Cybersquatting & Domain Dispute Attorneys / Lawyers: NSI May Be Legally Liable For Alleged Front Running

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01/09/2008

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As an IT manager for a large manufacturing company, I have used NetSol for the past several years for our registrar. I found out yesterday about their new practice as my wife was trying to find an available domain name for their company. She was using NetSol to do the searches. She came home frustrated because the names they wanted were already taken and she was being pushed to come up with one. When she gave me the name they wanted, I found it hard to believe such an odd name was already taken. I did a whois using my personal registrar and found that NetSol had, in my opinion, stolen her company's name and registered it themselves shortly after she searched it. However, we did determine it could be bought through NetSol at an inflated price.
What a bunch of BULL! I could not believe what I once considered a reputable company would stoop to such business practices. I plan to take steps today to move my companies domains to another registrar because I refuse to do business with someone like this. This is unacceptable practice regardless what they think it is. I breezed through the ICANN agreement that registrars much follow to try and find where this was acceptable. I found more clauses that made it unacceptable than acceptable. 3.7.4, I think it was, states that they can not register a domain until they have secured payment. Doesn't this break the agreement? Not to mention a couple more that it may fall under. Then we have the fact that this simply has to be breaking so business laws. Not a lawyer myself, so I guess we need to leave it up to them to find the criminal acts. ICANN certainly doesn't seem to be moving very fast to fix it. My complaint to them did get a response and they were aware of the practice of NetSol. They stated they were investigating it.
NetSol, if you are listening. You really need to cease this practice. Users of NetSol, I think it time for a class action law suit and lets put them out of business!

To gain more of a perspective on the issue, I spoke with Larry Kutscher, CEO of Register.com, a leading domain name registrar, about his views on the matter. Here is what he had to say:

3. Recently, Network Solutions has started registering names that were searched on their website but not purchased. What is your opinion of their actions?

Register.com has serious concern over Network Solutions' recent practice of registering searched but not purchased names via their website. As a registrar, Register.com takes very seriously the need to protect the ideas and domain searches of our customers. If it were to become standard practice that anytime you search for a domain name, the registrar purchases it, the customer loses.

You can be sure that if you search for a domain name on Register.com, we won't use any information that you provide us to take it away from you. In addition, Register.com offers Domain Hold, a service customers can opt into to protect their idea by reserving a domain name for free for up to four days and then only they can come back to us to buy it.

It is a betrayal of the customers trust for Network Solutions to continue this practice. We hope we can put an end to this and focus as an industry on the ways we can help our customers.

4. What is your opinion about the explanation offered for this practice by Network Solutions?

The explanation Network Solutions has offered doesn't ring true. They are not solving any customer problems with their new policy - in fact they are actually creating problems in the industry and ultimately for the customer.

5. In your opinion, does this action by Network Solutions violate any ICANN rules?

The bottom line is this is just not a good business practice and has the potential to hurt the industry and all of our customers. Due to this potential damage and the fact that this practice restricts competition among registrars, we believe that ICANN should immediately review this practice and Register.com has asked ICANN to do so in a formal letter.

6. Do you expect other registrars to do this as well?

I sincerely hope that other registrars will not adopt similar policies. As I commented previously, if it were to become standard practice that anytime you search for a domain name, the registrar purchases it, the customer loses.

"PLAIN AND SIMPLE NETSOL IS IRRITATED that people like me use their search tool and then go to GoDaddy to pay much less for the exact same thing. I for one will transfer all/any of my domains from Netsol that I can to another registrar."

Can one really blame them for someone freeloading a service they're paying the costs for? And that might be a good choice since at least it'll lessen potential headaches you both can bring to one another. :)

Use every trick in the book, use every loop hole till you are found out. A lot of people don't even know what domain names and hosting means. It is quite easy to fool them. That's what is happening here.

http://domainnamewire.com/2008/01/11/tucows-ceo-on-network-solutions-front-running/

Tucows President and CEO Elliot Noss today, and he’s not shy about his position.

“For me this is analogous to the approaches that a couple registrars have taken, such as Godaddy and Network Solutions, for transfer policy,” said Noss, referring to registrars taking initiatives to protect their customers that also benefit their business. Specifically, Noss is referring to those registrars’ practice of blocking transfers of domains within 60 days of changes to whois information. These registrars say they are blocking transfers to protect customers from domain theft, much like Network Solutions claims its new reservation policy protects customers from front running. Front running involves someone intercepting a domain name query and preemptively registering the domain.

“It’s violating the stated policy and then putting the burden on ICANN or other parties to prove that they’re wrong,” continues Noss. Tucows has also blogged about the topic on its official site.

Noss doesn’t believe that Network Solutions’ program is a solution to front running.

Noss said the basic driver to front running is internet service providers (ISPs) selling internet data. Using any site to check for a domain — be it Network Solutions, Tucows, etc. — exposes you to the potential of that query being stolen. When someone visits a web site or sends a request over the internet, that data can be captured by the ISP.

