NSI May Be Legally Liable For Alleged Front Running

Ari Goldberger over at the Direct Navigation Blog picked up on a story on DomainState.com and on DomainNameNews.com that once again suggests that people searching for domain availability at certain registrars are being registered by the registrar.  The registrar thereby prevents a registrant from purchasing it at any other registrar other than the Registrar whose web site was used to check domain availability. This, from our point of view, amounts to fraud and domain theft at the registrar level and has earned the term domain "Front Running" a term picked up from illegal stock broker practices using the same model. Domain Name Front Running (DNFR) is believed to be caused when registrars or ISPs sell domain availability search traffic that runs through their network to front runners, who register the domain before the consumer is able to complete registration.  The DNFR then tries to sell the domain to the original availability searcher, or to another third party. 

Frank Schilling posted an excellent article on the history of domain tasting, a related practice, titled The Closing Window: A Historical Analysis of Domain Tasting which is an excellent overview of these types of problems and how they occur.

Network Solutions (NSI) has now been accused of front running domains, a shocking accusation given NSI's domain industry leader status.

No one has challenged domain Front Running by registrars in the courts, likely because the practice is new and since the loss of a single domain would  not typically generate a level of damages to support litigation. But litigation over this fraudulent domain practice by registrars is both viable and likely inevitable as noted below. While NSI's explanation -- below -- may be legitimate, there is little doubt that some registrars are engaging in front running practices.

Cybersquatting, Trademark and Domain Name Dispute Attorneys: Protecting Domain Assets.

Attorneys specializing in cybersquatting, trademark and domain monetization matters.

Managing Partner Enrico Schaefer: "Traverse Legal's attorneys represents domainers like you in portfolio protection matters, trademark infringement threat letters and litigation.    We know cybersquatting and trademark law and pride ourselves on advanced litigation techniques which are both cost-effective and budget oriented.  We also handle a large volume of complex litigation under both the Lanham Act, UDRP and the Anti-Cybersquatting Protection Act.  Because we are a boutique litigation law firm, we know how to strategically and efficiently accomplish our client's goals."

If you are dealing with a domain name dispute based on trademark rights or wish us to analyze your domain portfolio for trademark issues,  you may contact one of our domain name attorneys for a free evaluation or call 866.936.7447 (International Toll Free).

Domain name disputes are becoming more common all the time. Some cybersquatting and trademark infringement allegations against domain owners are legitimate.  Some are not. If you have received a cybersquatting threat letter demanding that you turn over your domain name to a third party or been named as a Respondent in an ACPA or UDRP/ICANN proceeding, you need the help of an experienced domain dispute attorney.  High value domain names and domain name porfolios need to be protected.  We can help protect your valuable domain assets.

Registerfly Update From ICANN

The ICANN Blog has reported the following information concerning the Registerfly problems.

Q. If ICANN terminated Registerfly's accreditation agreement on 31 March, why do they still claim to be accredited?

A. Registerfly decided to file an arbitration action to stall the termination. For better or worse, this is their right under the accreditation agreement. The accreditation agreement is a contract that ICANN has to follow. If we didn't follow the agreement, Registerfly could potentially continue operations as an accredited registrar indefinitely. So please be patient and understand that we are doing everything we legally can to protect registrants without jeopardizing our right to terminate Registerfly' accreditation.

Q. What will happen when Registerfly's accreditation is finally terminated?

A. There are a number of paths we could pursue, and to some extent, the one we follow will depend on the behavior of Registerfly. In the 'big picture' the process looks like this: (1) Registerfly loses its access to the registries; (2) a competent and qualified accredited registrar is selected by ICANN to receive a 'bulk transfer' of names (and underlying data) from Registerfly to it; (3) former Registerfly customers will be able to contact the new registrar to manage or transfer their names.

Q. How does the bulk transfer work?

A. ICANN has the power to approve a bulk transfer from one registrar to another. We will not do so unless the transfer is in the community interest. We have told Kevin Medina he should name a "gaining registrar" now and stop hurting his customers, but he has not done so. If Kevin does name a gaining registrar, we will only approve the transfer if it is in the community interest.

In a bulk transfer, there is no fee to the customer. However, a bulk transfer is different from a normal transfer in that it does not add a year to the registration.

Q. Why doesn't ICANN bulk transfer the names now?

A. Like it or not, Registerfly is still technically accredited, pending the outcome of our lawsuit against them or their arbitration action. Because Registerfly is accredited, we cannot initiate a bulk transfer. When Registerfly's termination is final, we will bulk transfer the names, either to a registrar suggested by Kevin Medina or one chosen by ICANN.

Q. What is the status of names that were deleted by Registerfly that are currently in RGP (redemption grace period) or PendingDelete?

A. The registries have agreed not to "drop" names that are deleted by Registerfly. In other words, the names will not be permanently deleted. Today, Registerfly could technically allow its customers to redeem names in RGP, but given its history of not being able to fund the registries, it doesn't seem like that's going to happen. (There has to be money in Registerfly's registry accounts in order to process transactions.)

