In a decision that went largely unnoticed in the press, the Virginia Supreme Court ruled 7-2 last month that a domain name "is the product of a contract for services," and not a type of property that a Web site owns.
The majority opinion reversed a March 1999 circuit court ruling. The Supreme Court said the lower court erred when it concluded that "Internet domain names are a new form of intellectual property."
Network Solutions' (NSI) latest service agreement--version 5.0, which was posted at NSI's site in November 1999--gives the company sweeping rights. The agreement states:
NSI may terminate "domain name registration services" if the registrant uses them for "any improper purpose, as determined in our sole discretion." The term "improper" is left open for NSI to interpret.
NSI may "revise the terms and conditions of this agreement...at any time." Any changes become "effective immediately upon posting of the revised agreement" at the NSI Web site. NSI is not required to send registrants email about the changes.
Domain name holders who registered their names under older contracts become bound to the new conditions automatically when they renew their names with NSI for another one-year term.
NSI's contract is unusual, as some other domain name registrars, who launched competing services beginning in June 1999, don't require such concessions.
"There isn't a model for everybody" to base agreements on, says Pam Brewster, spokeswoman for the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN, which accredits registrars, imposes a standard dispute resolution policy but not a particular domain name agreement.
As a result, legal conditions include whatever registrars choose. For a layperson, analyzing all the contracts out there can be as appealing as surfing the Web blindfolded.
To cut through the legal thicket, an intriguing site called the Domain Name Buyers' Guide on April 21 posted its first rankings of registrars.
The guide is run by Chris Truax, a San Diego attorney in private practice, and Jan Metzger, a management consultant living in Brighton, England. Truax is best known for successfully representing a Swiss artists' site, etoy.com. The site was blocked by NSI for weeks after a trademark infringement lawsuit was filed in 1999 by e-tailer eToys.com.
The Buyers' Guide explains that it's relatively easy to wave goodbye to one registrar and transfer your domain name to another.
"I have a feeling there will be quite a lot of people leaving as they find out about these agreements," Metzger said.
The authors, in consultation with other legal minds, grant registrars' agreements a maximum of five stars. NSI's contract earns it a rating of a whopping one star.
Three registrars currently enjoy a perfect five-star legal rating. Contracts with these companies tend to favor consumers. For example, a Paris-based registrar named Gandi.net states clearly in its agreement: "The client owns the registered domain name." Also, the firm can't change its contracts at will, except for fee changes.
By contrast, Phil Sbarbaro, NSI's legal counsel, offered a parallel to summarize prevailing law: "You don't own a domain name any more than you own your phone number." He said Truax "has a certain slant to his positions" that hurts NSI's rating, mentioning Truax's defense of etoy.com.
Truax is known for feeling that NSI took too long after a settlement was signed to undo its blocking of etoy.com's domain name. But he said this doesn't affect the guide's ratings, which are strictly based on the wording in each registrar's contracts. He added that the guide's contributors never accept anything of value from any registrars.
The bottom line? People who thought they "owned" their domain names had better read their agreements now--before a judge does it for them.
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