InfoLaw Alert http://www.infolawalert.com Article by Mark Voorhees Redistributed with permission Keep Your Name CAN NETWORK SOLUTIONS ESCAPE RULING ON ITS INTERNET NAME POLICY? Registry wants Roadrunner case dismissed June 14, 1996 Network Solutions is discovering that when it comes to negotiating through the intersection of domain names and trademarks, nothing proceeds as planned. Network Solutions operates under a contract from the National Science Foundation to register alphanumeric computer addresses known as domain names, which are becoming a scarce resource on the Internet. Since late last year, it has been funding itself through user fees of $50 a year. The latest flap concerns Time Warner Entertainment and the roadrunner.com domain. Since March Network Solutions has been fighting Roadrunner Computer Systems, a New Mexico company, which wants to keep roadrunner.com as its address. Time-Warner Entertainment, parent of Warner Brothers studio, complained last November to Network Solutions that, as the owner of a federally registered trademark "Road runner," it ought to be entitled to use the address to promote its well-known (beep, beep) cartoon character. Last week, Network Solutions moved to have the case, which was filed in federal court in the Eastern District of Virginia, dismissed after, in the words of its news release, it "learned that Warner Brothers is no longer asserting any such claim of harm." Like everything else involving domains and trademarks, the motion is not as simple as it seems. NO HARM, NO FOUL Inquiring minds may want to know exactly what that phrase-"no longer asserting any such claim of harm"-means. Michael Lachuk, an inhouse lawyer at SAIC, Network Solutions' parent, says Grant Clark, one of his colleagues, asked Warner Brothers' inhouse lawyer Nils Montan to write a letter saying that it was still being harmed by Roadrunner Computer Systems' use of the domain, as it alleged last November in its protest. Network Solutions wanted the letter to use in the Roadrunner litigation. (Warner has had only limited success retrieving marks on the Net. Take a peek.) "They said they wouldn't send the letter," Lachuk said. When Warner Brothers refused to reaffirm their harm, Network Solutions dismissed the challenge brought under the policy. "It made no sense for us to keep the challenge going if there was no harm," Lachuk said. Without an active proceeding under the policy, Network Solutions quickly moved to dismiss the case as moot. The motion is before judge Claude Hilton. (The supporting brief, with links to several declaration, is here.) Warner Brothers, which was not named in the suit, is not pleased by this public turn of events. "I think it was unwise of them" to issue the news release, Montan said. He declined to comment further. One theory is that Warner, which has been trying to reach an amicable agreement with Roadrunner, did not want to disrupt those negotiations. Carl Oppedahl, counsel for Roadrunner, declined to comment on whether he would oppose the dismissal motion or anything else related to the case. But it's fair to conclude, given the nature of the complaint filed by Roadrunner, that the case won't be over without a fight from Roadrunner. Here's why: Roadrunner, which provides Internet access service, will not be free of worries even if Warner gives up all demands to obtain roadrunner.com. As the holder of a common law trademark, Roadrunner would be vulnerable to the demands of any of several other holders of the federal mark "Roadrunner." Under the policy, once a federally registered trademark owner requests the use of a domain already held by another party, the absolute best outcome for the existing domain name holder is that it can keep the domain name but only if it posts an indemnification bond within two weeks. The bonding requirement would be highly onerous to most small companies, like Roadrunner. Roadrunner holds a trademark from Tunisia that it acquired just before the suit was filed in March. Tunisia has overnight turnaround on applications, while U.S. applications take a year or longer to mature. ENJOINING YOURSELF? Perhaps anticipating that Warner might drop interest in the domain name, Roadrunner's complaint is structured to try to survive the outcome. Roadrunner is seeking a court judgment that Network Solutions be enjoined from enforcing the policy or alternatively that the July 1995 policy, amended last November, doesn't apply to registrations, like Roadrunner's, that took effect prior to the creation of the policy. These prayers may or may not survive, depending on Hilton's willingness to jump into the middle of a mess. Before seeking dismissal of Roadrunner's suit, Network Solutions had countersued, seeking a declaration that the name policy was "not subject to review" by the court because it was approved by the National Science Foundation, which once funded Network Solutions' activities. Alternatively, if the policy was subject to judicial review, Network Solutions wanted the judge to rule that it was not arbitrary and capricious. In its motion (which is actually for summary judgment because it was filed too late to request dismissal), Network Solutions says the court has nothing left to decide. "There is no real or immediate threat of injury to