Since Registerfly has failed in its obligations to its customers, we are continuing our discussions with the registries and others to ensure that customers will be able to regain control of their domain names. Unfortunately, unless Registerfly begins funding its registry accounts in earnest, we may not be able to make that happen until their accreditation agreement is finally terminated.

Q. What if my name was deleted before the registries began prohibiting deletions by Registerfly?

A. If the name is available for registration, by all means, register it.

If the name was registered by someone else, you have at least four options:

1. Work out an agreement with the current registrant.

2. Wait and see if the current registrant lets it expire.

3. File a lawsuit in court against the current registrant.

4. For cases involving "abusive registrations" (this is a narrow category, so you should proceed with caution), begin an administrative proceeding under the Uniform Domain-Name Dispute-Resolution Policy. For more details on this option, see Uniform Domain-Name Dispute-Resolution Policy Here.

If you decide to file a complaint under the UDRP, you'll need to do so via one of ICANN's four approved domain-name dispute-resolution service providers:

• Asian Domain Name Dispute Resolution Centre [ADNDRC]
• The National Arbitration Forum [NAF]
• World Intellectual Property Organization [WIPO]

(Please note that the answer above applies only to domain names in .com, .net, .org, or other generic Top Level Domains operated under contract with ICANN such as .biz, .info or .name. Dispute resolution policies vary in other TLDs such as .gov, .edu, or .us and the 240+ other country code Top Level Domains. Please note also that ICANN generally recommends seeking legal advice before deciding which of the above alternatives is best in any particular situation.)

RegisterFly Update By ICANN

If you are a victim of the Registerfly meltdown and your domain names are currently at risk, you should contact one of our domain name lawyers by emailing us here. Or you can retain Traverse Legal now by clicking here.  We can assist you in obtaining control of your domain names.

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If you’ve been bitten by the RegisterFly bug, there is a gripe site which has become the source of information about longstanding registerfly problems found at Registerflies.com

 

ICANN provides the following update:

• As is already known on 21 February 2007, ICANN issued a letter to RegisterFly [PDF, 101K] indicating a Notice of Breach of its Registrar Accreditation Agreement (RAA) and demanding that RegisterFly act within 15 working days to cure the breaches outlined in the letter.

• Also on 21 February, ICANN sent a Notice of Audit [PDF, 60K] that required RegisterFly to allow ICANN to inspect and copy records as well as a notice to submit data to ICANN or a reputable escrow agent regarding registration applications and Registered name holders.

• On 27 February 2007, ICANN sent two employees to RegisterFly offices in New Jersey to audit them and obtain the registrant information.

• RegisterFly has not complied. On 1 March 2007 RegisterFly's lawyers forwarded a letter [PDF, 12K] to ICANN advising that refusal to comply with ICANN's request "should not be construed as my client's unwillingness to cooperate with ICANN but as evidence of their continuing efforts to service their customers."

• In response ICANN has issued a second letter [PDF, 288K] dated 2 March 2007 setting out additional breaches of the Registrar Agreement. In that letter ICANN describes RegisterFly's statement that refusal to comply is evidence of customer service as "preposterous."

• RegisterFly's continuing breaches of the RAA are serious and will be pursued.

• ICANN's primary concern is to do what it can to protect registrant and related data.

• ICANN has provided notice that it will file a suit against RegisterFly in the United States District Court for the Central District of California seeking a temporary restraining order (TRO) requiring RegisterFly to turn over the data requested and to compel an emergency audit of its books and records.

• In addition to this legal action, ICANN today convened a telephone conference among those needed to implement a plan that will help cease unintended deletions. The participants were registries holding RegisterFly names: Afilias (.info), NeuStar (.biz), VeriSign (.com, .net), RegisterFly backend services provider Tucows and eNom (for which RegisterFly was a reseller) as well as representatives of RegisterFly.

• The Registries involved have agreed to move any RegisterFly names in Redemption Grace Period* status into Server-Delete-Prohibited status. This will prevent them from being deleted from the registry and becoming available for re-registration by others. ICANN commends and encourages this example of cooperation to protect registrant data.

ICANN will provide further updates as new information is available and action taken.

Media Contacts:

Paul Levins
  Executive Officer and Vice President
  Corporate Affairs
  ICANN  
  Ph: +1 310 301 5804
  E:  paul.levins@icann.org

International
  Andrew Robertson, Edelman ( London)
  Ph: +44 7921 588 770
  E: andrew.robertson@edelman.com

* (Registration Grace Period is a period that allows the domain-name registrant, registrar, or registry operator time to detect and correct any mistaken deletions. During the grace period, the deleted name will be placed on REGISTRY-HOLD, which will prevent the name from functioning/resolving. This tends to call attention to the impending deletion).

