Case No. 96 CV 694, Division 5 ______________________________________________________________________________
Plaintiff Clue Computing, Inc., (hereinafter referred-to for convenience as Clue Computing unless noted otherwise), complains against Defendant Network Solutions, Inc. (hereinafter referred-to for convenience as NSI), as follows:
1. Plaintiff Clue Computing is a Colorado corporation with an address of P.O. Box 983, Longmont, Colorado. Clue Computing was registered as a business name with the Colorado Secretary of State on 1 June 1994, when Eric Robison and Dieter Müller, individuals, began doing business as a partnership called Clue Computing. In October 1995, the business became solely owned by Eric Robison, who incorporated his business on 22 May 1996. At all times relevant to this action, Clue Computing (the predecessor business entity) and Clue Computing, Inc., have been engaged in the same business: software engineering, computer system administration and security, and providing Internet access to other persons and businesses.
2. Network Solutions, Inc., is a District of Columbia corporation with headquarters at 505 Huntmar Park Drive, Herndon, Virginia. Among other things, NSI is in the business of providing to non-military Internet users all necessary registration services, including the registration of Internet domain names. At all times relevant to this action, NSI has transacted business within the County of Boulder and the State of Colorado. Additionally, the tortious acts complained-of by Clue Computing were committed by NSI within the County of Boulder and the State of Colorado. Accordingly, venue and jurisdiction are proper in this Court.
3. The Internet is a worldwide network of computers through which businesses and individuals can send nearly-instantaneous email (electronic mail) communications and other information of various kinds. On information and belief, the Internet began as a communications network linking various agencies of the United States government, the United States military, and educational institutions and was created entirely with public funds, including funds of the Department of Defense and the National Science Foundation.
4. Communications on the Internet are made using addresses like 'firstname.lastname@example.org'. The name is the name of the user, often (but not necessarily) an individual person. The part of the address after the @ sign is called the domain name. The domain name is a unique identifier which designates a set of computers on the Internet in the same way that a street address designates a physical location. For example, Eric Robison's Internet address is email@example.com, which denotes Eric Robison (ericr, for Eric R., the individual) at clue.com, the domain or computer address. The address is pronounced eric r at clue dot com. The part of the address after the dot, or period, is a general indicator of the type of network at that domain the .com designation indicates a commercial network, while .mil indicates a military address, .gov indicates a government address, and .org indicates a non-profit organization. While the name preceding the domain name is unique to a single user, many users can share a single domain name.
5. On information and belief, in 1991 the United States federal networking agencies asked the National Science Foundation (NSF) to assume responsibility for certain aspects of the non-military Internet registration services. This responsibility included the registration of certain classes of domain names. Domain-name registration was handled by an agency called InterNIC, which stood for Internet Network Information Center. People who wanted domain names simply applied for them, and if the applied-for name was available, i.e. not already assigned to someone else, the applicant was awarded the domain name. This registration system was entirely first-come, first-served. Disputes arising after domain names were issued were resolved by the disputants on their own and not by the InterNIC.
6. In 1993, NSF, an executive agency of the United States government, awarded to NSI a cost-plus-fixed-fee cooperative agreement (the NSF contract) to provide these non-military Internet registration services. The NSF contract extends through 1998 and has a value in excess of $5 million. Applicants for domain names send their applications to NSI from every state including Colorado by either email (through the Internet) or postal mail. NSI sends confirmation of these domain-name registrations back to the applicants by these same means. NSI also charges fees for (a) the initial registration and (b) ongoing maintenance of the domain names, which fees are paid to NSI by checks mailed from every state, including Colorado.
7. Under the language of the statute through which NSF awarded the contract to NSI, that is, pursuant to 31 U.S.C. 6305, NSF transferred to NSI "a thing of value... to carry out a public purpose of support or stimulation..." Thus, NSI assumed a position of public trust and a duty to carry out domain name registration in an impartial, unbiased manner consistent with the interests of the public, in particular the users of the Internet.
8. On information and belief, in July and November of 1995, NSI instituted new policies relating to registration of domain names (the New NSI Policy). These policies included a provision under which a challenge could be lodged against an existing domain name registration by a party holding a registered trademark (from any country) which is identical to the domain name.
9. Prior to mid-June 1994, Clue Computing applied to NSI for the domain name clue.com. This application was sent to NSI via email through the Internet by Clue Computing from its place of business in Boulder County, Colorado. On 13 June 1994 the registration for clue.com was granted to Clue Computing by NSI, and confirmation of this registration was sent to Clue Computing in Boulder County, Colorado, by email through the Internet. At this time, NSI's policy (the pre-July-1995 policy) was to grant domain names on a first-come, first-served basis as described above.
10. From June 1994 to the present, Clue Computing has offered Internet services to customers in Boulder County, Colorado. Such services include email services, World Wide Web services, and numerous other Internet-related services. Nearly all of these services have relied on and still rely on the clue.com domain name. Both Clue Computing and its customers use the clue.com address for their communications, and they rely on this address-- this domain name-- for their businesses.
