NSI Class Action Lawsuit Over Domain-Squatting

Mr_Reaper writes: "Some people from eyeondomain.com started a class action lawsuit against NSI for not releasing expired domain names. If you've tried to grab an expired domain name and couldnt get it this maybe something to look at." See our previous story. The law firm is seeking affidavits from people who have attempted to register expired domain names which Network Solutions is holding on to -- you can email for more information if you want to submit such an affidavit.

Comments

NSI doesn't delete domain names either

[tgw]

NSI squatting on expired domain names is definitely an issue. The other side of the same coin is that they don't delete domain names, either. I bought a domain name a year or so ago to play a prank on a friend. Only needed it a short time. Since NSI sends junk email & snailmail to every domain holder, I wanted to get rid of the no-longer-needed domain - to cut down on junk mail from NSI. I submitted the request to delete the domain weeks ago. It processed through their system okay. Then I got an email that said that it had to be "reviewed" for approval, or some such thing. It's weeks later and the domain name still hasn't been deleted.

Over a year ago I sold a domain name to somebody. I submitted the paper work to NSI to change possession of the domain. They still haven't done it. I eventually just changed the IP addresses on the domain to point to the new owner's hosting service, since NSI didn't do their job.

This is what government-sponsored monopolies get us. It's pretty sad. And maddening. I hope this law suit costs NSI a lot of money.

Your easy solution == Liberal Solution

[tswinzig]

Simply regulate the industry so that nobody's allowed to sell a domain name for more than, say $35.

Goodbye capitalism, hello communism.

it sure seems like it would cut out the majority of the dirtbags involved in domain reselling.

There are much better ways to do that without requiring the U.S. government to get involved in price-fixing.

The first problem to solve is Network Solutions holding on to domain names after they are no longer being paid. This is simply a legal matter. They have no right to hold onto those domain names. Their job is to facilitate the sale of domain names to people and companies, and to run the root DNS servers. They should have no control over who gets to buy the domain names, I think that's clear.

Second problem -- cybersquatters. It's similar to real estate. Instead of predicting where the next major boom is going to be, and buying all that land, 'squatters try to predict the hot names on the internet. The difference is that it is cheaper to squat a domain name than a piece of real estate. So what happens in the real world when a land squatter has bought up all the available land in an area, and wants a price the market considers "too high"? Simple... either the price comes down so the market will buy, or the market GOES ELSEWHERE. In the case of domain names, this means the market puts pressure on other top-level domains, e.g. .biz, .sex, .bank, etc. They can (and probably will) learn a lot from the usenet-style naming conventions before long. wellsfargo.bank is just as easy to remember as wellsfargo.com.

And finally, technological innovations will eventually wipe out the cybersquatters just as it created them. If I still have to type "slashdot.org" in a stupid web browser in three years, I'll eat my hat.

"Hello Search Engine. View Slashdot."

WHAMMO.

So please, let's not get the government involved in yet another area of our lives.

-thomas

There is only one problem...

[Thalia]

I agree with the concept that NSI should be forced to give up those domain names. And I do think that joining is a good idea. Although, if you join a class action, the likely recovery is in the pennies, while all the money is received by the named plaintiff and the attorneys, so keep that in mind. But, on reading the complaint, I found a fairly major problem. In order to have an actual case, the plaintiffs have to prove that an action or lack of action by the defendant caused them harm, and that the defendant had a duty to act to prevent this harm. I see proof of harm, and that defendant (NSI) caused the harm. But this complaint does not allege a duty on NSI's part to give up those domain names. The closest it comes is by stating: "NSI is restraining trade ... despite the fact that NSI disclaims rights in domain names." (Statement of Facts, Paragraph 44). This is not enough to establish that the NSI has a duty to release those names. I expect that NSI's answer, which is not available online as far as I can tell, focuses on the fact that they have no duty to be prompt, or to release domain names. I do think that a case could be made by the other registrars that the NSI's actions is an interference with their business. But it is much harder for an individual to take on the NSI, and somehow prove the obligation to release domain names. Thalia This is not legal advice, so don't even think it.

Didn't-cha know?

[DiviN]

if one's IQ exceeds the one of the plastic pot plant in NSI's main lobby, he/she has no chance of ever being hired by NSI...