RCS. General debate over the terms and provisions of the Policy, in the absence of any dispute, is purely an academic exercise and does not require this Court's involvement," said the brief. SAIC's Lachuk says that although he believes the case should be dismissed, his company is prepared to defend the policy. "If the judge decides the case is not moot, that's fine," he says. If the case does go forward, Network Solutions' main line of defense is that it is a good soldier, following orders of the federal government, which approved the dispute resolution policy in question. (That policy is also under attack in federal court in California in a suit involving a trademark owner and domain holder.) There is a curiosity and an irony in Network Solutions' relationship with the National Science Foundation. Curiously, although it no longer receives funding, Network Solutions continues to accept supervision through a contract that expires in 1988. "I have no doubt that the National Science Foundation thinks it is in charge," Lachuk said. Ironically, the National Science Foundation stopped funding the registry partly because the Internet was getting too commercial. (Registrations were running at about 300 a month when the contract was signed in late 1992, compared with 2,000 a day.) Just the same, it doesn't mind imposing policies in this increasingly commercial arena. Network Solutions began to charge users of Internet addresses $50 a year last September, just as it was running through the $5 million allotted for registration more than two years prior to expiration of the contract. The original contract gave the NSF the power to approve user fees. NSF officials thought it was wrong for the agency, which was created to promote the progress of science, to foster commercial activities with additional funding. TENNESSEE WALTZ Even if Network Solutions is unable to dodge the bullet in Virginia, it's already managed to escape a shot in Tennessee. Data Concepts, a Nashville, Tennessee, software company, which holds the dci.com domain, sued Network Solutions and Digital Consulting, Inc., of Andover, Massachusetts, last month after Digital Consulting tried to retrieve the name. After Network Solutions stipulated that it would not interrupt Data Concepts' use of the domain name until ordered to by the court, Data Concepts amended its complaint to drop Network Solutions as a defendant. The case, which was filed in federal court in Nashville, will proceed with Data Concepts alleging that Digital Consulting is infringing by using the DCI mark. Data Concepts says it began using the mark in 1981, five years before Digital Consulting, which obtained a federal registration. Before amending its complaint, Data Concepts had raised many of the same problems with Network Solutions' policy, as had Roadrunner. "The so-called Domain Name Policy has not been duly promulgated as a federal regulation pursuant to the Administrative Procedures Act, and the 'policy' affords no due process protection for Data Concepts or other similarly situated aggrieved parties," Data Concepts court papers said. Later on, the papers go on, "NSI excuses this failure to comply with the APA by asserting that it is a private contractor-not an agency of the Executive Branch while also claiming that the "Policy" is somehow cloaked with some form of Executive Branch privilege." Data Concepts' amended complaint seeks a declaration that it has a right to use dci.com and also alleges that Digital Consulting has engaged in tortious interference and unfair competition by trying to retrieve the domain for itself. The original complaint also sought to cancel Digital Consulting's federal registration, but that count has been dropped, presumably because the registration is too mature to be cancelled. Copyright Mark Voorhees 1996 Warner's Mixed Bag ROADRUNNER NOT ONLY DOMAIN WARNER SOUGHT TO OBTAIN June 14, 1996 The domain name roadrunner.com was only one of several that Time Warner Entertainment Co. has tried to win. The entertainment conglomerate, however, has only had limited success. Last November, Anthony Keats of the Los Angeles office of Baker & Hostetler informed Network Solutions of 12 domain names that Time Warner and DC Comics, owner of three Batman-related trademarks, should be taken away from their holders. To date, only one of the domains has returned to trademark owner, six are on hold, which means that it is unavailable for use until the dispute is resolved, and five are still with their original owner, as is the case with roadrunner.com. Domain Name animaniacs.com On hold(was held by We Also Walk Dogs in Naperville, IL) batcave.com Held by Gotham Nights Software in Kennesaw, Georgia batman.com On hold (was held by individual) bugsbunny.com Warner acquired 5/9 dc-comics.com On hold (was held by individual)/TD> dc.com On hold (was held by Spin Consulting in Laurel, Maryland) ddcomics.com Held by Dynamic Doers Comics in Vancouver, British Columbia looneytoon.com On hold (was held by individual) roadrunner.com Held by Roadrunner Computer Systems in Sante Fe, New Mexico superman.com superman.com tasmania.com Held by Marketing Tasmania in Phoenix tazmania.com Held by Taz Mania BBS in Jonesboro, Arkansas email:mark@infolawalert.com Copyright © Mark Voorhees 1996 (text)