11. Some time on or prior to 1 February 1996, the owner of the trademark registration for CLUE, the board game, presented its trademark registration to NSI and requested the institution of a challenge proceeding under the New NSI Policy. The trademark owner is Hasbro, Inc. While NSI sends copies of its own correspondence with Clue Computing to Hasbro, NSI refuses to provide Clue Computing with copies of any of NSI's correspondence with Hasbro. Accordingly, Clue Computing does not know whether Hasbro alleged any wrongdoing on the part of Clue Computing. Regardless of any such allegation, Clue Computing committed no wrongdoing against Hasbro.
12. By means of a postal letter dated 1 February 1996, NSI informed Clue Computing of the challenge to the clue.com domain and asserted that the New NSI Policy governed the options purportedly available to Clue Computing. Attached to the letter was a copy of the New NSI Policy. This communication made Clue Computing aware for the first time of the New NSI Policy. On information and belief, NSI did not attempt to directly inform Clue Computing or other registered domain name users of the New NSI Policy apart from the sending of letters to particular domain name users incident to challenge proceedings. On information and belief, NSI is applying the New NSI Policy to all domain names including those which, like clue.com, were registered prior to the institution of the New NSI Policy. The communications in February 1996 presented Clue Computing with these options:
13. Clue Computing could provide, within the response period of the letter, proof of ownership of a trademark registration identical to clue.com, in which case Clue Computing could continue to use the domain name provided Clue Computing indemnified NSI or posted a bond to protect NSI from suit by Hasbro. On information and belief, no indemnification or security was required from Hasbro.
14. If Clue Computing did not produce proof of a trademark registration within the period set by NSI's February 1996 letter, Clue Computing could give up the domain name to Hasbro or have the domain placed on hold, to be used by no one until the dispute between Clue Computing and Hasbro was resolved by agreement, court order, or arbitration. There is no dispute to be resolved between Clue Computing and Hasbro.
15. On his own, Mr. Robison (on behalf of Clue Computing) attempted to negotiate a resolution of this matter with Hasbro and with NSI. He informed NSI of the nature of Clue Computing's business and the harm that (a) had already resulted from NSI's threat to cut off the clue.com domain name and (b) would result from an actual cut-off of that name. While he was able to get one extension of the cut-off date, Mr. Robison was not successful in obtaining any other agreements. It now appears that NSI will de-activate the clue.com address on or about 14 June 1996.
FIRST CLAIM-- BREACH OF CONTRACT, THIRD-PARTY BENEFICIARY
16. Clue Computing incorporates by reference the allegations set forth in paragraphs 1 through 15.
17. As a result of its NSF contract, NSI has a duty to members of the public who wish to obtain and maintain domain names to implement policies for such registration which are fair and even-handed.
18. As a domain-name registrant, Clue Computing is a third party beneficiary that was intended to benefit from this duty.
19. NSI has breached this duty by implementing the New NSI Policy which unfairly and arbitrarily denies a registrant the continued use of its domain name.
20. NSI has breached this duty by implementing the New NSI Policy which requires an existing domain user to post security for continued use of its domain name without requiring similar security from the party challenging the domain name.
21. NSI has breached this duty by implementing the New NSI Policy which does not require a challenger to make even a colorable allegation of trademark infringement or other legal basis pursuant to which a court could order the domain name transferred.
22. NSI has further breached this duty by conducting matters relating to domain name disputes in an arbitrary and capricious manner. NSI's actions regarding the clue.com domain name constitute a willful and reckless disregard for the contractual duties owed by it to Clue Computing pursuant to NSI's agreement with NSF.
23. Clue Computing has been injured and will continue to be injured by this breach unless NSI is enjoined from enforcing the New NSI Policy and ordered to develop a new policy which is fair and evenhanded.
24. Clue Computing has been injured monetarily by NSI's breach of contract and is entitled to an award of money damages for that injury. Further, NSI's willful conduct entitles Clue Computing to an award of exemplary damages.
SECOND CLAIM-- DETRIMENTAL RELIANCE
25. Clue Computing incorporates by reference the allegations set forth in paragraphs 1 through 24.
26. By entering into the contract with NSF and conducting the business of registering domain names, NSI made an implied promise to the registrants of such domain names, including Clue Computing, not to arbitrarily interfere with registrants' continued use of their domain names.
27. Clue Computing has relied to its detriment on this promise, and has expended significant amounts of time and money in the development of its business and in the development of the Clue Computing name in connection with providing computer-related services to third parties.
28. Clue Computing has therefore been injured and will continue to be injured unless NSI is enjoined from enforcing the New NSI Policy and ordered to develop a new and fair policy. Clue Computing has also been damaged monetarily and is entitled to an award of monetary damages, including punitive damages for NSI's willful conduct.
THIRD CLAIM-- BREACH OF CONTRACT
29. Clue Computing incorporates by reference paragraphs 1 through 28.
30. Through the NSF contract, NSI offered to the public, including Clue Computing, the opportunity to register domain names for non-military uses on the Internet.
