Many years ago, most likely 1997, I received a telephone call from an attorney who said he had seen BNA's coverage of Internet law developments. He was puzzled at our apparent belief that we could write intelligently about the subject without speaking to him. Those weren't his exact words, though that was the gist of it.
Fortunately, however, he followed up his blunt assessment of my job performance with an act of generosity. Would I like to stop by his office to meet him, and to hear about some of the novel legal issues he was working through on behalf of his client?
I accepted the invitation, and not long thereafter found myself sitting in a small, sparely furnished office at Network Solutions Inc. headquarters in Herndon, Va.
I don't have my notes from that meeting, nor do I have a good memory of everything that was discussed. I recall listening to a spirited defense of NSI's infamous (pre-ICANN, pre-UDRP) dispute resolution policy, how it came to be written, and why it was impervious to legal challenge.
I also remember this: At one point during our meeting, the gentleman gestured toward a file cabinet across the room that he said contained all of the lawsuits that had been filed against NSI. The plaintiffs in those cases cannot be allowed to prevail, he said. In fact, he added, those people are going to regret suing NSI. He spoke in a flat, matter-of-fact fashion that left me with little doubt that suing NSI was a complete waste of time.
This attorney and his outside legal team subsequently made good on his promise, or threat, or whatever you want to call it. NSI never lost a domain name case. NSI's attorneys built, in court and in Congress, the legal foundation on which the domain name industry rests today.
NSI litigation established that providing domain name registration services is not an actionable trademark use of marks similar to the registered domain name.
NSI litigation established that domain name registrants are not third-party beneficiaries of registry agreements.
NSI litigation established that a registrar does not violate free speech rights by refusing to register a domain name.
NSI litigation established the principle that a refusal to create a new top-level domain is not an antitrust violation.
NSI litigation established that registrars are not liable under trademark law or the ACPA for bad faith registrations.
NSI litigation established the domain industry's right to exercise control over "expired" domain name registrations.
NSI litigation established the principle that domain name registrations are contractual rights only.
As a result of these courtroom victories, domain name registrars, registries, and even ICANN itself, with its aggressive new top-level domain program, all operate in a business environment that is nearly free of litigation. They can thank NSI for that.
The following dates are useful to appreciate the pioneering nature of NSI's courtroom activities:
Nov. 25, 1998. The Department of Commerce signed the Memorandum of Understanding with ICANN on Nov. 25, 1998. ICANN was involved in any of the lawsuits discussed below.
Nov. 29, 1999. The Anticybersquatting Consumer Protection Act went into effect upon President Clinton's signature on Nov. 29, 1999. NSI's lobby team nailed down domain name registrar protection from trademark infringement claims with the passage of the ACPA.
Nov. 30, 1999. The first registration of a domain name in the .com, .net, and .org top-level domains by an ICANN-accredited registrar (other than Network Solutions) did not occur until after Nov. 30, 1999, the date of the conclusion of the testing phase of the Shared Registration System.
Dec. 1, 1999. The Uniform Domain Name Dispute Resolution Policy was approved by the ICANN Board of directors on Oct. 24, 1999. The first date for filing a UDRP complaint was Dec. 1, 1999.
The articles I've collected below are not a comprehensive account of all of the domain name-related cases that NSI was involved in back in the 1996-2000 time period, but they give a taste of what things were like back then.
One final act of generosity. Several years later, I was recruiting speakers for an Internet law conference in Washington, D.C. NSI's attorney said he knew a great guy, "Francis," an Australian, that he was certain would fly over from Geneva if I asked him nicely. Sure enough, "Francis" accepted my invitation, later gracing our conference with a superb talk about a project he was closely involved with, the Uniform Domain Name Dispute Resolution Policy.
This post is the third in a series collecting early Bloomberg BNA coverage of the Internet Corporation for Assigned Names and Numbers, on the occasion of its 50th public meeting in London June 22-26.
Published April 26, 1996
Network Solutions Inc.'s policy for handling disputes over the registration of Internet domain names deals a strong hand to trademark owners. Too strong, says Roadrunner Computer Systems Inc., a small Internet access provider that is now facing the prospect of having "roadrunner.com" wrested away by entertainment giant Warner Brothers Inc. Roadrunner was the first entity to register "roadrunner.com" with NSI, but Warner Brothers has a trademark registration for "ROAD RUNNER." In a complaint filed late last month in the U.S. District Court for the Eastern District of Virginia, Roadrunner asserts a number of legal challenges to NSI's dispute resolution policy. (Roadrunner Computer Systems Inc. v. Network Solutions Inc., DC EVa, Civil No. 96-413-A, amended complaint filed 4/16/96)
No hearing date on Roadrunner's request for a preliminary injunction has been scheduled. Through counsel, NSI has stated that it has no present intention of revoking Roadrunner's right to continue to use "roadrunner.com" during the pendency of Roadrunner's negotiations with Warner Brothers--provided Roadrunner posts a bond, as required by the policy.
Roadrunner obtained the right to use "roadrunner.com" in May 1994, prior to the imposition of NSI's current domain name dispute resolution policy. At the time, domain names were parceled out on a first-come, first-served basis. Trademark law did not figure into the equation. That's no longer true.
The NSI policy now in effect provides that the owner of a registered trademark from any country may challenge another party's ownership of an identical domain name by submitting a registration certificate that predates the first use of the domain name. Unless the domain name owner submits its own registration certificate within thirty days of notification of the challenge, the domain name is put on "hold" until certain criteria are met.
According to one of its attorneys, Carl Oppedahl of Yorktown Heights, N.Y., Roadrunner was unaware of the change in policy until it was notified by NSI in December of 1995 that a challenge to its domain name had been made by Warner Brothers based on a federal registration for toys and costumes.
Roadrunner responded that: the names were not identical; Roadrunner had been using its domain name for over one year before Warner was granted the trademark registration; the goods/services were not related; and Roadrunner had over 500 subscribers who would be affected if the domain name was taken away. NSI refused to consider these elements based on the policy, according to Oppedahl.
In an amended complaint filed April 16, 1996, Roadrunner makes these challenges:
The amended complaint also requests a declaratory judgment clarifying the relationships of the parties.
Roadrunner claims that it is a third-party beneficiary of the contract between the National Science Foundation and NSI. The contract between NSF and NSI to provide domain name registration services was intended for the benefit of Internet users such as Roadrunner, Oppedahl alleges. Based on this contract, NSI has an implied duty to establish fair and equitable registration procedures, akin to due process rights. Upon adoption of the new policy, NSI breached this duty. The policy is heavily slanted in favor of the challenger rather than the intended beneficiary. The challenger need only show that it has a trademark registration certificate. Upon that showing, the domain name owner is presumed to have violated the challenger's rights to its mark. The challenger has no burden of alleging or proving trademark infringement by the domain name owner and is not required to post a bond before the domain name is disconnected.
