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NSI's liability in trademark disputes reduced

A federal judge lets Network Solutions off the hook for trademark infringement by third parties in most cases, reversing an earlier ruling requiring the registrar to screen all domain name applications.

A federal judge has let Network Solutions off the hook for trademark infringement by third parties in most cases, reversing an earlier ruling requiring the registrar to screen all domain name applications to make sure they did not violate the rights of a trademark holder.

Even so, NSI still is required to screen every application See Don Telage Newsmaker submitted by Artinternet, the defendant in the case. The French organization, according to court records, admitted its registration of infringed on another company's trademark rights.

The ruling by U.S. District Judge Bruce Kauffman of Philadelphia, handed down yesterday, is believed to be the first to hold the Herndon, Virginia, company responsible for trademark infringement by a third party.

The case demonstrates the difficult balancing act courts face in enforcing competing rights in the registration of domain names. Plaintiff Worldsport Networks argued that NSI played a key role in Artinternet's infringement of the "Worldsport" trademark and that the registrar should be required to prevent other companies from doing so in the future. NSI, meanwhile, said it was a neutral party to the case and should not be put in the position of deciding who is legally entitled to a domain name.

Judge Kauffman took the middle road, saying that in an earlier ruling he had gone too far in ordering NSI to screen every application it received for infringement of the "Worldsport" mark. However, Kauffman upheld a separate part of his March 4 ruling requiring NSI to review all requests from Artinternet.

"The March 4, 1999, order...extends to the registration of any domain name similar to plaintiff's mark by any applicant," the judge wrote. "This would place an unreasonable burden on NSI without its consent." The judge went on to note testimony from NSI claiming that it registers about 300,000 domain names per month, or about 1 every 10 seconds.

The modification represents a clear win for NSI, which had intervened in the case to argue that the March ruling "presented significant legal, practical, and public policy concerns." The earlier ruling appeared to be at odds with a 1997 decision in a similar case that held that the mere registering of domain names did not give rise to trademark infringement. NSI spokeswoman Cheryl Regan said the ruling affirmed the company's controversial policy for handling domain name disputes.

NSI generally promises to abide by any court ruling that transfers the ownership of a domain name but has rebuffed efforts to screen future registrations. The company, however, did not oppose Kauffman's order to review Artinternet applications.

In justifying that part of the ruling, Kauffman said Artinternet's admitted infringement was made possible only after NSI agreed to register the "Worldsport" name.

"Thus, NSI, although unwittingly and without culpability, acted in concert with defendants in violating plaintiff's trademark rights," Kauffman wrote. "Therefore, the court possesses the authority to enjoin NSI from aiding defendants in...future violations."