Network Solutions said Wednesday that the recent dismissal of a federal lawsuit set a legal precedent that exempts the domain name registrar from future antitrust charges. But an outside observer said that interpretation was optimistic.
US District Judge David F. Hamilton granted Network Solutions' motion to dismiss allegations of antitrust liability. Plaintiff Bruce Watts sought to hold Network Solutions responsible for his inability to obtain a previously registered domain name, birthdayballons.com.
"Watts alleges that NSI, by failing to stop the alleged 'cybersquatting,' has violated the federal Sherman [antitrust] Act and Lanham [trademark dilution] Act, and the common law of unfair competition," Hamilton wrote in a decision handed down 7 May.
"... The pleadings and the undisputed facts show, however, that Watts has no viable claims for relief against NSI, which plays the role of neutral stakeholder," Hamilton wrote. "If Watts is correct about the facts, he might have a viable claim for trademark violation against Steve Schwab, the person who first registered "birthdayballons.com" with NSI."
Watts, of Green Forks, Indiana, challenged Network Solutions' first-come, first-served domain name registration policy.
"In his opinion, the judge recognized that Network Solutions is immune from antitrust liability for its domain name registration services," NSI said in its announcement of the decision.
"I don't think that is the issue that is the subject of the [Department of Justice's] antitrust inquiry," said Sally M. Abel, chair of the trademark and partner of the intellectual property group at Fenwick & West LLP, a law firm serving high-technology clients.
The Justice Department investigation is trying to determine whether Network Solutions has violated US antitrust law by claiming sole ownership of the "Whois" database of Internet names and addresses.
"The issue [in the Justice Department inquiry] is more whether NSI undertook efforts to block its competitors from entering the registry business, which is a completely different question over whether NSI has some obligation to be the trademark police," Abel said.
NSI spokeswoman Cheryl Regan took the narrow view.
"[Antitrust violations were] what was alleged, and that was what was dismissed," said Regan.