In essence, Oppedahl argues, the NSI policy enables a trademark registration certificate holder to obtain injunctive relief by having the domain name put on hold without meeting any of the requirements that would be imposed by a court to get the same relief. Once the domain name is put on hold, the challenger is under no obligation to proceed in any manner.
The public interest factor also weighs in Roadrunner's favor, he charges, because: it is in the public's best interest to have this issue resolved; the issuance on an injunction would injure members of the public, specifically the users of the "roadrunner.com' domain name; and no interest would be at stake if the injunction was not issued.
Oppedahl suggests that NSI adopt a policy that would say "we will do what a court tells us to do." Any other situation requires a pure court-based dispute resolution, with parties subject to Rule 11, and domain name disputes should be treated no differently. At this time the United States is the only country with a domain name dispute policy that grants preliminary injunctions. In contrast, Switzerland has adopted a first come, first served domain name registration policy. If an interested party disputes the registration of a domain name, that party must resolve the issue in court. Oppedahl said this policy is a good idea for the United States. Further, NSI should rethink its corporate mission to look at the public interest.
Before adopting the current policy, Oppedahl complained, the policy was discussed with representatives of the International Trademark Association but not domain name owners. When looking at the public interest, he said, the relevant public to consider are the Internet users and the domain name owners.
Few individuals are completely happy with NSI's current dispute resolution policy. The best that has been said about it is that it was put forward as a good-faith attempt at a compromise between the various competing interests at stake.
In recent months, NSI has been receiving input from a number of groups with an eye toward recommending a new policy to the National Science Foundation. That policy recommendation will be made "within the next several weeks," according to NSI director David Graves.
Published May 9, 2001
A domain name registrar or registry is not subject to liability when it accepts the registrations of domain names that might otherwise be actionable under the Anticybersquatting Consumer Protection Act, the U.S. District Court for the Northern District of Texas held May 1. The court said that Congress did not intend to subject domain name registration authorities to ACPA liability and that, in any event, it would "risk financial ruin" for them to function as gatekeepers for possible trademark infringements (Lockheed Martin Corp. v. Network Solutions Inc., N.D. Tex., No. 4:00-CV-0405-A, 5/1/01).
Based on the text of the ACPA the court concluded that the statute does not create a cause of action for a mark holder against a domain name registrar or registry.
The court also held that accepting domain name registrations does not constitute "use" of a mark for the purposes of bringing an action under the Texas trademark dilution statute, Tex. Bus. & Com. Code Ann. §16.29.
Network Solutions Inc. of McLean, Va., a subsidiary of Verisign Inc., is a domain name registrar accredited by the Internet Corporation for Assigned Names and Numbers. The company, pursuant to contracts with ICANN and the U.S. Department of Commerce, maintains the registry for domain names in the .com, .net, and .org generic top-level domains.
Lockheed Martin Corp., based in Bethesda, Md., is a military and aerospace hardware manufacturer that owns the U.S. trademarks for SKUNK WORKS and LOCKHEED MARTIN.
In 1996, Lockheed brought a lawsuit under the Lanham Act against Network Solutions claiming that NSI's registration of domain names that were identical or confusingly similar to Lockheed's marks amounted to direct and contributory trademark infringement and trademark dilution.
In that case, the U.S. District Court for the Central District of California held that Network Solutions's registration activities did not amount to use of Lockheed's marks for the purposes of trademark violations. Lockheed Martin Corp. v. Network Solutions Inc., 985 F.Supp. 949 (C.D. Cal. 1997) (2 ECLR 1240, 11/26/97).
The U.S. Court of Appeals for the Ninth Circuit held that NSI's domain name registration business was a service, not a product and that NSI lacked the requisite control over the means of infringement to be held liable for the acts of domain registrants. Lockheed Martin Corp. v. Network Solutions Inc., 194 F.3d 980 (9th Cir. 1999) (4 ECLR 966, 10/27/99).
The instant case was brought under the Anticybersquatting Consumer Protection Act of 1999, 15 U.S.C. §1125(d), which creates civil liability for someone who with a bad faith intent to profit from a mark, registers, traffics in, or uses a domain name that is identical or confusingly similar to the mark. 15 U.S.C. §1125(d)(1)(D) states that a person may be held liable "only if that person is the domain name registrant or that registrant's authorized licensee."
Judge John McBryde concluded that the ACPA does not create a cause of action against the defendant with regard to its activities as a domain name registrar or registry.
First, the court found that there was no evidence that NSI had a bad faith intent to profit from the marks it registered or inserted into the registry. Section 1125(d)(1)(B)(i) lists nine nonexclusive factors that can be taken into account to determine bad faith intent; however, the court said, "none of the conditions and conduct listed would be applicable to a person functioning solely as a registrar or registry of domain names."
The court also rejected the plaintiff's argument that NSI's registrar and registry activities qualified as registering, trafficking in, or use of a domain name under §1125(d)(1)(A)(ii).
"The word 'registers,' when considered in context, obviously refers to a person who presents a domain name for registration, not to the registrar," the court said.
By "trafficking," the statute means "sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration," none of which refers to NSI's activities, according to the court.
Furthermore, the court said, it would not be feasible to hold Network Solutions responsible for ensuring that domain name registrations do not violate anyone's trademark rights. "Defendant simply could not function as a registrar, or as keeper of the registry, if it had to become entangled in, and bear the expense of, disputes regarding the right of a registrant to use a particular domain name," the court said. "The fact that defendant could theoretically do what plaintiff asks does not mean that defendant is obligated to do so at the risk of financial ruin."
Finally, the court rejected the plaintiff's argument that unless §1125(d) imposes liability on Network Solutions, then §1114(2)(D)(iii)'s safe harbor would be superfluous. This section provides that a registration authority is not "liable for damages ... for the registration or maintenance of a domain name for another absent a showing of bad faith intent to profit from such registration or maintenance of the domain name."
The court said that this section refers only to " 'damages under this section,' meaning §1114, not §1125, of the ACPA."
With respect to the claim made by Lockheed under the Texas trademark dilution statute, Tex. Bus. & Com. Code §16.29, the court found that Network Solutions had not made use of the mark, as required by the statute.
According to the court, in order to establish a claim under this statute, a plaintiff must show:
In this case, the court concluded, accepting a domain name registration qualifies neither as a use of the mark nor does it "reflect an intent to profit from the mark."
Network Solutions was represented by David H. Harper and Peter Dermot Marketos of Haynes & Boone, Dallas; Thomas Joseph Williams of Haynes & Boone, Fort Worth, Texas; and Philip L. Sbarbaro of Hanson & Malloy, Washington, D.C.
