Xyz.com Scores Win Over VeriSign in False Advertising Case

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By Alexis Kramer

Statements by internet domain name registry Xyz.com LLC that all the good .com domain names are taken constitute non-actionable opinion or puffery, the U.S. Court of Appeals for the Fourth Circuit ruled Feb. 8 ( VeriSign Inc. v. XYZ.com LLC , 4th Cir., No. 15-02526, 2/8/17 ).

The decision is a loss for VeriSign, operator of the .com and .net domains, which has been competing with new domain extensions such as .xyz since the Internet Corporation for Assigned Names and Numbers launched its new generic top-level domain program in 2012.

VeriSign Inc. brought false advertising claims against the .xyz domain operator for statements concerning the availability of desirable .com domain names. Xyz.com CEO Daniel Negari had claimed it was “impossible to find the domain name that you want” and that “all of the good real estate is taken.”

But Negari’s statements were exaggerations on which no reasonable consumer would rely, the Fourth Circuit said in an opinion written by Judge Pamela A. Harris, affirming a lower court’s dismissal of the case.

“Particularly when it comes to spoken statements like Negari’s, which may be offered more casually than their written counterparts, we must take care not to label as ‘literally false’ what really is no more than a colloquial exaggeration, readily understood as such,” the court said.

The court also said that Xyz.com’s claim that 99 percent of registrar searches result in a “domain taken” page was verifiably true. VeriSign had conceded the accuracy of this data and failed to show how it misled consumers, the court said.

Arnold & Porter Kaye Scholer LLP represented VeriSign. Newman Du Wors LLP represented Xyz.com.

To contact the reporter on this story: Alexis Kramer in Washington at aKramer@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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