ICANN Seeks To Dismiss VeriSign Antitrust Claims

The group empowered with overseeing administration of Internet domain names and addresses has asked a federal court judge to dismiss antitrust and breach-of-contract claims leveled against it by VeriSign (Nasdaq: VRSN), which runs the registry for two of the most popular top-level domain extensions on the Internet -- .com and .net.

In an acerbic motion filed in U.S. District Court in Los Angeles, the Internet Corporation for Assigned Names and Numbers (ICANN) argued that VeriSign, in its own filing with the court, failed to submit sufficient facts to support an antitrust case against ICANN.

In a copy of ICANN's motion-to-dismiss obtained by TechNewsWorld, the nonprofit group argued, "VeriSign has not alleged facts sufficient to show that anticompetitive consequences flowed from ICANN's alleged conduct, or that ICANN's alleged conduct is the kind of conduct that the antitrust laws are intended to prevent."

Indeed, the motion continued, "all VeriSign has alleged is that it has been 'prevented from competing' because ICANN has misinterpreted the contract." In its motion, ICANN mocked VeriSign's contention that the Internet overseer was part of a conspiracy to restrain trade.

VeriSign Versus World

"VeriSign's meager allegation of a conspiracy falls far short," ICANN said in its motion. "VeriSign identifies ICANN's alleged coconspirators only as 'its members, including constituent groups within ICANN and the members of those groups.'"

This allegation is "useless," the motion said. "ICANN has no members ... and VeriSign offers no explanation of what it means by that term. Presumably, it could include any person or entity in the global Internet community that has participated in the ICANN process. But since participation in ICANN is open to any person or entity, the number of possible coconspirators equals the population of the earth."

Moreover, ICANN maintained, the fact that it conducts no commercial activity of any kind -- and has no financial interest in the actions of VeriSign or any of its competitors -- strongly undermines any notion of an antitrust conspiracy.

Ludicrous Claims

VeriSign's claims of breach of contract were also ridiculed by ICANN, which contends the dispute between it and VeriSign stems from a disagreement over contract terms.

"[I]t is ludicrous to assert that the existence of a dispute over the meaning of terms of the contract creates a breach of the contract or the implied covenant of good faith and fair dealing," ICANN argued.

Summarizing the thrust of ICANN's motion, ICANN general counsel John Jeffrey told TechNewsWorld, "Disagreeing and stating someone should be responsible to their agreement does not constitute a breach of a contract or an antitrust violation."

According to VeriSign vice president for government relations Tom Galvin, the domain registry hopes, through the lawsuit, to gain clarity on the corporate role of ICANN in terms of its oversight of new services and the process for introducing those services.

He noted that it has taken as long as two years for ICANN to approve some new services. "Two years is a very long time for the industry to wait to hear if a service can be adopted or introduced or not," he told TechNewsWorld from his office in Washington, D.C.

"It's very hard to run a business if people don't have any sense of confidence about when you're going to introduce a service," he added.

SLAPP To Come

Galvin maintained that ICANN has overstepped its authority. "What we're asking a judge to do," he said, "is to look at the contracts that VeriSign has and determine what ICANN's appropriate role is."

This week's court filing by ICANN will not be its last. Jeffrey disclosed that the group plans to file another motion Monday asking the court to strike certain provisions in VeriSign's complaint based on a California law passed to prevent lawsuits aimed at quelling free speech.

Asked about that additional filing under California's Anti-SLAPP (Strategic Lawsuits Against Public Participation) law, Jeffrey responded, "I wouldn't comment on that until we file the motion."

Observers Stumped

He noted, however, that the basis of the filing will center on correspondence between VeriSign and ICANN relative to suspending VeriSign's use of wildcard technology to redirect mistyped Internet domains to the company's own servers.

Playing the Anti-SLAPP card has some stumped some observers. "It seems like a stretch," observed Fred von Lohmann, a staff attorney with the Electronic Frontier Foundation in San Francisco.

"ICANN may be trying to stop discovery," added Lohman's colleague, Wendy Seltzer. "An Anti-SLAPP motion puts discovery on hold. We're seeing two big bullies up against each other here, so we'll probably see creative lawyering from both sides."