Lockheed was represented by Walker Cheney Friedman and Christian D. Tucker of Friedman Young Suder & Cooke, Fort Worth, Texas; John F. McGowan of Lockheed Martin Corp.; Shahin Rezvani and David W. Quinto of Quinn Emanuel Urquhart Oliver & Hedges, Los Angeles; and Diane M. Doolittle of Quinn Emanuel Urquhart Oliver & Hedges, Palo Alto, Calif.
Published July 1, 1998
Network Solutions Inc., as a private party acting in compliance with a clearly articulated government program, is immune from antitrust liability, the U.S. District Court for the Northern District of California held June 12 (Beverly v. Network Solutions Inc., N.D. Cal., No. C-98-0337-VRW, 6/12/98).
The court also held that registrants of domain names are not third-party beneficiaries of NSI's Cooperative Agreement with the National Science Foundation to exclusively provide registration services in a number of popular top-level domains. The contract does not create a duty owed to registrants of domain names, the court said.
The plaintiff, Arnold Beverly, applied for the domain name "whoswhointheworld.com" from NSI. The application included a copy of NSI's dispute resolution procedure. Subsequently, NSI issued a registration to Beverly for the domain name. Several months later, NSI informed Beverly by letter that it had received a complaint alleging that Beverly's domain name is identical to the complainant's registered trademark. NSI informed Beverly that he had the following options, pursuant to NSI's dispute resolution procedure: (1) prove that he held certified registration in the mark prior to the complainant; (2) choose a new domain name to use simultaneously with the original domain name for 90 days, then relinquish the original domain name so that NSI could put it on hold until the dispute is resolved; (3) file suit against the complainant, in which case Beverly could continue to use the domain name until the dispute was resolved; and (4) refuse the above options, in which case NSI would put an immediate hold on the domain name.
Beverly responded to NSI's letter by refusing to accept any of the options on the grounds that the NSI dispute resolution policy did not apply to him. NSI immediately placed the disputed domain name on hold. Beverly brought suit against NSI alleging several theories of liability--including allegations that NSI violated antitrust law and that Beverly was a third-party beneficiary of the NSI-NSF agreement, which NSI had breached. In turn, NSI filed a 12(b)(6) motion to dismiss for failure to state a claim for which relief may be granted.
The thrust of Beverly's antitrust argument was that the Cooperative Agreement between NSI and NSF "creates a monopoly in that it authorizes NSI to be the sole registrar of certain domain names."
Rejecting this argument, Judge Vaughn R. Walker began his analysis by noting that NSF, as a government agency, is immune from antitrust liability because it is not an "individual" or a "private entity" as defined by the relevant portions of the U.S. Code. Though conceding that NSI is not a government agency, the court relied on Southern Motor Carriers Rate Conference Inc. v. United States, 471 U.S. 48 (1985) for the proposition that private parties acting in compliance with a clearly articulated government program are immune from antitrust liability. "Because NSI's alleged monopolistic actions are expressly contemplated in the Cooperative Agreement, NSI is entitled to immunity," the court held.
Beverly next argued that he was a third-party beneficiary of the NSI-NSF Cooperative Agreement. He reasoned that the agreement establishes that NSI owes him a duty to implement registration policies in a just, fair, and even-handed manner. Beverly maintained that NSI, by unfairly and arbitrarily denying him continued use of the domain "whoswhointheworld.com," breached its duty to him. The court looked to the contract, itself, to see if it was the intent of the contracting parties (NSI, NSF) to benefit a third party. "If no such intent is expressed, third parties are only incidentally benefited by the contract. If the contract only incidentally benefits the third party, imposing third party liability would 'unduly extend contract liability, would introduce new parties with new rights, and would subject those contracting with [the federal government] to suits by a multitude of persons ... which were not, and ... could not have been, in contemplation of [the] parties.'"
Congress has empowered the NSF to "foster and support the development and use of computer and other scientific and engineering methods and technologies, primarily for research and education in the sciences and engineering." Examining this language, the court could not find any support for "the inference that NSF and NSI intended Beverly, or any specific individual, to be a beneficiary." Judge Vaughn R. Walker also examined the language of the cooperative agreement and noted that it did not mention individual users or domain name registrants as intended beneficiaries of the contract. "The Cooperative Agreement, like many contracts between the federal government and private parties, [is] simply meant to create a contractual relationship between the parties despite the reality that the service or product created may benefit the general public."
The court refused to expose either the government agency or the allied private entity to unintended, third-party liability. "To infer a third-party contractual obligation owed to all domain name registrants would subject NSF and NSI to virtually unbounded liability which plainly was not intended," it said, dismissing all of Beverly's claims against NSI.
Published Dec. 24, 1997
Network Solutions Inc.'s registration of a third-party's request to register an Internet domain name embodying another party's trademark does not constitute a commercial use of the mark, the U.S. District Court for the Central District of California ruled Dec. 11. The court declined to issue an injunction against NSI--the company in charge of registering domain names in generic top level domains such as ".com"--prohibiting it from registering domain names that were confusingly similar to the plaintiff's registered trademarks (Academy of Motion Picture Arts and Sciences v. Network Solutions Inc., DC CCalif, No. CV 97-6394-LEW, 12/11/97).
In a key passage, the court stated:
[T]he Academy has not presented sufficient evidence to convince the Court that the act of registering a domain name constitutes the causing of "goods and services to enter into commerce." There is no allegation that Network Solutions has any knowledge of how a registrant will use a domain name. If a company uses a domain name to falsely represent that it is "the Academy" and sends electronic mail to oganizations in which it claims to be the Academy and tries to sell official, trademarked Academy merchandise--the Academy many have a cause of action for unfair competition. There appears, however, to be no ground for bringing such a cause of action against Network Solutions--an entity which is not involved in the commercial use of any of the domain names it registers.
This is the second ruling in recent weeks that NSI's registration of a domain name is not a commercial use of the mark. Lockheed Martin Corp. v. Network Solutions Inc., 2 EPLR 1244 (DC CCalif 1997).
The state of the law in this area, at least in the Central District of California, appears to be that the mere registration of a domain name is not a commercial use under federal trademark law. Panavision v. Toeppen, 945 F.Supp. 1296 (DC CCalif 1996). However, as the court in Panavision made clear, registration with the intent to ransom the domain name to a trademark owner can be a commercial use. A U.K. court recently arrived at a similar conclusion under U.K. law, ruling that the defendants were violating trademark owners' rights by registering domain names containing those trademarks with the intent to sell them to the trademark owners or to third parties. Marks & Spencer PLC v. One in a Million, 2 EPLR 1288 (High Court of Justice, Chancery Division 1997).
