November 17, 1997 8:50 PM PST

Trademark ruling shields NSI

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In a decision with wide implications for the extension of trademarks into cyberspace, a federal judge has ruled that Network Solutions (NSOL) is immune from most infringement claims.

The decision, issued today by U.S. District Judge Dean Pregerson, dismisses claims that Lockheed Martin brought last year after the registry awarded more than a dozen domain names containing variations of Lockheed's coveted "Skunk Works" mark.

The suit alleged that Network Solutions Incorporated (NSI) had a duty to screen domain name applications and that its failure to do so infringed Lockheed's trademark rights and constituted unfair competition. Network Solutions argued that federal law imposes no such duty and that because it registers more than 100,000 sites each month, such a duty would hinder growth of the Internet.

The 45-page decision squarely sided with Network Solutions by holding that its registration of domain names has no connection whatsoever to trademark use. "By accepting registrations of domain names containing the words 'skunk works,' NSI is not using the Skunk Works mark in connection with the sale, distribution, or advertising of goods and services," Pregerson wrote. "NSI merely uses domain names to designate host computers on the Internet."

The company also has been named in about 40 other domain name-related lawsuits.

In order for a party to infringe a trademark under federal law, the mark must be used in a commercial setting. "Something more than the registration of the name is required before the use of a domain name is infringing," Pregerson added.

Edward Poplawski, the lead litigation attorney for NSI, hailed the decision as a major victory for the Herndon, Virginia, company, which maintains exclusive authority to register the most valuable domain names under a contract with the National Science Foundation.

"This decision sounds the death knell to any future claims made by trademark owners that Network Solutions' mere registration of an offending domain name and refusal to cancel it constitutes an act of trademark infringement, dilution, or unfair competition," said Poplawski, an attorney at Pretty, Schroeder, & Poplawski in Los Angeles. "This decision says that Network Solutions has such an attenuated and remote involvement with any alleged infringing use of a domain name that it is inconceivable that they could be held responsible, unless perhaps they had absolute and unequivocal knowledge" of the infringement.

Exactly how NSI might receive "unequivocal knowledge" remains unclear. The decision makes plain that the mere allegation to NSI that a domain name infringes does not constitute such notice, an argument advanced by Lockheed. Instead, Pregerson held "knowledge of infringement cannot be imputed to NSI because of the inherent uncertainty of trademark protection in domain names."

An attorney for Lockheed said the company was deciding whether it would appeal the decision, but in any event, it disagreed with Pregerson's legal analysis.

"I felt that the opinion reflected a policy judgment rather than the application of existing trademark and intellectual property law," said David Quinto, an attorney at Quinn Emmanuel Urquhart & Oliver in Los Angeles. He added that trademark law, which can be applied to prevent printers and publishers from contributing to a third party's infringing activity, should have been applied to NSI in a similar fashion.

The ruling pleased even longtime NSI critics. One of them, G. Gervaise Davis III, said "what large companies are trying to do is force some of the NSI people to run around and force their demands, many of which are unreasonable." Davis is an attorney with Davis & Schroeder, who represents a number of domain name holders in trademark suits.

"I think [NSI] is going to take this holding and apply it to getting out of two or three [similar] cases," Davis added. "It will make them very happy and I think will allow them to minimize the number of suits they get involved in the future."

 

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