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NSI beats-off domain legal challenge

But grumbling about its hold on the 'Who is' database continues

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Network Solutions (NSI), the former exclusive domain name registrar for .COM, .EDU, .NET, and .ORG, breathed a sigh or relief after it successfully defeated yet another legal challenge - from two rival birthday balloon vendors who both wanted the same domain name. NSI managed to persuade federal judge David Hamilton to dismiss allegations of antitrust liability by Bruce Watts of Green Forks, Indiana. On Watts' facts, he may have a trademark violation claim, but the previous registration of the domain name birthdayballoons.com will stand, and Watts will have to pay NSI's costs. The significant result of the case (and it is the fourth of the type) for registrars is that the judge confirmed that they are immune from antitrust violation claims for domain registration. But for businesses, the decision does not resolve the ridiculous position that for .COM domains, registration is still first-come, first-served, even if there is a pre-existing registered trademark. It takes expensive and often difficult trademark passing-off litigation to overturn the registration. In some countries, such as the Netherlands, the chambers of commerce control the issue of .NL domains, which seems to eliminate most trademark problems and cybersquatting. There is an important side issue that affects NSI, but this has not been much publicised. The Department of Justice began an antitrust investigation of NSI two years ago to determine whether NSI's "Who is" database is solely owned by NSI or not, in response to a complaint from PG Media. Earlier this month NSI received official notification from the DoJ that it was being investigated, but as is so often the case, events have rather overtaken the situation initially examined by the DoJ. NSI was first given the management of domain name registration in a contract from the National Science Foundation in 1993, and this ran until September last year. After some hassles, the Internet Corporation for Assigned Names and Numbers (ICANN) oversaw the transition from an NSI monopoly to a group of registrars (New domain name system kicks off) but all is not harmonious. NSI appears still to be the only .COM registrar at the moment because it has been reluctant to provide the software to make it possible for the additional registrars to access the "Who is" database. In January, NSI stopped access to some data in the database to discourage cybersquatters from buying names for resale. Only when the US Department of Commerce, the new regulator that took over from the NSF, got shirty did NSI restore access to the database last month. The present impasse is more likely to be resolved by negotiation than litigation, but NSI, a wholly owned subsidiary of Science Applications International Corp., whose revenues were $93 million in 1998, has managed to upset many in the community. ®

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