Up to this point, trademark owners have fared no better--and arguably worse--than copyight owners in seeking to hold providers of the Internet's infrastructure liable for harm caused by third parties. Trademark infringement claims against domain name registries now stand on weaker footing than copyright infringement claims against Internet service providers.
The plaintiff, the Academy of Motion Picture Arts and Sciences, sued NSI for trademark dilution, contributory trademark dilution, trademark infringement, contributory trademark infringement, wrongful use of a registered mark, contributory wrongful use of a registered mark, false designation of origin and false use, and unfair competition stemming from its registration of domain names that were allegedly confusingly similar to the Academy's registered trademarks "ACADEMY AWARDS" and "OSCAR." The Academy is not likely to prevail on any of these claims, Judge Laughlin E. Waters reasoned.
The court focused on the Academy's dilution and trademark infringement claims. It found to be compelling NSI's argument that it cannot be held liable for dilution because the functions it performs--the registration and cataloging of domain names--are not commercial uses.
The Federal Trademark Anti-Dilution Act provides that the owner of a famous mark is entitled to an injunction against another's commercial use of a mark that causes dilution of the distinctive quality of the famous mark. 15 USC 1125(c). However, NSI has not directly used any protected marks in commerce, and registration of a domain name alone is not a commercial use, the court said.
The Academy has not alleged that NSI markets its services by displaying or otherwise exploiting the Academy's marks, the court said; therefore the statute's commercial use requirement is not met.
Turning to the Academy's contributory dilution claims, the court found that the Academy failed to show that such claims were actionable under either state or federal statutes or case law.
The Academy is not likely to prevail on its contributory trademark infringement claim because it failed to show that NSI had the required level of knowledge or control over the use of the domain name, the court decided.
To establish its claim for contributory infringement, the Academy must demonstrate that NSI had knowledge of another's infringing activity and induced, caused, or materially contributed to the infringing conduct. The Academy unsuccessfully asserted that NSI fell under this description because it registers domain names to parties that participate in infringing activities.
The Academy relied on the Ninth Circuit's decision in Fonovisa v. Cherry Auction, 76 F.3d 259 (1996), in which the court held a swapmeet operator was liable for contributory infringement because he had actual knowledge of infringing activities by swapmeet participants occurring on his property. Here, however, the court distinguished Fonovisa, finding that NSI could not have know that the domain name registrants were involved in infringing activities because it has yet to be determined whether the suspect domain names actually infringe the trademark. Further, it said, NSI has no physical contact with registrants, so as to be aware of their infringing activity.
The court also ruled that the Academy was not likely to prevail on its claims for direct trademark infringement or unfair competition under the Lanham Act because--again--the required commercial use did not exist.
Published Jan. 13, 1999
Network Solutions Inc.'s suspension of an Internet domain name under its domain name dispute policy based on a challenge made by a trademark owner does not amount to a civil conspiracy in violation of federal antitrust laws, the U.S. District Court for the Northern District of California ruled Dec. 30 (Beverly v. Network Solutions Inc., N.D. Calif., No. C-98-0337-VRW, 12/30/98).
The plaintiff failed to show that the suspension resulted from an agreement between NSI and the trademark owner or that its purpose was unlawful, as required by federal law, the court explained.
Nor does the evidence support the domain name holder's claim that NSI is liable for tortious interference with prospective or actual business opportunities based on the domain name's suspension, Judge Vaughn R. Walker ruled, dismissing the complaint.
The allegations in the complaint are not sufficient to establish that NSI and the trademark owners, defendants Reed Publishing B.V. and Reed Elsevier Inc., committed civil conspiracy, the court ruled.
The dispute arose when NSI suspended the plaintiff's domain name, "whoswhointheworld.com," after defendants asserted superior rights to the domain name under NSI's domain name dispute policy. Pursuant to the policy, which domain name registrants agree to by submitting the domain name registration application, the owner of a trademark can have an allegedly infringing domain name suspended unless the domain name holder can show prior rights as defined under the policy. The plaintiff claimed that the dispute policy did not apply to him and filed an amended complaint alleging civil conspiracy and intentional interference with "business relations."
To show a civil conspiracy between NSI and the trademark owner under § 1 of the Sherman Act, 16 U.S. Code § 1, the plaintiff must establish that an agreement existed between the defendants, the nature of the agreement, and that the agreement was to accomplish either an unlawful purpose or a lawful purpose by unlawful means.
However, the court found that there was no evidence of an agreement, and that even if an agreement existed it was for the purpose of accomplishing something lawful--i.e., protecting the trademark owner's rights.
Further, the court said, the means by which NSI sought this purpose--through application of its dispute policy--also was lawful.
The plaintiff has not established any injury to competition, as required for an antitrust claim, the court continued. He failed to mention in his complaint the nature of his business or the relevant market. Nor did he include a claim that the alleged conspiracy harmed competition. The only harm he asserted was harm to himself, which does not constitute an injury to competition, it said.
The court also found a lack of evidence to support the plaintiff's claim that the defendants intentionally interfered with his business relations with a third party.
The court noted that it was not clear whether the plaintiff was alleging an intentional interference with contract or with prospective economic relations, and decided to look at both causes of action.
Under either theory, the plaintiff's allegations fail to establish the required elements, the court found. The plaintiff failed to provide evidence of an actual contract with a third party, or that the defendants knew or should have known of the plaintiff's relationship with any third party, it said.
In addition, NSI's actions were not intentional--i.e., designed to disrupt the plaintiff's business relations, the court said. The dispute policy gave the plaintiff an option to mitigate any inconvenience caused by suspending the domain name--e.g., he could have chosen a new domain name and used it concurrently with "whoswhointheworld.com"--but he chose to not exercise the option, it explained.
The court also found that the plaintiff failed to establish that the defendants actually interfered with his economic relationships.
With respect to the interference with prospective relations allegations, the court added, a claim is not actionable unless the plaintiff alleges that the defendant used improper methods which are illegal or independently tortious. NSI's actions were not independently illegal or tortious, but were lawfully taken as a result of the dispute policy in NSI's registration agreement, it said.
This is the second time the court has dismissed the plaintiff's complaint. His first complaint was dismissed last June (3 ECLR 851, 7/1/98). It alleged causes of action for antitrust violations, and for breach of contract and tortious interference with a contract arising from NSI's implementation of its dispute resolution policy.
Published Feb. 2, 2000
Domain name registrar Network Solutions Inc. is immune from antitrust liability for its failure, in 1997, to add new Internet top-level domains, the U.S. Court of Appeals for the Second Circuit ruled Jan. 21. The court explained that, under the terms of NSI's domain name administration contract with the federal government, it had no discretion to add top-level domains (Name.Space Inc. v. Network Solutions Inc., 2d Cir., No. 99-6080, 1/21/00).
