Designer Skin LLC v. S & L Vitamins, Inc., et al.
Register.com, Inc. v. Verio, Inc.
126 F. Supp. 2d 238 (S.D.N.Y., December 12, 2000) (Jones, J.) aff'd. 356 F.3d 393 (2d Cir. 2004)
Register.com operates a domain name registration service. It also provides a variety of related services, including web site hosting and electronic mail. To be authorized to provide domain name registration services, Register.com was required to and did enter into a Registrar Accreditation Agreement with ICANN. Pursuant to this agreement, Register.com is required to provide the public with access to a Whois database containing, inter alia, contact information by which one can reach those individuals who utilize Register.com's services to register their domain name. This agreement with ICANN sets forth the restrictions Register.com can place on the uses made by the public of data they obtain from the Whois database. More particularly, this agreement provides:
Registrar shall not impose terms and conditions on use of the data provided except as permitted by ICCAN-adopted policy. Unless and until ICANN adopts a different policy, Registrar shall permit use of data it provides in response to queries for any lawful purposes except to: (a) allow, enable, or otherwise support the transmission of mass unsolicited, commercial advertising or solicitations via e-mail (spam); or (b) enable high volume, automated, electronic processes that apply to Registrar (or its systems).
[B]y submitting a Whois query, you agree that you will 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, electronic mail, or by telephone; or (2) enable high volume, automated, electronic processes that apply to Register.com (or its systems). The compilation, repackaging, dissemination or other use of this data is expressly prohibited without the prior written consent of Register.com. Register.com reserves the right to modify these terms at any time. By submitting this query, you agree to abide by these terms.
Verio, Inc. is a company that provides a variety of internet services, including web site hosting and development. To assist it in developing its business, Verio decided to market its services to individuals who recently registered domain names. Verio obtained information concerning the identity and whereabouts of these individuals, in part, by using a search robot to search Register.com's Whois database. Verio then utilized this information to solicit business from these individuals via telemarketing and e-mail.
Accordingly, the Court found that plaintiff was likely to succeed on its breach of contract claim. The court issued injunctive relief because it believed the damage Register.com would sustain, which included injury to its reputation and goodwill, would be difficult to measure in damages.
The Court also found that Register.com was likely to prevail on its trespass to chattel claim as a result of Verio's use of a search robot to obtain data from Register.com's Whois database. As stated by the Court:
One who uses a chattel with the consent of another is subject to liability in trespass for any harm to the chattel which is caused by or occurs in the course of any use exceeding the consent, even though such use is not a conversion.
The Court first held that once Register.com objected thereto, for example, by filing this suit, Verio knew that its use of a search robot exceeded the scope authorized by Register.com.
The more interesting issue was whether there had been sufficient harm to sustain a trespass claim. The Court noted that "evidence of mere possessory interference is sufficient to demonstrate the quantum of harm necessary to establish a claim for trespass to chattels." While Verio's use alone did not significantly impair the operation of the Whois database, the threat that many others would also use search robots to access the Whois database if the Court did not find such use prohibited created a sufficient threat of injury to warrant injunctive relief. In reaching this conclusion, the Court relied heavily on Ebay Inc. v. Bidder's Edge, Inc., 100 F. Supp. 2d 1058 (N.D. Ca. 2000).
The Court also found that Verio's activities would likely violate the Computer Fraud and Abuse Act in that Verio had intentionally accessed plaintiff's computers without authority and thereby both caused damage and obtained information in violation of 18 U.S.C. §1030(a)(2)(c) and (a)(5)(c).
Lastly, the Court found that Verio's marketing activities would likely violate the Lanham Act. Many individuals, shortly after they register a domain name with Register.com, received a solicitation which indicated the caller was calling from Verio "regarding a recently registered domain name" or "regarding the registration of your domain name." This second solicitation further asked the registrant to "Please contact me at your earliest convenience ... If I don't hear from you in a couple of days I will call back." The Court was of the opinion that such solicitations, even though they did not use the Register.com mark or name, would likely create confusion as to their source. This conclusion was supported by evidence of actual registrant confusion submitted by Register.com. The Court accordingly held that such conduct was likely to constitute unfair competition and false designation of origin in violation of §43(a) of the Lanham Act, and accordingly enjoined it.