If you are a victim of the Registerfly meltdown and your domain names are currently at risk, you should contact one of our domain name lawyers by emailing us here. Or you can retain Traverse Legal now by clicking here.  We can assist you in obtaining control of your domain names.

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RegisterFly Meltdown

If you are a victim of the Registerfly meltdown and your domain names are currently at risk, you should contact one of our domain name lawyers by emailing us here. Or you can retain Traverse Legal now by clicking here.  We can assist you in obtaining control of your domain names. 

[Form Registerflies.com]:  By now you may have received the formal notice to owners of domains which have been registered by eNom via its reseller, RegisterFly.com. Although you purchased your name at RegisterFly, eNom is the actual registrar of record for your domains.

As an eNom reseller, RegisterFly was contractually bound to adhere to certain standards of customer service in a speedy and diligent manner. Effective March 9th, RegisterFly will be terminated as an eNom reseller.

The Domain Tools Blog has reported this update from ICANN:

ICANN has posted a public update on the RegisterFly situation we reported about earlier and it doesn’t look good. On February 21st, 2007, ICANN issued a letter to RegisterFly [PDF, 101K] indicating a Notice of Breach of its Registrar Accreditation Agreement (RAA) and demanding that RegisterFly act within 15 working days to cure the breaches outlined in the letter. Also on February 21st, ICANN sent a Notice of Audit [PDF, 60K] that required RegisterFly to allow ICANN to inspect and copy its records. In addition they were given notice to submit data to ICANN or a reputable escrow agent regarding registration applications and Registered name holders. Five days later on February 27th, 2007, ICANN sent two employees to RegisterFly’s offices in New Jersey to audit them and obtain the registrant information. RegisterFly did not compile and refused to give ICANN the Information. Two days later on March 1st, 2007 RegisterFly’s lawyers forwarded a letter [PDF, 12K] to ICANN advising that refusal to comply with ICANN’s request “should not be construed as my client’s unwillingness to cooperate with ICANN but as evidence of their continuing efforts to service their customers.” In response ICANN has issued a second letter [PDF, 288K] dated March 2nd, 2007 setting out additional breaches of the Registrar Agreement and in that letter ICANN describes RegisterFly’s refusal to comply which was based on their “continuing efforts to service their customers” as “preposterous“. 

Here is a copy of the February 21, 2007 Download ICANN's notice of breach letter putting Registerfly's accreditation at risk. If Registerfly loses accreditation, it will no longer be able to sell or resell domain name registrations.

If you’ve been bitten by the RegisterFly bug, there is a gripe site which has become the source of information about longstanding registerfly problems found at Registerflies.com

For those domain registrants with sufficient money at stake because of the number of domains they have registered or the value of their domains, there are legal remedies available.  Initially, a lawsuit against Registerfly for emergency declaratory and injunctive relief is critical.  A court order must be obtained immediately precluding the domain from being transferred to a new owner.   If the domain is lost to an innocent third party, recovery of the domain may still be possible.  Contact a domain name attorney if you have any further questions. 

ICANN Accredited RegisterFly Implodes

If you are a victim of the Registerfly meltdown and your domain names are currently at risk, you should contact one of our domain name lawyers by emailing us here. Or you can retain Traverse Legal now by clicking here.  We can assist you in obtaining control of your domain names.

Internet consumers are in an uproar over what appears to be an ICANN accredited registrar named RegisterFly which is heading for self-destruction.  The domain tools blog has posted about the serious problems facing RegisterFly here. 

There is concern from people who have used “private” registration may not be able to retrieve their domain names if RegisterFly goes down.  Typically, you must show identification such as driver’s license with your photo in order to retrieve your domain name as a registrant if, for instances, you lose your password.  If something should happen to RegisterFly, the fact that your registration is private won’t allow you to easily prove that you are the domain owner.  On Monday, RegisterFly’s website went dark for most of the day as CEO, Kevin Medina, changed the root password and locked everyone out.  Vice President, John Naruscewicz, had been feuding and there is already been litigation between the two. 

ICANN states it does not have any power to manage the situation, except to pull the accreditation of RegisterFly completely.  ICANN has reported that 70% of the complaints they have received in the last two weeks concerned RegisterFly.  If RegisterFly loses its accreditation, they will lose their customers and ICANN is expected to make an announcement about this later in the week.

Here are some more links to information concerning the RegisterFly debacle:

If you’ve been bitten by the RegisterFly bug, there is a gripe site which has become the source of information about longstanding registerfly problems found at Registerflies.com

• Brawling RegisterFly partners in fight to the death, Malaysia Sun, February 24, 2007.

• RegisterFly faces losing ICANN accreditation. See it here.

• ICANN may act against RegisterFly; Slashdot, February 23, 2007.

• RegisterFly.com in big trouble, read about it here.

If you are a victim of the Registerfly meltdown and your domain names are currently at risk, you should contact one of our domain name lawyers by emailing us here. Or you can retain Traverse Legal now by clicking here.  We can assist you in obtaining control of your domain names.