In the course of rejecting the plaintiff's First Amendment claims, the court discussed at length the circumstances under which Internet domain names would qualify as expressive speech, rather than mere identifiers.
NSI no longer has the authority that create new top-level domains. Responsibility for adding new online real estate to the right of the "dot" now belongs to the Internet Corporation for Assigned Names and Numbers, a private entity that assumed responsiblity for this aspect of Internet governance in 1999.
NSI entered into a contract with the National Science Foundation to register domain names in 1993. In 1994, the contract was amended to say that applications for new gTLDs were to be handled by NSI "with consultation with the IANA," or the Internet Assigned Numbers Authority. No new gTLDs have been added to the Internet since NSI began registering names.
In 1997, President Clinton directed the Secretary of Commerce to privatize the domain name system. In 1998, the Commerce Department issued its final policy statement on domain name system privatization, known at the White Paper. The White Paper stated in part that any expansion of new gTLDs should proceed at a deliberative pace, in order to maintain the stability and promote the controlled evolution of the domain name system. Pursuant to the White Paper, NSF transferred responsibility for administering the NSI contract to the Commerce Department, the court explained, though NSF expressly agreed to remain responsible for defending the instant lawsuit.
NSI and the Commerce Department entered into Amendment No. 11 to the cooperative agreement in late 1998. Among other things, Amendment No. 11 provided that NSI would continue to operate the master root zone server, or A root, until the Commerce Department ordered otherwise. Also, NSI had to request written direction from an appropriate Commerce official before making any changes to the A root.
Name.Space wrote NSI on March 11, 1997, requesting that several new gTLDs be added to the root system. NSI initially said that it could not grant the request, but would transfer it to IANA. Name.Space then filed suit against NSI on March 20, alleging antitrust violations. After letters were exchanged between NSI and IANA, NSI wrote to NSF in June requesting authority to begin accepting applications for new gTLDs. NSF rejected NSI's proposal later that month, and "explicitly requested that NSI add no new TLDs to the root zone file pending the conclusion" of the government's internal policy consultation process, which eventually led to the White Paper.
Judge Robert A. Katzmann noted that the district court had held NSI was immune from antitrust liability based on the "so-called federal instrumentality doctrine" set forth in the seminal case of Sea-Land Serv. Inc. v. Alaska R.R., 659 F.2d 243 (D.C. Cir. 1981). According to the court, such antitrust immunity of federal instrumentalities is status-based, rather than conduct-based. The applicability of the federal instrumentality doctrine to private entities depends, the court observed, on the extent to which the federal government or its agencies directly own and/or exercise plenary control over the entity in question.
Name.Space challenged the district court's holding that NSI was immune from antitrust liability due to NSF's absolute immunity from suit. According to Name.Space, NSI abused its monopoly power over the domain name registration system, so that it could maintain its control over the A root. Name.Space argued that NSI was not entitled to immunity because no express statutory immunity had been conferred on NSI by Congress.
Moreover, Name.Space contended that there was no pervasive regulatory scheme over the domain name system mandating such immunity. Finally, Name.Space claimed that "government contracting officers do not have the power to grant immunity from the Sherman Act. Such contracts stand on their own footing and are valid or not, depending on the statutory framework within which the federal agency operates." NSI had conceded below that it was not entitled to express antitrust immunity based on statute, but instead argued that it had implied antitrust immunity under the cooperative agreement and Amendment No. 11.
The Second Circuit declined to apply the status-based instrumentality doctrine, noting that "reliance on such a broad rule of immunity might improperly insulate NSI and other private entities that are or will be involved in administering the DNS from liability for future anticompetitive conduct." Thus, NSI's "mere status" as a government contractor does not entitle it to implied antitrust immunity for all its conduct, the court held.
Instead, the court applied a conduct-based instrumentality doctrine, relying on Southern Motor Carrier Rate Conference Inc. v. United States, 471 U.S. 48 (1985). Name.Space was "surely correct," the court said, that the existence of a government contract does not automatically confer a federal agency's absolute immunity onto a private contractor. However, the challenged conduct was "compelled" by the explicit terms of the cooperative agreement and by the government's policies regarding the proper administration of the domain name system, the court stated. According to the court, NSI had no discretion under the agreement to do anything but refuse Name.Space's request. Thus, any alleged abuse of monopoly power was specifically mandated by the NSF and the Department of Commerce. The court opined that private parties fall outside the pale of the Sherman Act if they are acting at the specific direction of a federal agency.
Name.Space also argued that the White Paper was simply not enough to amount to a pervasive regulatory scheme necessary for antitrust immunity. The court disagreed, noting that the specific conduct undertaken by NSI was the direct result of government policy. Consequently, the court held that NSI was entitled to an implied conduct-based immunity for its refusal to add new gTLDs to the A root.
Name.Space also challenged NSI's refusal to add new gTLDs on the grounds that domains were expressive speech protected by the First Amendment. The court said that, although domain names can be communicative and thus entitled to First Amendment protection in theory, the existing gTLDs are not protected speech, because they are no more than "three-letter afterthoughts such as .com and .net, which are lacking in expressive content."
The functionality of domain names does not automatically put them beyond the reach of the First Amendment, according to the court. Rather, the mix of functionality and expression must be sufficiently imbued with elements of communication. The resolution of that question depends on the domain in question, the intentions of the registrant, the content of the Web site, and the technical protocols governing the domain name system, it said.
"In short, while we hold that the existing gTLDs do not constitute protected speech under the First Amendment, we do not preclude the possibility that certain domain names, including new gTLDs, could indeed amount to protected speech," the court stated.
Because the existing three-letter gTLDs, and .com are not expressive "speech," no First Amendment violation occurs when Name.Space is compelled to use them, and only them, when it registers a domain name, the court held.
The court similarly dismissed Name.Space's argument that the government was exercising prior restraint of protected Internet expression by requiring NSI, under Amendment No. 11, to seek government approval before making any changes to the A root. Amendment No. 11 does not constitute a prior restraint, according to the court, because Name.Space "may engage in any expressive speech of its choice by simply adding a period and a three-letter suffix to the speech in question." Moreover, the court stated that the difference between ".forpresident" and ".forpresident.com," does not rise to the level of a prior restraint that offends the First Amendment.
Because no prior restraint existed, the only question left to resolve was whether any restrictions imposed by Amendment No. 11 were reasonable, the court said. Here, the degree of restriction was "so minimal" that it was both valid and content-neutral, and was narrowly tailored to serve a significant governmental interest in furthering the orderly transition to a privatized domain name system.
