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    Lawsuits and Judicial Decisions Core Issue Remains As VeriSign vs. ICANN Moves to State Court
    posted by Mueller on Sunday August 29 2004, @05:18PM

    Steven Forrest writes "No news stories have been published online yet, but the federal judge handling the lawsuit VeriSign filed against ICANN has dismissed VeriSign's anti-trust claims, which means the federal court has no jurisdiction in the case as all of the rest of the claims are not federal claims. What's next? You can expect VeriSign to immediately file its lawsuit in a California state court.

    VeriSign issued a brief statement from Tom Galvin, the company's vice president for government relations. Galvin: "What this means is the case will be heard in a California state court. And while the venue will change, our objective to gain clarity regarding ICANN's appropriate role and the process for the introduction of new services does not. 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."

    In other words, not much has changed. ICANN's lawyers have managed to win a round and delay the day when a judge will rule on whether their actions toward VeriSign in the case of Site Finder, the Wait-Listing Service and ConsoliDate breached their contract with VeriSign or not. But that day will come.

    In fact, today's decision frees VeriSign from the rather large burden of having to prove ICANN's actions violated federal anti-trust law. That makes the task of VeriSign's attorneys - proving Site Finder, the WLS and ConsoliDate were not subject to the provisions of the contract - a little easier.

    Interesting aside: ICANN rapidly posted the PDF file of today's court ruling on its comprehensive litigation index , but as of today has still not posted copies of five motions VeriSign filed in the case in late July. ICANN can move fast - but only when it wants to.

    UPDATE: eWeek.com is first with coverage, with this report .

    eWeek: While VeriSign plans its next moves, it has largely lost its ability to challenge the scope and structure of ICANN's 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 ICANN's 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.

    eWeek is right on the facts, wrong on the analysis. This is not a huge change because the case has always been a contract dispute at its core. That's why ICANN has resorted to imaginative rhetorical gymnastics to seek a dismissal of the non-antitrust claims. The federal judge declined to rule on ICANN's odd assertion that the case -should be dismissed on grounds that VeriSign had no right to sue ICANN for breach of contract over its actions related to Site Finder, etc., because VeriSign doesn't believe those services are covered by the contract.

    ICANN said in a legal filing :
    VeriSign alleges that the proposed "services" it has sought to offer are not the subject of the Registry Agreement. Yet, the basis for VeriSign's second, third, fifth, and sixth claims is that ICANN's conduct with respect to those proposed services constitutes a breach of the Registry Agreement. This makes no sense: if these services are not "subject to" the Registry Agreement, then ICANN cannot have breached the agreement by articulating positions regarding the services. Either VeriSign's actions are properly the subject of the Registry Agreement (which ICANN contends), or they are not.

    As I have written before ( here , here and here ), ICANN's argument sounds good, until you take a second to really think about it.

    The lawsuit is, essentially, a dispute over whether or not Site Finder and other services blocked or impeded by ICANN are covered by the contract between ICANN and VeriSign or not.

    If you apply the circular logic of ICANN's argument against the non-anti-trust claims, ICANN seems to be saying that all VeriSign had to do was ignore ICANN if the various services - Site Finder, ConsoliDate and the WLS - weren't Registry Services. But when VeriSign tried to do that - by launching Site Finder without slow-walking it through ICANN's interminably long review process, ICANN responded by exerting pressure on VeriSign to drop Site Finder. ICANN even backed up its pressure with the not-very-veiled threat that VeriSign might lose the .net registry when that agreement comes up for renewal.

    VeriSign asserts that Site Finder and the other services are not "Registry Services" that ICANN contractually has authority over, but that ICANN wrongly asserted authority over them anyway. It's rather simple:

    1. If the services are not, in fact, Registry Services, ICANN had no right to force VeriSign to delay or suspend them.
    2. ICANN admits it indeed did take action to cause VeriSign to delay or suspend them. It "challenged" those services.
    3. If the services are not, in fact, Registry Services, ICANN indeed did overstep its contractual bounds.

    A California state court now will have to decide whether ConsoliDate, the WLS and Site Finder were, in fact, Registry Services under the terms laid out in ICANN's contract with VeriSign. That - not the anti-trust claims - were always the core of VeriSign's lawsuit - and neither ICANN's legal doublespeak nor its victory over the anti-trust claim does anything to change that.

    VeriSign's battle for the freedom to innovate is simply moving to a new venue."

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      Related Links  
    · CORE
    · VeriSign/NSI
    · ICANN
    · litigation index
    · this report
    · legal filing
    · here
    · here
    · here
    · Steven Forrest
    · dismissed
    · More Lawsuits and Judicial Decisions stories
    · Also by Mueller
    This discussion has been archived. No new comments can be posted.
    Core Issue Remains As VeriSign vs. ICANN Moves to State Court | Log in/Create an Account | Top | 6 comments | Search Discussion
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    Freedom to Abuse
    by GeorgeK on Sunday August 29 2004, @05:51PM (#14077)
    User #3191 Info | http://www.kirikos.com/
    VeriSign seeks Freedom to Abuse its monopoly, not Freedom to Innovate.

    I'm glad to see that GoDaddy's Recall VeriSign [recallverisign.com] petition is back online, recently passing the 20,000 signature level. This is even more than the Stop VeriSign DNS Abuse [whois.sc] petition, which is slightly below 20,000 signatures. Combining the two, that's a lot of opposition to VeriSign's abusive intentions and behaviour.
    [ Reply to This | Parent ]
    by TFBW on Sunday August 29 2004, @06:19PM (#14078)
    User #3864 Info
    In fact, today's decision frees VeriSign from the rather large burden of having to prove ICANN's actions violated federal anti-trust law.

    Maybe I don't understand this lawsuit or the legal process, but isn't the "burden" that you mention one that VeriSign brought upon itself? From my (admittedly naive) perspective, it looks like VeriSign was throwing as many accusations at ICANN as possible, and seeing how many would stick. This is just an instance of a legal claim that didn't pass the laugh test; making it sound like a good thing for VeriSign smacks of spin-doctoring.

    [ Reply to This | Parent ]
    by sforrest on Monday August 30 2004, @02:29AM (#14079)
    User #3986 Info

    Read the rest of this comment...

    [ Reply to This | Parent ]
    VeriSign's next move...
    by sforrest on Monday August 30 2004, @02:32AM (#14080)
    User #3986 Info
    The lawsuit actually isn't the big story - VeriSign now is accusing ICANN of prejudice in its .net registry operator selection process. Details here [free2innovate.net].
    [ Reply to This | Parent ]
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