NSI v. Clue (was: Trademarks, random strings, sharing, reservedwords)

[Dale Mead <dcm@apple.com>]

>Many people have held out hope for the interpleader process.
>Unfortunately, the
>only time it was tested in the courts, it was held to be unavailable on the
>grounds that the registry was not a disinterested stakeholder, but rather
>was a
>party to a contract (the registration itself) that was fundamental to the
>lawsuit. (NSI v. Clue Computing, DC Colo, Civ Action No. 96-D-1530, 10/29/96).
>In other words, the registrar created and issued the domain name for the
>purpose
>of its use on the Internet;  it cannot therefore remove itself from the
>conflict.

I don't read NSI v. Clue as grimly.  It is absolutely true that if a
registry wants to invoke interpleader, it *must* be a disinterested
stakeholder, or as the court said, "[W]here he stands as a wrongdoer with
respect to the subject matter of the suit or any of the claimants, he
cannot have relief by interpleader." The holding was that there were claims
of wrongdoing associated with NSI's handling of the res, and therefore, NSI
couldn't just walk away.  IMHO, the case was rightly decided.

That is a far cry from saying that interpleader is not available to
registries.  (In fact, the judge, in dicta, said that he believed that such
a case could be framed in interpleader).  The problem then is how a
registrar must act in order to be entitled to interpleader.  The existence
of a contract being the registrar and the initial registrant does not
preclude interpleader--the most common use of interpleader is in escrow
environments where there are plenty of contracts.  Where NSI failed in this
case was with the claims that NSI breached that contract.  That
unfortunately enabled the court to avoid considering the more interesting
questions:

1.  Is a registrar/steward itself liable to a trademark owner when the
court finds that a domain infringes?  (This question probably needs to be
resolved before any interpleader request will be allowed to move forward.
However, it is also true that interpleader might be the best place for
registrars to raise the issue).

2.  How much mediation and dispute resolution activity may the stakeholder
engage in before being at risk of being drawn in as party?  The traditional
advice to stakeholders is to stay completely at arms length from any
disputes.  I would be very uncomfortable with one of my clients claiming to
be a stakeholder and engaging in the level of dispute resolution that NSI
has been.

>My point is that, if trademark issues are ignored now, registries may (and
>probably will) find themselves faced with liability in trademark disputes
>in the
>future.  The measures contained in the IAHC draft are intended in part to
>avoid
>or delay that.


Agreed.  But I wonder how well the specifics of the draft accomplish your
purposes.  I can't imagine it stopping any lawyers who otherwise would from
including a registrar in a suit, but I can imagine suits arising out of it.

Dale

representing myself, not my employer