Name.Space was represented by Glenn B. Manishin of Blumenfeld & Cohen in Washington. Network Solutions was represented by William M. Dallas of Sullivan & Cromwell in Washington. The National Science Foundation was represented by Marla Alhadeff, Assistant U.S. Attorney in New York.
Published Nov. 22, 2000
Domain name registrar Network Solutions Inc. did not violate the First Amendment rights of a would-be domain name registrant when it refused to register several names deemed in violation of Network Solutions's obscenity policy, the U.S. District Court for the Eastern District of New York held Nov. 6 (Island Online Inc. v. Network Solutions Inc., E.D.N.Y., No. 99-CV-6840 (DGT), 11/6/00).
The court decided that Network Solutions's relationship with the federal government was not so close that its actions could be considered state action for purposes of the First Amendment.
In 1993, the National Science Foundation delegated to Network Solutions the task of providing registration services for second-level domain names in the .com, .net, and .org top-level domains. The National Science Foundation agreed to provide general oversight to Network Solutions, but did not limit the registrations that Network Solutions would be able to perform. Network Solutions was the sole registrar in these top-level domains until 1999, when registration services were opened up for competition by other accredited registrars.
The plaintiff, Island Online Inc., attempted to register fuckyou.com, fuckme.com, and cocksuckers.com in April of 1999. Network Solutions refused to register the names. Evidence in the record indicated that third parties had previously requested these names over a dozen times, but each time Network Solutions refused to register them. Island Online sued Network Solutions, alleging that its refusal to register the names violated the First Amendment, and federal and New York constitutional due process protections. The plaintiff requested compensatory damages and declaratory relief.
All three domains have since been registered to third parties, through other registrars.
Before taking up the merits of Island Online's claims, Judge David G. Trager first turned to Network Solutions's argument that the plaintiff lacked standing to sue. There are problems with the plaintiff's request for compensatory damages, the court said, because only a single applicant could have registered the domains sought by the plaintiff. However, a number of parties had previously sought, and been refused, registration of the domains.
The court decided that the cause of action belonged to the first unconstitutionally rejected applicant whose claim is not barred by the statute of limitations. Because the record was unclear whether any of the prior rejected applicants' claims were time-barred, this issue went unresolved. Nevertheless, the court said, there is no reason to belabor the point because the plaintiff, by alleging a constitutional wrong, has standing to sue for at least nominal damages.
The court also found that Island Online had standing to sue for declaratory relief, but that the claim was moot, because other parties have already registered the names and because registration services are available from other businesses operating without an obscenity policy. Under the circumstances, declaratory relief would be ineffectual, the court said.
The court next examined the nature of the relationship between Network Solutions and the National Science Foundation, finding that the NSF had no influence over Network Solutions's obscenity policy.
The U.S. Supreme Court has set out several tests to determine whether conduct by a private entity can be considered state action:
The "public function" test is more accurately described as the "exclusive public function" test, the court said, adding that the Internet "is by no stretch of the imagination a traditional and exclusive public function." Additionally the court found that the registration of Internet domain names "has never been a public function at all."
Moreover, the registration of domain names has never been a public function at all, the court said. On this point the court agreed with Thomas v. Network Solutions Inc., 176 F.3d 500, 511 (D.C. Cir. 1999) (4 ECLR 467, 5/26/99), where the court stated:
A recent and novel function such as domain name registration hardly strikes us as a "quintessential" government service, as registrants suppose. Indeed, it was not the government but the Internet Assigned Numbers Authority--headed by the late Dr. Postel at USC ... that originally maintained host computer name lists.
The plaintiff's argument that Network Solutions is performing an exclusive public function cannot be maintained in light of the facts and this case precedent, the court said here.
As for the other constitutional tests for the existence of state action, the court disposed of them rather summarily. The "symbiotic relationship" test is confined to leases of public property. Cases discussing the "symbiotic relationship" test turn on whether the government benefits financially from allegedly unlawful conduct, and there is no evidence of that here, the court said. Lastly, the court no evidence in the record of a "close nexus" between Network Solutions and NSF such that Network Solutions's conduct could fairly be attributable to the government.
Published Oct. 4, 2000
Internet domain name registrar Network Solutions Inc. did not violate the First Amendment when it refused to register sexually oriented words as second-level domains, the U.S. District Court for the District of New Hampshire held Sept. 28. The First Amendment governs only state action and Network Solutions, the court said, is not a state actor (National A-1 Advertising Inc. v. Network Solutions Inc., D.N.H., No. 99-033-M, 9/28/00).
The court also ruled that even if Network Solutions were held a state actor, the address space occupied by second-level Internet domains are not constitutionally protected "fora" for expressive speech. Domain name space is primarily functional--a pointer to an Internet protocol address--and not a forum for discussion or debate, the court said.
Network Solutions refused to register about 30 second-level domain names (SLDs) requested by plaintiffs National A-1 Advertising Inc. and Lynn Haberstroh, on the grounds that the SLDs violated Network Solutions's decency policy. In 1996, Network Solutions had adopted a decency policy under which it would not register any SLDs that contained the George Carlin's infamous "seven dirty words." A second-level domain name is the part of an Internet address just to the left of the dot in a domain name, e.g., the "bna" portion of the domain "www.bna.com."
The first question, Judge Steven J. McAuliffe said, was whether Network Solutions's decision not to register the SLDs constituted state action. State action, the court noted, included conduct taken under color of federal law. The resolution of the state action question hinged on three factors, the court said. Under the first factor, whether similar future litigation was likely, the court said that the government's role in the Internet was deliberately waning. Because domain name registration has been opened to competition, and because applicants can now freely register SLDs that contain nearly any conceivable word or phrase, the court said it was unlikely that any similar future litigation would occur.
The plaintiffs fared no better under the second factor, whether the conduct complained of was a traditional government function performed by a private party. The court said that the plaintiffs presented a "plausible argument" that during the relevant time period Network Solutions performed a government service, since the Internet was a direct descendent of two governmental creations, the ARPANET and the NSFNET. But while Network Solutions may have been engaging in a public function, the court said, such conduct did not compel the conclusion that Network Solutions was a state actor.
There was no evidence that the government sought to evade its responsibilities by delegating them to a private entity, the court said. Nor was there evidence that the government imposed coercive regulatory restrictions on the registration of SLDs. Network Solutions, not the National Science Foundation, decided to implement the decency policy, the court said.
Neither was the court persuaded that the plaintiffs showed the existence of the final factor, whether the relationship between Network Solutions and the government was properly viewed as symbiotic. There was insufficient evidence to support the conclusion that the federal government was a joint participant in Network Solutions's decision to reject the registrations, the court said.
