United States. The "sex.com" case: Network Solutions could be found guilty of negligence in the transfer of a domain name

In 1994, Network Solutions registered the domain name "sex.com" for free. A few months later, and after receiving a letter stating that the initial owner of this domain name did not intend to use it anymore and that he wished to transfer it to a designated third party, Network Solutions transferred the domain name to the third party in question.

Unfortunately it appeared that the letter was a forgery. The first owner of the domain name consequently sued the new one (who was the author of the letter), as well as Network Solutions. He was successful with regard to the new owner "and was thus returned the domain name" but the judge refused to issue a decision against Network Solutions. Unable to recover his money from the infringer, the initial owner of the domain name instituted new proceedings for a court ruling based on the responsibility of the registrar.

On the 25 July 2003, the Court of Appeals of San Francisco decided that although Network Solutions was not responsible for breach of contract (provided that the registration of "sex.com" was free), the initial owner holds a property right on the domain name, since he has spent time and money for the creation and conservation of his website. The transfer realised by Network Solutions constituted thus an infringement of this property right. The case is consequently remanded for further proceedings in order to decide upon the responsibility of the registrar.

(Source: IPR-Helpdesk IP-News dated August 08, 2003)

Decision of the Court of Appeals for the Ninth Circuit of San Francisco, 25 July 2003 - PDF