Following the reasoning of courts in at least three similar cases, a federal judge in Indianapolis, dismissed antitrust claims filed against NSI, which until recently had sole authority to register Internet addresses ending in ".com".
Noting a cooperative agreement between the Herndon, Virginia, registrar and the Commerce Department, U.S. District Judge David Hamilton ruled that immunity provisions in antitrust laws clearly applied to "private entities acting pursuant to agreements with such federal agencies."
The judge went on to dismiss trademark dilution and infringement charges against NSI as well, holding that the company was a "neutral stakeholder" in a dispute between two parties competing for the same domain name. Hamilton ordered the plaintiff, an Indiana man named Bruce Watts who claimed he was the rightful owner of the name "birthdayballoons.com," to pay NSI's legal bills.
The ruling is another clear victory for NSI, whose role as the exclusive gatekeeper to the most popular type of domains has been repeatedly challenged in court.
"It recognizes other court decisions that have already been made recognizing that NSI is a neutral party," said Cheryl Regan, an NSI spokeswoman. She added that the decision also affirmed NSI's registration policies, such as its practice of giving out a domain name to the first party who asks for it.
The battle, however, is far from over. Lawyers met in court today to discuss ground rules for the appeal of a similar ruling issued in March. Glenn Manishin, an attorney from Blumenfeld & Cohen representing PGMedia, said the ruling is vulnerable on a number of fronts.
"We expect that the court of appeals will look at this without being swayed by the Department of Commerce and their efforts to paint NSI's restraint of trade as part of a governmentally managed" plan, Manishin said in an interview. In addition to deciding whether NSI is subject to antitrust laws, the case, being heard by a panel of the U.S. Court of Appeals for the Second Circuit, will decide whether domain names are considered speech, in an effort to decide whether they enjoy constitutional protections. Arguments are expected to take place in August.
The Justice Department is also investigating NSI's control of the databases used to route Internet traffic for possible antitrust violations.
Under a plan being implemented by the nonprofit Internet Corporation for Assigned Names and Numbers, new companies are coming on board to register domain names ending with ".com," ".org," and ".net," which account for 50 percent to 75 percent of the world's Internet addresses. Even with the introduction of competition, however, NSI is still responsible for providing crucial day-to-day maintenance of the Net's domain name system.