Surprisingly, it’s not just rogue ISPs that sell this data. “The larger [ISPs] are more likely to have this behavior,” says Noss. He points to Verizon capturing error traffic and serving ads on them as an example.

Registrar Register.com offers a service that lets users reserve domains for later registration using the 5 day grace period afforded to registrars. Noss says this may be fair as long as the company is explicit with its customers, and that’s part of the problem with Network Solutions’ practice.

“All of this stuff makes sense to you and me and doesn’t make sense to 99% of the population,” Noss told me. This is a valid point; registrars such as GoDaddy and Network Solutions deal with customers who don’t even know what “drop catching” and “parked page” mean.

I believe what NetSol is doing is purely a response to an internal study that they did to determine the number of domains that were being searched for using their search tool and then registered elsewhere. Not by front runners however, but by everyday users knowing where AND WHERE NOT to register a domain name. I suspect the percentage of defectors was very high.

If Netsol actually gave a *$#@ about customers, instead of choosing to lock up the domains that were searched for in the hopes that people would be confused into registering with them, if they REALLY were focused on customer service, they would have made the temporary lock feature an opt-in feature for customers that are already customers of Network Solutions and wanted to continue to be. Then people could choose.

The percentage of searches that result in domains being registered elsewhere is high simply because:
1. NetSol is an offensively expensive place to buy a domain name
2. NetSol site and admin panel makes it difficult for people to do what they want, quickly and get out feeling that they weren't ripped off
3. NetSol charges extra for features (such as forwarding) that are free at other, less expensive registrars.

Front running is not Network Solutions' concern. PLAIN AND SIMPLE NETSOL IS IRRITATED that people like me use their search tool and then go to GoDaddy to pay much less for the exact same thing. I for one will transfer all/any of my domains from Netsol that I can to another registrar.

A violation of some statutes, as opposed to a claim of damages, may be established solely by proof that an act or practice was capable of being interpreted in a misleading manner or had a tendency to deceive consumers.78 Other statutes require a plaintiff to prove only that there is a likelihood of damage.79 Under these statutes, the plaintiff need not allege that the consumer actually was deceived.80 Finally, under Georgia's Fair Business Practices Act, the plaintiff must prove that the defendant's actions have the potential to harm the public.

There is nothing in the Privacy Policy which puts anyone on notice or authorizes NSI to register domains that are searched through its tools. In fact, their practice appears to be in direct violation of their privacy statement.

It is very difficult to even find the AUP on the NSI web site. There is no direct link off the man pages. You need to navigate deep withing the site map, to legal notices to find the AUP.
http://www.networksolutions.com/legal/legal-notice.jsp

Nothing in the UIP authorizes NSI's actions to lock or register the domains searched through its availability tool.

There has been quite a huff about this over the past couple of days. I have done some research and I too believe frontrunning starts somewhere between a registrar query/dns query and the underlying registry.

Now for what network solutions is doing:

As a business in the mind of protecting their OWN customers, not anybody else this is a great practice. Many of NSI's cx have been with them for years due to great service. If they login to their account and search a domain name netsol is ensuring if they wanted it they CAN get it because NO ONE ELSE is worried about THEIR CX's.


All of the people who are complaining and whining are essentially saying I go to network solutions to use their resources but I will not work with them! Why don't they use their registrar's search tool? Most often it is because sucks!


Thanks for reading,

Nick


http://www.routermods.com

"the advertising dollars generated through their parked page program"

Enrico, they've never input their commercial parking pages on those domain names. Currently they've switched from their "register domain at NS" page to their non-commercial parking page, and their rep stated somewhere they'll soon resolve to nowhere.

Generally registrars really have no idea what's causing this, save for a few speculations with little to no degree of proof to back them up.

Hi,

I am Shashi Bellamkonda from Network Solutions .We have been listening to comments here as well as those on other sites regarding our customer
protection measure. Throughout the launch of this effort we have made, and continue to make, improvements to our protection measure. I want to update you on some of the improvements we are implementing in the near term:

1) We have changed the current webpage to which reserved domain names resolve to a general under construction page. Additionally, all new reserved names after tonight will not resolve to any page at all.
2) This week, we will be making enhancements that will address the concerns related to disclosure of zone file and DNS server information of the reserved names. This should address some of the concerns recently raised.

3) Very soon we will remove our customer protection measure from our WHOIS search page, so that no domains searched on this page will be reserved. We
will continue to reserve, however, domains searched from our homepage.

Thanks for all the feedback and viewpoints.

Shashi

Network Solutions believes the frontrunning problem is occuring somewhere between when domains are searched at a registrar and when the registry VeriSign (NASDAQ: VRSN) is pinged. Someone is selling the data, she says, and Network Solutions has implemented this solution to stop it. Network Solutions will not release the domain if you request, and anyone who visits the domain or Network Solutions can register it.

