InfoLaw Alert http://www.infolawalert.com Article by Mark Voorhees Redistributed with permission NETWORK SOLUTIONS SAYS NAME POLICY IS "NOT SUBJECT TO REVIEW" BY COURTS Will government contractor at center of Internet controversy get off the hook? 05/17/96 Network Solutions, the company responsible for registration of domain names on the Internet, wants a federal court to declare it can't be sued by companies dissatisfied with its way of handing out the names. Network Solutions says that is takes its orders from the National Science Foundation, although it no longer receives funding from the NSF, and that those orders should "not be subject to review and revision" by courts. That request was made in court papers in response to a lawsuit filed by Roadrunner Computer Systems, Inc. of Sante Fe, New Mexico seeking to force the registry to come up with a different way of giving out domain names to commercial interests. Roadrunner provides Internet services to businesses and individuals. Domain names, of course, are the mnemonic strings of characters that computer users type in to visit a location on the World Wide Web. Commercial domains end in the suffix "com," and this is what the fight is about. While there can be many companies with the name ABC-nearly 40 in the Brooklyn phone book alone- there can only be one abc.com in the world. Network Solutions last year devised a policy to try to deal with the name jam, but the policy, which treats federally registered trademark holders as more equal than other trademark holders, hasn't found many supporters. Roadrunner, for example, is in a bind because Warner Brothers, which holds a federal registration for Road Runner for "toys, namely plush dolls, and Halloween costumes and masks," wants to retrieve the roadrunner.com domain that it acquired in 1994, before imposition of the Network Solutions policy and before the award of the registration to Warner. FAIR AND EVENHANDED In the "real world," the movie studio and Internet service provider can share roadrunner, which is the state bird of New Mexico, as a trademark. But not so on the Internet. Before filing of the suit, Roadrunner was in danger of losing its online moniker, which would have had a sharp effect on its business. The suit alleged that Network Solutions breached its duty to public to hand out names in a "fair and evenhanded" fashion. Roadrunner wants a court order forbidding Network Solutions from taking away the roadrunner.com domain and forcing the company to adopt a new policy. The suit was filed in federal court in the Eastern District of Virginia, where Network Solutions of Herndon is based. A preliminary injunction hearing is set for Friday, May 17. Network Solutions recently countersued, saying essentially that the court should declare that: a) the policy is beyond court review; or b) if court can review the policy, it should find that Network Solutions didn't do anything wrong. It also seeks permission for Network Solutions to take away or at least put on hold the roadrunner.com domain. Network Solutions' counterclaim reiterates its long-standing position that it is handing out conveniences, not trademarks. The gist of Network Solutions' case seems to be that, as a government operative, it should get off the hook. The problem with the argument is that the lines of authority above Network Solutions are so tangled that it's not clear who-if anyone-is in command. In court papers, Network Solutions says that "ultimate authority for registration of nonmilitary Internet users rests with the National Science Foundation." Depending on how and when you look at it, that statement has some truth. Between 1993 and last year, the foundation funded Network Solutions' registry and oversaw policy decisions, including the policy under challenge. Even today, there is an ongoing relationship that has survived the cutting of financial ties. Still, it is ultimately risky business to make ultimatums about where "ultimate authority" rests in the Internet. Even the contract-formally known as a cooperative agreement -between the foundation and the registry says that at least some responsibility may rest elsewhere, in the mysterious, decentralized, inscrutable world of Internet governance. Most documents, including the cooperative agreement, acknowledge that the Internet Assigned Numbers Authority has responsibility for making sure that the Internet's naming and addressing scheme is functioning. IANA, as it is known, is run out of the University of Southern California by Jon Postel, a networking expert; it has delegated its some of its authority to Network Solutions. Who controls IANA? It depends who you ask. In a paper, presented last February at an Internet workshop, David Randy Conrad of APNIC, the Asian registry, wrote that the "administrative infrastructure has been an ad hoc affair, with loosely defined functions." One model shows the U.S. Department of Defense running IANA through