We've been transferring hundreds of domains in the past year and have been using their fancy online forms for dozens of NIC handle contact changes. Guess what 3 times these actions went smoothly. THREE TIMES. Three times out of hundreds.
Whenever one of our less experienced clients decides that he/she needs to make some changes, we usually advise them to get things rolling, get the dreaded NIC tracking number and then immediately start spamming NSI on a daily base.
For that purpose we use a variety of *real* NSI email addresses on a rotating base.
Per average it still takes about ten days four emails and two faxes to get any changes done.
So, for the heck of it, we transfered one unused domain name back to NSI, just to see what would happen [well, okay, the team was heavily betting as well].
Guess what? Transferring *to* NSI took 4 hours!

So, it's quite obvious, if there is money in it for them they have no staff shortages and the system works smoothly. If there is no money in it, then they make it as difficult as possible to deter people from changing.
Talking about abusing monopoly powers...

For a short time we even had accounts with NSI because we hoped that things would work more smoothly. Far from it! Our accountants are still in a clinch with their accountants about some missing funds...

Just a reminder of the finer workings of the 'Great Equalizer' - which unfortunately tends to fail to reconscile.

The problem...

[Slngal 11]

The problem with NSI is that they are serving two roles. They run the root DNS servers. This gives them a guaranteed flow of income no matter how much the customers hate them. Their second role is that of a registrar.

Now, they seem to do a pretty good job of running the root name servers. The problem is that this position gives them an advantage over the other registrars. For one, they are guaranteed to have income. No matter how badly they screw up, or how much market share they lose, they will still have money rolling in because all of their competition has to pay them. In addition, as in this case, they can arbitrarily snap up domains without having to actually pay for them. Any other registrar that wanted to play this game would have to fork over cash to NSI to fund it.

What I think ICANN should dictate is this. One or more companies will be given contracts to register domain names, similar to what is done now. A second group of one or more companies will be given contracts to run the root servers. People who register a domain will pay the first group. The first group will pay some fee to the second group for each domain they want served. The contracts for both groups will stipulate that they are not allowed to own, be owned by, partner with, or be the same as any company in the other group.

The abuse that is happening with the current system is out of hand. NSI is acting like a greedy spoiled brat who is causing untold amounts of grief for thousands of hard working admins out there. Unfortunately, with the current system, they can and will keep doing it. In fact, I would expect their behavior to actually get worse as their market share declines. As they lose customers, past behavior indicates that they will abuse their power more to make up for the lost profits.

Property

[SlashGeek]

This all really goes back to the debate about whether domain names are property, and if one can "own" the rights to a domain name. In the case of a trademark, such as Microsoft, try that one at Register.com and see what it says. It will tell you that Microsoft is a Trademarked name and cannot be registered etc etc. Why should this be different for any other for-profit website? Even if it is only profit from banners, it is a business, and many online business have their domains as their (trademarked) business name. Is there a minimum profit or sales that the site or company has to maintain to have a name "trademarked" like MS does? It seems rather unfair that some companies have total control over their domains and other, smaller ones have to pay the piper for the rights to their own business.

Think, there are perhaps hundreds of millions of small business on the web. If these were storefront businesses, could the Sign Police come around once every 2 years and tell them that because they have a really cool sign and buisness name, that it will cost them $xxxxx.xx dollars to keep their mom and pop store open for another two years? I seriously doubt it. I hope the courts rule in favor of eyeondomain.com and everyone else involved in the Class Action Suite. The Intellectual Property that represents a domain, particularly one that is registered to a for-profit site, is the sole creation of the registrant. NSI had nothing to do with thinking of a name, creating a business model, designing the site, etc. They are there only to provide a service, and nothing more. The Internet Chamber of Commerce if you will.

Good luck to everyone at eyeondomain.com and company.

Motive for the suit?

[Masem]

Obviously, I agree that the NSI action of holding onto domains is bogus, but as others pointed out, NSI theorhetically holds all domains by their updated User Agreement, and therefore they have a right to sell them for such. This part *may* hold up in court.

But this then sounds like the lawfirm has a more important goal in mind: point out the fundamental flaws of NSI, such as retroactive changes in User Agreements, poor customer service, etc etc, such that NSI is penaltized by the court system for their actions. The auctioning of expired names is merely a tip of the iceberg of abused that NSI has done for years.

Unless I'm Mistaken...

[zpengo]

Isn't there some kind of loophole in the User Agreement that basically states that the users never actually *own* their own domain names, but that NSI officially owns them and is just letting people use them? This whole thing could have been an evil (but brilliant) trap from the beginning -- We're basically just creating a massive list for them of every domain name anyone could ever want; and then handing possession of those names over to them.

Register.com all the way, baby!