This creates a new opportunity for frontrunners and domain tasters: just monitor NetSol’s reserve domain DNS for new domains and register anything its customers are searching for.

Where does the data of a registrant availability search which allows for front running get intercepted? Is it at the NSI web site level? The end-user computer level?

According to NSI, they don't know either (hard to believe) but suggest it is further upstream, at the ISP or registry level. NSI says that's because Network Solutions then must check availability at other sites when a customer searches.

"1. It is trying to stop “domain frontrunning”, whereby people steal domain queries. NSI believes this is happening somewhere along the chain between when someone searches for a domain at NetSol.com and the registry. It could be ISPs or it could be people at the registries themselves."

Also, by picking the domains up as a registrant they are cybersquatting on hundreds, if not thousands, of trademark domains. Anytime someone searches for a trademarked domain, Network Solutions is registering it and putting up its domain parking billboard with paid advertising links on it! Many of these parked sites have targeted advertising competing against the trademark holder.

Given their commercial interest in forcing registration through NSI and the advertising dollars generated through their parked page program, it is hard to buy the consumer protection explanation. Regardless, consumer protection does not legitimize cybersquatting under the ACPA or UDRP.

Remember, the worst features at the registrar level are all supposedly in the name of consumer protection. The 5 day grace period which spawned domain tasting is the best example.

Network Solutions provides the following language on its WHOIS search webpage found at http://www.networksolutions.com/whois/index.jsp :

NOTICE AND TERMS OF USE: You are not authorized to access or query our WHOIS database through the use of high-volume, automated, electronic processes or for the purpose or purposes of using the data in any manner that violates these terms of use. The Data in Network Solutions' WHOIS database is provided by Network Solutions for information purposes only, and to assist persons in obtaining information about or related to a domain name registration record. Network Solutions does not guarantee its accuracy. By submitting a WHOIS query, you agree to abide by the following terms of use: You agree that you may use this Data only for lawful purposes and that under no circumstances will you use this Data to: (1) allow, enable, or otherwise support the transmission of mass unsolicited, commercial advertising or solicitations via direct mail, e-mail, telephone, or facsimile; or (2) enable high volume, automated, electronic processes that apply to Network Solutions (or its computer systems). The compilation, repackaging, dissemination or other use of this Data is expressly prohibited without the prior written consent of Network Solutions. You agree not to use high-volume, automated, electronic processes to access or query the WHOIS database. Network Solutions reserves all rights and remedies it now has or may have in the future, including, but not limited to, the right to terminate your access to the WHOIS database in its sole discretion, for any violations by you of these terms of use, including without limitation, for excessive querying of the WHOIS database or for failure to otherwise abide by these terms of use. Network Solutions reserves the right to modify these terms at any time.


Nowhere in this language does it say that an Internet user’s search of the WHOIS database will result in NSI registering the domain name searched for a five day period wherein the Internet user can only purchase the domain name through NSI (at a much higher cost that with another registrar). To the contrary, the Terms of Use states, “The Data in Network Solutions’ WHOIS database is provided by Network Solutions for information purposes only…” While we shouldn’t expect NSI to say that it participates in domain front running, there should be notice to the Internet user that this is not a free, public, no-strings-attached domain name availability search. Users have undoubtedly lost out on domains because of this practice.

So now what? Well, the most common means of getting a domain name to which you have rights is the UDRP. However, ICANN’s Uniform Domain Dispute Resolution Policy (found at http://www.icann.org/udrp/udrp-policy-24oct99.htm) specifically exempts accredited registrars, like NSI, from liability under the UDRP. Specifically, the Policy “sets forth the terms and conditions in connection with a dispute between you and any party other than us (the registrar) over the registration and use of an Internet domain name…” Therefore, the cost-effective and efficient UDRP option is not available. However, there may be another option, which many may not consider.

In particular, the federal and state governments have enacted legislation that essentially codifies the common law definitions of fraud and misrepresentation. In fact, Virginia (the state where NSI is located) has enacted the Consumer Protection Act (Va. Code Ann. § 59.1-196 (2007), which is patterned after the Federal Trade Commission Act. The goal of this legislation is to prohibit “unfair or deceptive acts or practices.” Based upon the allegations made against NSI thus far, it appears that the Consumer Protection Act does provide a way for Internet users who have been damaged by what appears to be domain front running to seek damages.

While this may be the way to damages, it is yet to be determined if the actual domain name can be retrieved. Think about this scenario…you use NSI’s WHOIS database to perform a domain name availability search for the name of your new company. You decide to wait to register the domain name until you compare registrar prices and learn more about domain name registration. Ultimately, you decide to register, but learn that you must register with NSI, or even worse, someone else has registered the domain name. While you may be able to get damages against NSI, getting the domain back may be impossible.

Regardless, we can only hope that NSI, and possibly other entities, stop the alleged domain front running and similar misleading practices. Consumers need to feel comfortable and know that searching a free, public database does not commit them to one registrar.

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