NSI Hasn't Got a Clue

Here's the story of how Clue Computing, Inc., one of the smallest companies in Colorado, is being forced into court by Network Solutions, Inc. (NSI), one of the largest companies in America. NSI has a contract with the US Government to operate the registry services part of the InterNIC. (The InterNIC takes care of Internet Domain Name registration and operates the Top Level Domain servers. NSI only does the registration part. AT&T runs the servers.) Bear with me for a few minutes, this takes some exposition.

For years, the InterNIC was run by government agencies or was contracted out to private business. Currently, the National Science Foundation (NSF) administers the contract that pays for the InterNIC. Now, if you're a taxpaying American, this means that you're paying for the operation of the InterNIC. NSI took over in January, 1993.

They quickly decided that a system of registration which had worked pretty well for years wasn't doing the job. So they started making changes, on the grounds that people were hoarding domain names (that is, registering more than they needed. Domain names are a limited resource.), or that NSI could be sued for condoning trademark or copyright infringement. They implemented the "New Policy" for domain names.

This policy has few provisions for dealing with domain name disputes, trademark disputes, etc. What it says is that anyone who can get a trademark (and you can trademark almost any word, phrase, etc., under a "class" that is different from other currently used trademarks) from any country on the planet, write NSI a letter, and they'll shut down the domain name you're protesting or want to own yourself. You don't have to post a bond (in case you're just being malicious), there's no due process (forget that little bit in the constitution about it), you've just screwed someone out of a domain name that they may have built their business around.

If you want to keep your domain name, you have to show them a trademark of your own (despite NSI's public statements that you don't need a trademark for your domain name, see NSI's own press release for their promise about this) and agree to post an UNLIMITED bond to cover NSI's legal expenses. If you can't do both, you lose your domain name to whoever spent $1,000 on a foreign trademark, and $.32 on a letter to NSI. Or maybe just the $.32, the policy is pretty vague about who can file a complaint, and what (if any) proof they need.

Now, before this policy was in place, NSI was named in only ONE suit alleging trademark problems. This suit was settled out of court, when the domain name holder agreed to relinquish. Most folks who had a problem with a domain name took it up with the domain name holder in court, where things happened in public, with everyone's rights protected. Under the current policy, NSI has been named in four suits without changing the policy. Which policy was better for NSI?

NSI won't disclose any details to the public about domain name disputes, domain name sales (and they're selling for big money!), pending policy changes, etc. There shouldn't be too many privacy issues here. NSI is a government contractor, operating a public registry for most of the planet to do business with. I don't think there's any thing that can't be public about this information.

Since implementing this policy, NSI has also convinced the NSF that more money is needed to run the InterNIC. The contract itself is worth over $5 million, but NSI wanted to start collecting $50/year per domain name for "maintenance" of the databases. AT&T apparently doesn't need any more money to maintain the servers... It's been estimated that NSI is collecting roughly $13 million each year for this, in addition to the money that the taxpayers give them for the *wonderful* job they do. (Let's make no mistake here, I support the folks at the InterNIC help desk 1000%. NSI's management on the other hand, seems a bit confused... At best.)

Recent reports in the newsgroup comp.protocols.tcp-ip.domains are that NSI is now threatening to cut off an unspecified number of domains for non-payment of the new fee. Problem is, NSI never billed them, the phones are always busy, and you can't get a fax through. I hope they get this fixed before they're hit with dozens of lawsuits from angry domain name holders.

So far, no one (that we know of) has ever hit the NSF or NSI with a Freedom Of Information Act (FOIA) request for data relating to domain name disputes, domain name sales, or actual figures on how much it's costing them to maintain the InterNIC databases. No one has ever gotten the current Federal Acquisition Regulations out and looked to see if NSI is obeying the laws that all government contractors must abide by. Congress has never looked into this mess. You won't hear the presidential candidates talking about this one. The US Patent & Trademark office tries to stay out of it. No one wants to address these issues. Maybe we should start complaining to some of these folks, since they all work for us. Check out the Congressional web site, you can email a lot of them now.

How does all this relate to Clue Computing V. NSI? Well, Hasbro (the most litigious game & toy manufacturer on the planet) objected (after two years of operation) to my domain name, clue.com. They spent the $.32 to send a letter to NSI. I tried negotiating with both Hasbro and NSI (After a few phone calls and letters, neither will speak to me or my attorney.), I even offered to sell my domain name, but they aren't interested. Why should Hasbro pay me for this valuable commodity, when they can have NSI take it from me by force, and it won't cost Hasbro more than a few dollars to pay the lawyer to write a letter to NSI? Hasbro will lose nothing, but it'll cost NSI and Clue Computing, Inc. thousands of dollars as we fight the war that Hasbro started.

So, with all other options exhausted, I was forced to sue NSI, just days before they took my domain name away from me and put me out of business altogether. (Why altogether? Well, I do about 80% of my marketing, booking, and service delivery over the 'Net, via clue.com. Many of my customers would leave me if they couldn't find me, or perceived that my business is unstable. I wouldn't blame them a bit.)

For those of you with a keen appreciation of irony, NSI has hired Holm, Roberts, and Owen as their local counsel. HRO is a client of Clue Computing...

Want to see all the legal papers we've filed so far? Here they are:

Clue Computing, Inc. is represented by the very classy Philip Dubois. If the name sounds familiar, it's because Phil defended Philip Zimmerman in the PGP fiasco. I didn't think he'd take this on, and I'm glad I was wrong.

Stop by again. We'll keep updating this page with all the details as they happen.

In the meantime, you may also want to check out some other sites with similar problems:

Or, you can send Clue Computing, Inc. some email, and tell us what you think of all this.

Last Updated 10 July 2000