InfoLaw Alert http://www.infolawalert.com Article by Mark Voorhees Redistributed with permission INTERNET NAME POLICY DRAWS SUIT IT WAS INTENDED TO AVOID Network Solutions Accused Of Breach Of Contract 03/29/1996 A policy meant to shield the Internet's registry of domain names has resulted in Network Solutions, the registry, being sued. Last year Network Solutions adopted a policy involving the registration of computer domain names that was meant to shield the government contractor from suit. It is somehow fitting, in the crazy world of Internet governance and logic, that the Network Solutions has just been sued because of the policy. Roadrunner Computer System of Sante Fe, New Mexico, has filed suit in federal court in Virginia accusing Network Solutions of breach of contract and other claims relating to its policy of registering domain names. Roadrunner is an Internet service provider that registered the domain name roadrunner.com in 1994 in accordance with Network Solutions' first-come, first-serve policy. Later that year Network Solutions was sued by a disgruntled applicant and registered trademark owner, KnowledgeNet, Inc., when it discovered that knowledgenet.com had already been taken by a consultant in Virginia. Partly in response to that suit, Network Solutions adopted a policy on domain names that has two central themes. It requires applicants to indemnify Network Solutions, and it gives preference to the owners of federally registered trademarks in disputes over domain names. For example, the owner of a federally registered trademark is able to force a domain name owner without a federal registration to give up the domain name during the pendency of a dispute. This takes place even though there has been no independent confirmation that an infringement has occurred. There's the rub. If Roadrunner was forced to change its domain name, even for a matter of days or weeks, it would likely lose customers. Warner Brothers, meanwhile, believes it is entitled to use roadrunner.com since it has a federally registered trademark "Road Runner" in connection with "toys, namely plush dolls, and Halloween costumes and masks." Enquiring minds may wonder how there can be infringement when one company is providing communication services and the other is selling dolls. The answer, according to the Network Solutions policy, is that it doesn't matter. A federal registration-regardless of the country of origin-trumps common law rights, state rights, or any defenses of the domain name holder. Not surprisingly, trademark lawyers have found the solution offered by Network Solutions to the difficult interplay of trademarks and domain names to be no solution at all. Nonetheless, taking advantage of this policy, Warner Brothers last year contacted the registry and sought to win the domain name from Roadrunner. Under the policy, Roadrunner then had 30 days to produce a federal registration or to agree to have the domain name placed on hold during the dispute. Roadrunner and Warner Brothers entered discussions. As part of those discussions, Warner requested that Network Solutions extend the 30-day window. The request was granted several times, with the window now set to expire April 3. TUNISIAN INTRIGUE While these discussions were taking place, Roadrunner's lawyer, Carl Oppedahl of Yorktown Heights, New York's Oppedahl & Larson, obtained a federal trademark registration-from Tunisia. That move should have allowed Roadrunner to keep the domain name until the dispute was resolved, provided it post an indemnity bond with Network Solutions. In this instance, it had not such luck. Grant Clark, Network Solutions' inhouse counsel, refused to accept the registration, saying it fell outside of the original 30-day window. This response apparently provoked the litigation, which is meant to forestall Network Solutions from putting roadrunner.com on hold and to force the company to adopt new policies. "The threatened disconnection is based upon policies implemented by NSI after Roadrunner registered the roadrunner.com domain, which Roadrunner was never told about, and as to which Roadrunner has never agreed. These policies permit what is effectively the confiscation of a domain name from the registered user," says Roadrunner in its legal papers. "The results of applying the NSI policy bear no relationship to the eventual outcome which might be reached by a court considering the merits of the case in which the challenger sought to acquire the domain name." CREATIVITY When all is said and done, Roadrunner must make a case that Network Solutions engaged in conduct that a federal judge or jury finds egregious. Its lawyers took some creative steps to make the case. The suit alleges that Network Solutions, as a contractor of the National Science Foundation, has a public duty to implement policies that are "fair and evenhanded." Its actions have breached this duty, the complaint alleges. Moreover, Network Solutions made an "implied promise" to domain name registrants "not to arbitrarily interfere with their ability to make continued use of a registered domain name, " the complaint says. "Roadrunner has relied to its detriment on this promise." Finally, the complaint alleges, Network Solutions should be liable for any losses that Roadrunner might sustain if the roadrunner.com domain name is suspended. Network Solutions declined to comment. Filed in the so-called rocket docket, the case is likely to get a fast hearing-one way or the other. Copyright Mark Voorhees 1996