the Federal Networking Council. This is largely a historical view reflecting the origins of the Internet as a defense project. Another model shows the Internet Society, a nonprofit organization, running IANA through the Internet Architecture Board. A third model is that IANA is essentially run by Internet service providers. Officially, IANA says it is chartered jointly by the Federal Networking Council and Internet Society. This confusing state of affairs may create a jurisdictional nightmare as the Roadrunner suit proceeds. "We want to keep things murky," says a key participant in the Internet community. One thing is clear these days: Despite its heritage, Network Solutions is increasingly acting as a commercial player rather than as a government operative. Last September, Network Solutions began charging for registrations ($100 upfront for new registrants, which covers two years; $50 a year thereafter). At that time, the science foundation cut off funding to the company. Curiously, it did not sever its oversight. It will be interesting to see how much deference a federal judge gives to the actions of a business whose ties to the government are increasingly remote. At least for now, the registry is a toll booth through which all who want a presence on the Internet must pass and pay tribute. Based on the 200,000 new registrations since the imposition of the policy, Network Solutions should have received $20 million in fees, 30 percent of which is set aside for the "intellectual infrastructure" of the Internet, leaving $14 million or so. TOLL BOOTH There are currently more than 300,000 commercial, network (.net), and non-profit (.org) domains registered. This base should eventually provide Network Solutions about $15 million a year, less the 30 percent infrastructure charge, for an annual annuity of about $10 million, based on existing registrations. Of course, these numbers may all change if the Internet community decides to instill competition into the registry business. This is an idea that has been percolating since the imposition of fees. The idea has matured into an Internet Draft, an early step in the journey toward becoming an accepted practice, standard, or way of doing business on the Internet. This process is conducted through the Internet Engineering Task Force, a group of volunteers that, in a wholly decentralized, somewhat chaotic, and even anarchistic process, has amazingly made the Internet fly. Jon Postel, who runs IANA, and a few coauthors have suggested creating up to 50 new registries in the short term and many more eventually. The move would obviously cut into Network Solutions' exclusive business preserve, which, under agreement with the science foundation, lasts until 1998. There are several curiosities about the Postel proposal that bear on the Roadrunner suit. First, the 20-page draft does not mention authority deriving from the National Science Foundation. Rather, the "IANA continues to supervise and control all operational aspects" of top-level domains, the proposal says. INDEMNITY Second, the lords who run the Internet are scared of being dragged into court, a fear that seems unjustified unless there is more than a remote connection between trademarks and domain names. The draft proposal claims that "domain names are intended to be an addressing mechanism and are not intended to reflect trademarks, copyrights or any other intellectual property rights." If that is so, why then is it necessary for the proposal to "provide the IANA with the international legal and financial umbrella of the Internet Society?" By their own words, the authors are worried about being drawn into lengthy court battles. "Indemnification provisions from the registries to the IANA and related organizations may not serve to properly insulate the ISOC, IANA and IETF from legal proceedings, as it should be presumed that any organization which is legally challenged in a significant fashion may be unable to properly pay any judgments levied against it," the authors write. "Current 'deep pockets' legal practice exposes related organizations to the negative effects of these legal actions should the original organization be unable to fulfill its financial obligations." One outcome of the Roadrunner suit, which started out looking to be about trademarks, may be that the rest of us will finally learn the secret handshakes among the inner circle who run the Internet. And that could be a beneficial outcome, regardless of who wins and loses. Roadrunner Computer Systems, Inc. v. Network Solutions, Inc. Company Firm Lawyer(s) Roadrunner Oppedahl & Larson (Yorktown Heights, N.Y.) Carl Oppedahl, Marina Larson Murphy McGettigan Richards & West (local counsel) Kathleen Holmes Network Solutions Banner & Allegretti (Washington, D.C.) Barry Grossman, Alan Cooper, Mary Gronlund Gray, Cary, Ware & Freidenrich (San Diego) David Dolkas email:mark@infolawalert.com Copyright Mark Voorhees 1996