another note, after reviewing the nature of Manifolds response that @clowes.eth directed us to “For your eyes only”; I think It is important to take note on the context of which ‘sambcha’ addresses their intent about the use of the domain.

"We wanted the domain name because we had intentions" and then “…could have been held…”
It’s also important to look at the tweet that says

“it was either us or the chinese buyers” - this implicates that there was mere interest in actually obtaining the domain in the first place. It establishes that because the other party at auction was Chinese, was a motivating factor in purchasing the domain. Manifold established their previous tentative intent to use eth.link for the possibility of a legitimate purpose was considered at a prior time, before the auction. This is evident in their context a language using “had” and “could have” and by the use of an example use case that was described with minimal description.

Now we can move forward in this timeline and see that this potential intent; which again is vaguely established, had quickly shifted into willfully and explicitly soliciting eth.link back to ENS within a very short while after the auction taken place without hesitation or serious compromise. If Manifold would have offered the domain back but with clear and obvious hesitation, aggressive demands or supporting their own case and providing more of a reason why their possession of; showing clear intention of implementing their previous infrastructure plans, then maybe a justification exists that supports their demand for damages in the amount of $300,000. Given that those elements were of speculation that they “could have” done or “had” intent to was emphasized without providing a comprehensive and certain plan for infrastructure use, the decision to solicit to ENS immediately stems not from a legitimate use but motivated by monetary gain.
Otherwise, intent for legitimate use would not invoke such an immediate solicitation.
It’s likely they acted in good faith to keep the domain in the community of certain persons but when acquired, the idea to extort this asset for profit seems to be presented without justification of amount demanded.

Given this, aren’t the first 3 votes are null & void in the event of vote 4 not passing?

It doesn’t feel beneficial to the DAO or ENS as a whole that all of the work towards the $300k settlement is contingent on covering the $750k legal fees without a deeper discussion considering the DAO was not aware of this previous spending.

Are we able to make these two separate proposals? Given that this is the first the DAO is hearing about both the 300k and the legal fees - why don’t we problem solve for eth.link then for the legal fees?

We’d be in favor of structuring the proposal in a way that the DAO can first vote on whether or not to pay the settlement, and then have a further discussion regarding the legal fees. We want to balance ensuring that Labs feels supported for its efforts on behalf of ENS and the DAO, but also that the DAO feels that it has had sufficient opportunity to make this decision in a measured and open way given the lack of previous context.

Very interested to hear any other delegate’s thoughts too :sparkles:

1 Like

Thanks for sharing, Nick.

I’m on board with this approach.

There are essentially two decisions here:

  1. What to do about eth.link.
  2. Reimbursing ENS Labs for legal costs.

To ensure fairness in the DAO’s decision-making, I’d be in favor of not tying one decision to the other.

Personally, I support taking care of ENS Labs for their efforts, although it would’ve been better to decide this sooner. I suppose there were necessary reasons for the delay, like confidential information or ongoing negotiations.

As for eth.link: Sure, it’s a valuable domain. But considering ENS Labs already has eth.page and eth.limo is doing well, it raises questions about rewarding questionable behavior from Manifold Finance.

Thanks again for bringing this up.

2 Likes

eth.link has been functioning very well ever since Manifold started operating it. It was non-existent before. If ENS Labs spends over $1M on it, they should ensure that it stays alive :grimacing:

My bad, I had wrong info

Yes. If that’s ambiguous in any way I’m open to suggestions on how to reword it.

I don’t think it’s reasonable to open Labs up to a situation where we could be expected to foot the bill for the litigation, while the DAO pays only a settlement amount. The two are not separate; without the litigation, the settlement would not be on the table.

We believe that pursuing the lawsuit was in the interest of the ENS community and the DAO, but if the DAO believes Labs was wrong in pursuing this case, it has the option of refusing to reimburse us. I don’t see a rationale for endorsing the settlement but not the legal case that led to it.

eth.link is a significant asset used to provide access to ENS+IPFS sites (e.g., vitalik.eth.link). If Labs were to proceed with an interstitial, I imagine it would damage existing relationships and lessen users’ confidence in ENS overall.

On the other hand, alternatives like eth.limo have existed and offer nearly, if not equally, the same benefit.

I agree that it is unfortunate that the expenses incurred by pursuing this litigation were not communicated prior to this proposal. At the same time, I can also sympathize with the sensitive nature of this matter and understand why Labs might have been reticent to communicate.

It helps to frame the legal fees as a sunk cost; it would be churlish not to support Labs in their decision to pursue this case. Therefore, I believe that the DAO should furnish both the settlement and the associated fees. However, I believe that Labs should have better anticipated this outcome and communicated it to their constituency with more notice.

1 Like

I was going through the documents, pretty interesting read if you ask me

It appears, that there is a fairly strong case here, although common sense tells me that avoiding courts is always a good idea

I would vote:

1 - YES
2 - YES
3 - NO
4 - YES

There is no doubt that True Names is acting in the best interest of protocol. Frankly I don’t see how is this a problem, that it wasn’t disclosed sooner - so there was a situation, True Names was stuck within the process, what else is there to discuss. It is what it is.

Total cost comes to 1mUSD, but that is not unheard of in the industry and in fact, not the largest amount. Some precedents:

30mUSD - Niue is suing a giant Swedish foundation over a domain name

30mUSD - Cybersquatting Trial Against GoDaddy Begins

3mUSD - UZI Nissan VS Nissan car manufacturer

and so on

It appears, that it’s just cheaper to cover the cost and move on. In addition I think it’s a good thing that True Names made all this effort to fight the case. Let’s say they’ve choosen not to fight the case, and not to spend all this money - what do you think would’ve happened then? The circumstances could’ve been way worse.

