- Network Solutions - the Internet's biggest domain name
registrar and the owner of the .com domain - has heralded the end of the
Internet in court filings to the Californian Supreme Court.
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- It warns that if a forthcoming decision by the court
goes the wrong way it "would cripple the Internet and jeopardize the
national economic benefit for e-commerce". It would also "threaten
all Internet registrars' survival".
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- The astonishing revelations feature in a 14-page submission
sent to the Supreme Court on 23 January and regard the on-going legal dispute
with Gary Kremen, owner of the domain Sex.com.
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- What is this decision that threatens to wipe out the
Internet in one fell swoop? It is whether Network Solutions (NSI) can be
held accountable for wrongly handing over ownership of the extremely lucrative
Sex.com domain to a Michael Cohen after he sent a faked fax to the company's
headquarters - in 1995.
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- The fax claimed Mr Kremen had been fired from the company
listed as the owner of the domain and that that owner, Online Classifieds
(OCI), was handing over ownership of the domain to a Michael Cohen. It
was signed by a Sharon Dimmick, the apparent president of OCI, and gave
final authorisation of the move to, er, Michael Cohen.
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- Unfortunately, NSI didn't attempt to check whether this
information was true, didn't contact Mr Kremen and duly signed over the
domain rights to Mr Cohen. After a five-year court battle, Mr Kremen won
back the domain in April 2001 and was rewarded $65 million in compensation
from Mr Cohen. Mr Cohen promptly moved his assets offshore, left the country
and remains at large.
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- The issue of whether NSI can be held accountable remains
outstanding however. If it loses, it faces a $100 million claim. Not underestimating
its own importance, this claim would put the entire Internet at risk, the
NSI says.
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- Simply a legal tangent
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- However the court filing in which this doomsday scenario
is played out is merely an adjunct to the main legal process of whether
NSI is responsible. On 16 January this year, the Ninth US Circuit of Appeals
asked the Supreme Court to intervene and decide on the technical point:
"Is an Internet domain name within the scope of property subject to
the tort of conversion?"
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- Put simply: Can anyone actually ever "own"
a domain name? Incredibly, the NSI feels confident enough to tell the Court
of Appeals in its submission that its question is "inaccurate"
due to its "shorthanding" of the domain name question. It clearly
doesn't understand the domain name system as well as NSI does.
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- Instead, it suggests the question be restated to ask
whether the law of tort (civil wrong or injury in which compensation can
be claimed) can be applied not to a domain name but to "Internet domain
name registration services". How the Ninth US Circuit of Appeals managed
to miss this distinction is anyone's guess.
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- If this improvement on the basic question is made, NSI
is happy for the Supreme Court to consider the question.
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- On the other hand however, Gary Kremen has asked the
court to refuse to consider either the Court of Appeals question or the
NSI's amended question. Mr Kremen argues that the basis for such a referral
to the Supreme Court - namely, that the question is unsettled in law and
of intense public importance - does not apply in this case.
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- He argues that the question has already been answered
in law many times (and list legal cases to back this up), and that due
to a change in domain name contracts years ago, any resulting legal decision
is unlikely to apply directly to anyone else ever again (a point acknowledged
by NSI).
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- Kremen also argues that answering the question would
not end or even resolve the overall legal action against NSI, since he
is also suing it for breach of contract, third party beneficiary and bailment.
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- Instead, it will only "result in unavoidable and
highly prejudicial delay in litigation that has already gone on for almost
five years". Mr Kremen has not been able to extract the $65 million
compensation he was awarded from Mr Cohen, which he admits has put him
in an unenviable financial position. The NSI "remains the primary
source for compensating Kremen's losses", his submission states.
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- Legal argument
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- Considering the NSI believes the decision may force the
end of the Internet and have "enormous ramifications for a large sector
of similar service providers, including cable television service and telephone
service providers", it is a shame its legal arguments aren't stronger.
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- Kremen argues that to dismiss Internet domains as intangible
properties which cannot be treated with normal property laws would ignore
the law regarding shares, bonds, recorded performances and e-tickets and
also make their theft an unpunishable crime.
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- He argues that the computer database which lists all
domain names (the DNS) is a document equally as valid as a printed document
despite it being held electronically. Otherwise, he points out, merely
hitting a print button for the list would cause a major shift in law.
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- In response, the NSI relies upon its own definition of
domains (after all, it was the company that first issued them) as being
impossible to own. All someone who registers a domain gets in return for
their money is "the right to continued registration services for a
period of time" - a point that is becoming more difficult to justify
legally as the Internet becomes subject to wider laws.
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- Instead, "one 'owns' the domain name registration
in the same way that a person 'owns' a telephone number", NSI says,
perhaps overlooking the fact that domain names are sold and exist freely
on top of a system of "telephone numbers" - IP addresses.
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- As for legal argument, the NSI turns instead to examples
regarding goodwill, industry secrets and leasehold contracts, and indirect
legal decisions ("If Payne had ruled that all intangible personal
property interests could be converted, then Goldschmidt could not have
reached this result" [our emphasis], argues one point).
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- And the result?
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- The decision on whether to make a decision will most
likely take a year. If the Supreme Court does decide to take it on, it
could be expected to take a further four years for the case to be finally
decided - a mere 10 years after it was first brought.
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- But while you would think that this decision has far-reaching
implications, both Kremen and NSI say that this is unlikely to happen since
the NSI changed it contracts years ago (while it was still the sole seller
of Internet domain names) to write itself even further out of legal liability
for any domains it sells or looks after.
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- Ironically, however, NSI warns that such a decision could
spark calls for legal changes in the domain name system. "Cases like
this one will surely encourage attacks on the validity of any contractual
liability limitation NSI or other registrars may have," it warns in
the submission.
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- This could happen in such terrible cases as those "affecting
public interest" or "those regarding gross negligence or willful
wrongs by common carriers".
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- God forbid that the people that are paid to effect the
transfer of an individual's property are sued because they knowingly fail
to do so. If this became the case, the NSI explains, "the cost of
[registering domain names], currently ranging from $7 to $25 annually,
would become unacceptably high".
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- Presumably, it is at this point that the Internet falls
apart. Or, if you were to look at it from a different angle, it is at this
point that the Internet finally becomes a global, autonomous entity of
its own making, uncontrollable by parties with huge and irreconcilable
conflicts of interest.
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- But that's for the Supreme Court to decide.
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- http://www.theregister.co.uk/content/6/29152.html
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