Even if the conclusion that Network Solutions was not a state actor is incorrect, the court said, the plaintiffs' First Amendment rights were not violated. That a specific SLD might itself contain arguably protected speech does not resolve the question of whether the address space occupied by SLDs constituted a discrete "forum" for speech, the court said.
Few would deny, the court said, that features of the Internet such as Web sites, chat rooms, and newsgroups have become public fora for debate. "That does not, however, compel the conclusion that all conceivable means of communication associated with the Internet necessarily constitute 'fora' for protected speech," the court said. The primary purpose of an SLD is to provide a convenient means by which an Internet user can obtain the unique Internet protocol address of another entity connected to the Internet.
The court wrote: "The Domain Name System serves as a means by which the assist users in locating a specific Internet site; the DNS hierarchy or architecture is not designed to act nor does it function as a forum for the dissemination of ideas, discussion, or debate." Instead, the court explained, such communication and information exchange takes place on multiple Web pages, in chat rooms, and in newsgroups.
Second-level domains might be loosely analogized to motor vehicle license plates, or telephone numbers expressed in acronym form, the court said. "Simply because people might wish to fashion second-level domain names to serve the additional purpose of expressing an opinion or idea does not lead to the conclusion that second-level domain name space constitutes a 'forum' for speech or debate," the court wrote. There is no need, the court said, to contort the SLD, with its 63-character limit, into a vehicle for speech when, at the same time, one might use the virtually unlimited space of the Web page itself.
Even if it were appropriate to view a Web address as a forum, the court said, "it would seem only logical to look at the entire URL--that is, the entire address--rather than one or more of its component parts (e.g., protocol identifier, top-level domain, second-level domain, directories, files, etc.)."
In Name.Space Inc. v. Network Solutions Inc., 202 F.3d 573, 585 (2d Cir. 2000) (5 ECLR 115, 2/2/00), the Second Circuit said--in a case involving top-level domains--that whether or not a domain name was entitled to First Amendment protection depended upon "the intentions of the registrant, the contents of the website, and the technical protocols that govern the DNS." Domain names are thus neither automatically included nor excluded from First Amendment protection, the court said.
Here, the district court said it was difficult to determine whether the plaintiff's requested second-level domains constituted protected speech because there were no Web sites at those addresses.
Along the way, the court noted that it was not making a general holding about the First Amendment's application to an entire Internet resource locator (URL) string. Whatever message the plaintiff wanted to convey by registering tits.com could adequately be communicated by registering the objectionable word at a higher-level domain, such as tits.photos.com--which would not require Network Solutions's approval.
Published April 14, 1999
Seven Words LLC April 12 filed an amended complaint in the U.S. District Court for the Central District of California against Internet top-level domain registrar Network Solutions Inc., alleging that NSI's refusal to register a some of the infamous "seven dirty words" as Internet addresses violates the First Amendment (Seven Words LLC v. Network Solutions Inc., C.D. Calif., 99-02816 SVW, amended complaint filed 4/12/99).
The amended complaint also gave newly created Internet Corporation for Assigned Names and Numbers its first taste of Internet litigation. ICANN, the non-profit corporation recently created by the government to oversee companies that will soon compete with NSI in the domain registration business, was named as a defendant in order to assure that all parties necessary to grant plaintiff's requested relief were in the case.
According to the plaintiff, NSI unconstitutionally refused to register 10 names in the ".com" and ".net" top-level domains, six of which are taken from George Carlin's "Seven Words You Can Never Say on Television" comedy routine. The plaintiff alleges that NSI is a state actor, for purposes of its First Amendment claim, by virtue of its contractual relationship with the National Science Foundation.
The plaintiff claims that the infamous words used in the routine are not constitutionally obscene, and that NSI has no proper basis to refuse to register them as domain names. The plaintiff also alleged that NSI's policy toward registration of domain names containing the seven words has been inconsistent because, it claimed, NSI registered two of the offending words in ".com" but not in the ".net" top-level domain.
Seven Words seeks immediate and permanent injunctive relief against NSI. Specifically, the plaintiff seeks a declaration of its rights to register the domain names, an injunction forbidding NSI to register the names to other parties, as well as a declaratory judgment finding that NSI's registration policy is an arbitrary censorship policy that violates the plaintiff's First Amendment and due process rights.
Published April 26, 2000
A domain name registration is the product of a contract for services between a registrar and registrant, and is thus not a "liability" that can be garnished under Virginia's creditors remedies law, the Virginia Supreme Court ruled April 21 in a 5-2 decision (Network Solutions Inc. v. Umbro Int'l Inc., Va. Sup. Ct., No. 991168, 4/21/00).
In 1997, Umbro International Inc. obtained a default judgment in U.S. District Court in South Carolina against 3263851 Canada Inc. Umbro eventually instituted a proceeding pursuant to that judgment in the Circuit Court of Fairfax County, seeking garnishment of dozens of domain names registered by the default defendant with Network Solutions Inc. In answering the garnishment summons, NSI stated that it held no money or other garnishable property belonging to judgment debtor 3263851 Canada Inc. The circuit court ruled that the judgment debtor's domain name registrations were a new form of intellectual property, and consequently ordered NSI to deposit control over all the domain names into the registry of the court for sale by the sheriff's office.
Justice Cynthia D. Kinser first considered NSI's argument that the circuit court erred in concluding that domain names were a new form of intellectual property, separate and apart from the domain name services provided by NSI. NSI contended that the registration services agreement is the only source of rights acquired by a registrant, and that those rights form a conditional contractual right to the exclusive association of the domain with an Internet protocol number for a given time period. Such services, NSI maintained, were not subject to an execution lien under Virginia law.
Umbro countered that NSI not only agreed to associate a particular domain name with an IP number, but also granted the registrant the exclusive right to use the domain for a specified period of time. That contractual right was intangible property, according to Umbro, in which the judgment debtor had a possessory interest subject to garnishment.
The court pointed out that NSI's concession during oral argument that the right to use a domain name was a form of intangible personal property. That concession, the court said, was not dispositive, and was consistent with NSI's position in Network Solutions v. Clue Computing Inc., 946 F. Supp. 858 (D. Colo. 1996), 1 ECLR 751, 11/8/96. The court said, though that it did not need "to decide whether the circuit court correctly characterized a domain name as a 'form of intellectual property.' "
The contractual right acquired by a domain registrant is "inextricably bound" to NSI's other domain name services that make the domain an operational Internet address, the court opined. Thus, a domain name registration is a product of a contract for services, the court concluded, pointing to similar reasoning in Dorer v. Ariel, 60 F. Supp. 2d 558 (E.D. Va. 1999), 4 ECLR 1086, 11/24/99. A contract for services is not a "liability" under Va. Code. Ann. § 8.01-511, and hence is not subject to garnishment, the court held. "If we allow the garnishment of NSI's services in this case because those services create a contractual right to use a domain name, we believe that practically any service would be garnishable," the court explained.