In my opinion it is optimal to cover 1mUSD rather than fight the case and blow a couple of more millions on the air.

2 Likes

This is now live for voting.

I will be abstaining from this vote.

Am I mistaken or is there no way for someone to vote “No to everything”?

Simply click ‘vote’ without selecting anything:

Screenshot from 2024-02-21 16-44-57

hmmm ok. i tried it and it works. not exactly intuitive or clear tho that this is an option. seems strange we’re doing a vote where voting “no to everything” is this unclear

Adding my 2c here-

RE litigation costs: I actually remember @khori.eth talking about costs associated with securing eth.link back in August (minutes here) as part of the Labs 2022 Financial Breakdown (linked here). Can’t imagine it’s been an easy process so I’m glad to see light at the end of a long tunnel here.

I am voting YES to reimburse labs for the legal cost. Getting to settlement has probably meant endless nights and hours spent on this case - kudos to Labs + legal counsel for getting to this result. I will be approving the settlement as well.

Continuing litigation at this stage will no doubt only lead to more hours + cost spent on this case, without a necessary guarantee of a better outcome for Labs.

To that end, my voting choices will be YES to 1, 2, and 4, and NO to 3.

5 Likes

I found this vote quite hard to vote on.

I don’t think that manifold’s bad actor behaviour should be rewarded in this case. I do recognize that legal costs have gathered and at this point something needs to be done.

So I voted for:

  1. Do you approve the proposed settlement? - No
  2. Do you approve of offering a compromise amount? - Yes
  3. Do you approve of continuing the litigation? - Yes
  4. Do you approve reimbursing ENS labs for its legal expenses involved in pursuing this case? - Yes

To explain a bit. If the people who are involved in the litigation feel they can continue and there is a good chance of a positive outcome they should feel free to do it.

The settlement should not reward manifold for their behavior. If at all try to find a smaller compromise.

ENS Labs should be reimbursed for the costs they have so far covered from pocket in their fight for eth.link.

4 Likes

It is very unlikely that continuing litigation will be cheaper than just finishing the matter altogether

I agree. I voted for options 1, 2, and 4.

With regard to the aforementioned, I am concerned that agreeing to a settlement would set a bad precedent and embolden other litigious actors to file suit. I doubt this will be the last instance when ENS faces scrutiny or legal risk.

I recommend that Labs prepare by developing a strategy to deal with similar situations in the future. Litigation is not only a burden but also a distraction that diverts energy and resources away from pursuing worthwhile goals.

Optimally, they should promptly communicate this strategy, to the extent they deem necessary, while ensuring it does not prove disadvantageous to their approach.

3 Likes

This vote has now closed. Fire Eyes chose not to vote on this proposal as we believe it was incorrectly structured. Given the 3 dependencies (discussed in previous replies above) none of the votes mattered if the reimbursement wasn’t approved.

This is in addition to issues around the explicit wording of “options receive a majority (50%) of approving votes will be enacted”, when the voting framework made it very difficult to vote against any individual decision (multi-choice approval voting).

It’s our position that Labs should continue on whatever path they believe is best in this situation - hopefully settling with Manifold to re-acquire eth.link. The final legal costs can then be calculated and a proposal can be made about the reimbursement of labs for these legal costs, something Fire Eyes will fully support.

The legal defense of ENS, it’s technology, IP and assets is of huge importance and the Labs team are clearly in the best position to do this, however bringing this current case to light at the same time that decisions are posed to the DAO about asset acquisition and legal reimbursement combined into a convoluted proposal is not the ideal path forward.

These are unprecedented decisions that the DAO has to manage alongside Labs and after talking to multiple delegates we want to make sure we’re able to set things up in a purposeful and precedent-setting way.

4 Likes

I decided to abstain from voting because of the reasons mentioned before.

I would vote to approve the proposed settlement and reimbursement for ENS Labs. A lot has already been spent on the process, so it’s worth finishing it asap and accepting the offer. If this offer had no previous costs, I’d prefer not to reward bad actors.

4 Likes

I voted yes to all 4, basically Labs (with advice of counsel) is in the best position to make the best decision with respect to the litigation.

A little insight, over 90% of all litigation will result in settlement. Here in Florida I think it’s actually closer to 97% these days.

Settlement is a good thing, it allows the parties to save time, money and have a guaranteed outcome acceptable to all parties. As the saying goes anything can happen at trial.

For those concerned about “rewarding” bad behavior with a $300K settlement to Manifold, it may help to reframe it as follows…

Whether or not you think they did anything wrong, they acquired a domain name for ~$800K which anyone could have acquired. They are not a party to the current lawsuit, but they may have legal rights and a claim with respect to the domain which could potentially be brought against GoDaddy, ENS, or both. The actual parties to the case are ready to settle, but because of the issue of third-party rights they desire to secure a release (the “global settlement”).

I’d imagine if the shoe were on the other foot folks wouldn’t be as quick to waive their legal rights without adequate consideration.

$300K is a small price to pay considering a potential second lawsuit, and associated costs, hanging over Labs’ head like the Sword of Damocles.

I hope everyone can view this litigation as what it really is, historic and a good outcome. The reason we study history is so we can learn from it and hopefully avoid repeating mistakes of the past. It’s clear from the comments, one lesson learned by many is that litigation is time consuming, costly and should be avoided when possible, but some of the comments overlook the proposed global settlement applies this lesson by securing release from a non-party to the lawsuit avoiding the potential expense of future litigation which likely exceeds the proposed settlement amount.

Nice work and good job.

6 Likes

actually now that I think about it, this is the most correct option

and excellent analysis overall :clap:

3 Likes