Court Dismisses VeriSigns Case Against ICANN

Knocked out of federal court with the rejection of its antitrust claim, VeriSign vows to take its fight against the domain-naming overseer to state court.

A federal judge on Thursday dismissed VeriSigns antitrust lawsuit challenging the authority of the Internets main oversight body.

The judge ruled that VeriSign Inc. could not prove its core antitrust claim against the Internet Corporation for Assigned Names and Numbers, dismissing outright the antitrust allegation and declining to rule on the validity of the six remaining claims.

The decision ends VeriSigns federal case since it required the antitrust claim, but leaves the company with the option to file in state court, legal experts said. VeriSign officials said the company would immediately file a new lawsuit in California state court.

The federal suit, filed in February in U.S. District Court for the Central District of California, accused ICANN of overstepping its authority as a technical body to become a "de facto" regulator of the domain-name system by blocking services that VeriSign sought to offer.

VeriSign manages the Internets leading domains, .com and .net. Among the services in dispute is SiteFinder, a service that had redirected users entering misspelled or unregistered domain names to a VeriSign-run search site. VeriSign suspended SiteFinder in October following pressure from ICANN.

ICANN, based in Marina Del Rey, Calif., welcomed the lawsuits dismissal and criticized VeriSign for bringing an antitrust case in the first place.

"There is no better result we could have had from this hearing," said ICANN general counsel John Jeffrey. "Its unfortunate that VeriSign is testing an antitrust theory at the expense of the participants in the ICANN process. At the end of the day, its the people who create the budget for ICANN that are paying this bill."

Last month, VeriSign amended its federal complaint after an earlier dismissal of its antitrust claim.

VeriSign, of Mountain View, Calif., vowed to continue its fight and reiterated that legal action was necessary because of ICANNs actions to block its introduction of registry services.

"While the venue will change, our objective to gain clarity regarding ICANNs appropriate role and the process for the introduction of new services does not," Tom Galvin, VeriSign vice president of government affairs, said in a statement. "We look forward to making our case in court so VeriSign and many other companies can get the clarity needed to run our businesses effectively."

While VeriSign plans its next moves, it has largely lost its ability to challenge the scope and structure of ICANNs authority without the antitrust claim, said Anthony Malutta, an intellectual property and domain name attorney at Townsend and Townsend and Crew LLP, based in San Francisco.

In state court, the case would become a contractual dispute between VeriSign and ICANN rather than a question of ICANNs broader role in the domain-name system, he said. As a registry, VeriSign has an agreement with ICANN to run the core databases for names in the .com and .net domains.

In the federal lawsuit, VeriSign sought temporary and permanent injunctions to prevent ICANN from interfering with any reintroduction of SiteFinder or the launch of other services and sought unspecified damages.

"An antitrust judgment against ICANN could have a far greater reach and impact the entire industry, while in state court, its between the [two] parties," Malutta said.

The legal squabbles are the latest in a series of arguments between VeriSign and ICANN. Both have continued to issue conflicting reports about SiteFinder. An ICANN advisory committee in July condemned SiteFinder and called for its permanent end. And earlier this month, VeriSign issued its own report, here in PDF form, disputing the committees findings and defending its service.

Along with SiteFinder, VeriSign is disputing ICANNs role in other services, including one for backordering domain names. Called the wait listing service, it was approved in March by ICANNs board of directors and has led to a separate lawsuit against ICANN and VeriSign from a group of registrars wanting to block it.


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