The court noted that if it accepted Umbro's position, the fee pre-paid by a satellite television customer would be subject to garnishment. The court also expressed concern that allowing garnishment in this instance would open the door to garnishing corporate names, via serving a garnishment summons on the State Corporation Commission. The Commission registers corporate names, the court noted, and in doing so does not allow the use of indistinguishable corporate names.
Umbro attempted to distinguish between a judgment debtor's contractual right to use a domain name, which came into existence after screening for duplication by NSI, and NSI's services that continue to make a domain name an operational IP address. The court acknowledged that other courts have made similar distinctions with regard to telephone numbers. In Georgia Power, 559 F.2d 1321 (5th Cir. 1977), the court had said that for a business, telephone numbers constitute a unique property interest, and their value increases as the number becomes widely known. The Fifth Circuit then distinguished the property interest in such telephone numbers from a subscriber's rights to a telephone utility's services, Justice Kinser observed. However, the supreme court noted, other courts had reached a different result. Slenderall Sys. of Berkeley Inc. v. Pacific Tel. & Telegraph Co., 286 F.2d 488 (2d Cir. 1961). Though cognizant of the similarities between telephone numbers and domain names, the court opined that neither one existed separate from the respective service that created it.
Writing in dissent, Justice Compton, along with Chief Justice Carrico, disagreed that NSI's services for domain registration could not be separated from those services that made the domain operational. NSI had received everything required to give the judgment debtor the exclusive right to use the registered domain name, the dissenters argued, thus creating a valuable asset of intangible personal property in which the debtor had a garnishable possessory interest.
Published March 28, 2001
Network Solutions Inc.'s de facto control over its customers' "expired" domain names does not in an of itself constitute a market for the purposes of antitrust analysis, the U.S. District Court for the Northern District of Alabama held March 22 (Smith v. Network Solutions Inc., N.D. Ala., CV 00-BU-2769-S, 3/22/01).
The end result of this conclusion was the court's dismissal of a lawsuit alleging that NSI's retention of control over domain names after customers had failed to renew their registrations was tantamount to the unlawful exercise of monopoly power over these domains.
The court said that, because the number of possible domain names is unlimited and domain names are reasonably interchangeable, control over a finite set of domain names does not give a registrar monopoly power in a relevant market for purposes of antitrust analysis. Products need not be identical in order to be considered part of one market, it said.
The plaintiff, a dealer in computer equipment, tried to register certain domain names that had previously been registered by Network Solutions Inc. but whose registrations had expired and had not been renewed. However, the domain names had not been "deleted"; i.e., they were still listed as being registered through Network Solutions and therefore were not available to be registered by the plaintiff.
The plaintiff charged that by failing to delete domain names whose record expires dates had passed, NSI was unlawfully monopolizing the market for expired domain names in violation of the Sherman Act, 15 U.S.C. §2.
NSI replied that it did not immediately delete expired domain names because its policy was to give registrants a grace period following the record expires dates in order to renew registrations without interruption.
Section 2 of the Sherman Act prohibits monopolization of "any part of the trade or commerce among the several States, or with foreign nations." Eastman Kodak Co. v. Image Technical Services Inc., 504 U.S. 451 (1992), gives a two-pronged definition of monopoly:
Judge H. Dean Buttram Jr. found that the plaintiff had failed to meet his burden to present evidence sufficient to show that the defendant possessed monopoly power in a relevant market.
Specifically, the court rejected the plaintiff's view that the relevant market in this case was "expired domain names." The plaintiff argued that NSI controlled some 160,000 expired domain names and that the plaintiff and others had expressed interest in registering some of those names. The plaintiff also argued that "there can be no reasonably interchangeable substitutions for the desired expired domain name because 'each domain name is unique.'"
The fundamental problem with the plaintiff's position, the court said, was that "it ignores that there is no inherent difference in character, for purposes of interchangeability and cross-elasticity of demand, between domain names that are 'expired' and held by NSI and those that are not."
Furthermore, merely because each domain name is in some sense unique, that fact does not put an expired domain name in a separate market. Citing United States v. Continental Can Co., 378 U.S. 441 (1964), the court said that "products need not be entirely fungible to be considered part of the same relevant market." Indeed, the plaintiff was effectively arguing that each domain name is a market in and of itself, "subjecting the entity 'controlling' the name at a particular time, be it a registrar or even a legitimate registrant, to a charge of monopolization."
The court cited Weber v. National Football League, 112 F.Supp. 2d 667 (N.D. Ohio 2000) (5 ECLR 922, 9/13/00), for the proposition that domain names are reasonably interchangeable.
In that case, a domain name registrant brought an action claiming that trademark holders' attempts to use trademark infringement law against the registrant violated § 2 of the Sherman Act. The plaintiff argued that the defendants were trying to monopolize the market for the domain names jets.com and dolphins.com.
The court in Weber found that the relevant market for the purposes of antitrust analysis was domain names in general rather than specific domain names. The court found that "product markets are not defined in terms of trademarks and implied that there were necessarily any number of reasonably interchangeable alternate [sic] domain names to 'jets.com' and 'dolphins.com,' given that the number of domain names is essentially limitless."
The court rejected the plaintiff's argument that Weber was distinguishable from this case, because Weber stated that two domain names could not be a market, whereas in this case the plaintiff was arguing that all expired domain names constitute a market that is dominated by Network Solutions.
"[T]he Weber court did more than decide that the two names did not constitute the relevant market; the court reasoned that the relevant market was all domain names generally as a result of cross-elasticity of demand," the court said.
Given that there are a limitless number of possible domain names, a substitute for any particular domain name could always be found, the court said. Even though Network Solutions might "control" 160,000 expired domain names, this number constitutes only 0.5 percent of all domain name registrations.
The court concluded as a matter of law that the relevant market in question is domain names generally and granted the defendant's motion for summary judgment. The court also summarily addressed several other motions pending before the court, dismissing the defendants' motion to strike evidence, plaintiff's motion for class certification, and plaintiff's motion to vacate a previous order of the court.
The plaintiff was represented by Scott A. Powell and Donald P. McKenna Jr. of Hare Wynn Newell & Newton, Birmingham, Ala. The defendants were represented by Michael L. Edwards, Will Hill Tankersley Jr., and Eric B. Langley of Balch & Bingham, Birmingham, Ala.
Next: The Uniform Domain Name Dispute Resolution Policy.
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