31. Clue Computing accepted this offer in June of 1994 when it registered the domain name clue.com. In exchange for Clue Computing's agreement to register a domain name with NSI, NSI agreed to recognize Clue Computing as the only holder of the clue.com domain name. Clue Computing understood that its use of the clue.com domain name was limited by the laws governing commerce and communications. In June 1994, NSI accepted domain-name registrations on the first-come, first-serve basis described above.
32. Clue Computing's registration of clue.com was the first and only registration of that domain name.
33. Clue Computing's registration of the domain name clue.com has created a valuable business asset through which Clue Computing conducts its own business. Furthermore, Clue Computing has invested resources to promote and develop this business asset.
34. NSI's adoption and retroactive application of the New NSI Policy to Clue Computing's registration is a unilateral modification of the agreement between Clue Computing and NSI and breach of the agreement made when the parties first contracted in June 1994.
35. NSI's application of the New NSI Policy to the clue.com domain name and its jeopardization and threat to the very business asset which forms an integral component of Clue Computing's business operations is a breach of the parties' agreement.
36. Clue Computing has been injured and will continue to be injured by this breach unless NSI is enjoined from enforcing the New NSI Policy and ordered to develop a new policy which is fair.
37. Clue Computing has been injured monetarily by NSI's breach of contract and is entitled to an award of money damages for that injury. Further, NSI's willful conduct entitles Clue Computing to an award of exemplary damages.
FOURTH CLAIM-- INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS
38. Clue Computing incorporates by reference paragraphs 1 through 37 set forth above.
39. Clue Computing contracts with several customers, providing each with access to the Internet through Clue Computing's computer and communications equipment, each of whom uses the clue.com domain name pursuant to his or her agreement with Clue Computing.
40. NSI is aware that Clue Computing earns revenue by the means described in the previous paragraph and that change or disruption of the domain name would cause Clue Computing economic injury.
41. NSI's unilateral application of the New NSI Policy to the clue.com domain name by requiring Clue Computing to change its domain name, post a security bond in an unspecified amount, indemnify NSI against any action taken by Hasbro, or have its domain name cut off, interfered with Clue Computing's business and its contractual obligations to its own customers, who use the Internet through the clue.com domain name.
42. Such interference will cause Clue Computing significant damage because Clue Computing will be unable to perform its contractual obligations and will lose customers.
43. Clue Computing has been injured and will continue to be injured by this interference unless NSI is enjoined from enforcing the New NSI Policy and ordered to develop a new policy which is fair.
44. Clue Computing has been injured monetarily by NSI's interference and is entitled to an award of money damages for that injury; further, NSI's intentional conduct entitles Clue Computing to an award of exemplary damages.
FIFTH CLAIM-- DECLARATORY JUDGMENT
45. Clue Computing incorporates by reference paragraphs 1 through 44.
46. NSI has clearly and unequivocally declared its unalterable belief that the New NSI Policy is binding upon Clue Computing. Clue Computing has attempted to resolve this matter but has unequivocally stated its belief that the New NSI Policy does not apply to Clue Computing.
47. Clue Computing and NSI have reached an impasse regarding the applicability of the domain name policy to pre-policy registrants such as Clue Computing.
48. Clue Computing and NSI have reach an impasse regarding the proper implementation of domain-name-registration policy in the event the policy does apply to Clue Computing.
49. As set forth above, these impasses jeopardize Clue Computing's continued use of its clue.com domain name.
50. Given that these impasses exist regarding policy applicability and application, declaratory relief clarifying the parties' legal relationship would serve a useful purpose by terminating and affording relief from the uncertainty, insecurity and controversy giving rise to this proceeding.
WHEREFORE, Clue Computing prays for relief as follows:
51. An Order enjoining NSI from placing the clue.com domain on hold as a result of enforcement of the New NSI Policy;
52. An Order requiring NSI to develop new policies which will provide for fair and evenhanded treatment of domain name owners when issues of trademark disputes are raised;
53. An Order forbidding NSI from acting in an arbitrary or capricious manner in interpreting policies relating to domain name registrations, and requiring NSI to publish the outcome of all such interpretations for the benefit of the concerned public;
54. Monetary damages, including punitive damages, arising from NSI's outrageous conduct in devising and then enforcing the New NSI Policy against Clue Computing, and any damages which may arise if the domain name clue.com is discontinued;
55. A declaration that the New NSI Policy is not applicable to Clue Computing's pre-Policy domain name registration;
56. Attorney's fees and costs; and
57. Such other relief as the Court may deem just and proper.
Clue Computing requests a jury of six persons on those issues triable to a jury.
DATED: 12 June, 1996
Philip L. Dubois, #10769
Philip L. Dubois,
Lawyer for Clue Computing, Inc.
2305 Broadway Boulder, CO 80304-4106
The allegations set forth in the foregoing Verified Complaint are true and correct to the best of my knowledge and belief.
(Eric Robison, as President of Clue Computing, Inc.)
The foregoing document has been subscribed and affirmed, or sworn to before me in the county of Boulder, state of Colorado, this ___________ day of _______________________, 19_____.
(official signature, seal, and commission expiration date of notary)