When early registration opened up for the new dot-biz domain, David Scott Smiley, a Phoenix, Arizona, disc jockey, was ready to snag a choice piece of online real estate.
Smiley, a local radio host who runs a disc jockey business on the side, decided he wanted to apply for the domain names dj.biz and radio.biz. Although he knew there might be stiff competition for the domains, he figured it was worth a try.
But as he began look into the registration process, Smiley's lawyer says, his client noticed something that bothered him. The registration sites he looked at encouraged customers to submit multiple registrations, for a few dollars each, to improve their chances of getting a popular domain.
The only trouble, however, was that no one would say how many other applications were already in place for the same domain. Therefore, Smiley couldn't gauge his chances of getting the site he wanted.
According to Smiley's lawyer, Derek Newman, the business practices his client encountered were "not fair and not legal."
"If he knew what his chances were, he'd have a better idea of how much he should spend," said Newman, a Seattle attorney whose last prominent case involved defending a company that wanted to webcast Timothy McVeigh's execution. Now Newman is getting the courts involved in Smiley's dilemma.
In a class action lawsuit filed this week in Los Angeles Superior Court, Newman is charging that Internet regulators, the company managing the dot-biz domain and a list of more than 30 individual registers are conducting an illegal lottery for valuable online property.
The suit, filed on behalf of Smiley and another plaintiff, Skyscraper Productions -- a Glendale, California, company that runs an online traffic school, comic book and video business -- seeks an injunction against what it calls the dot-biz domain lottery. The suit also asks the court to order the defendants to return "wrongfully gained monies" to domain registrants.
NeuLevel, the company that is administering the rollout of the dot-biz domain, said it believes the lawsuit is without merit and "has been filed in an attempt to derail the successful introduction of dot-biz."
The Internet Corporation for Assigned Names and Numbers (ICANN), the Internet's chief regulatory body, also said it believes the suit is without merit but did not provide further comment.
However, the lawsuit has attracted plenty of attention from those who follow the intricacies of domain-name law, setting discussion aflutter on ICANN-related discussion groups.
A key concern, said Martin Schwimmer, a trademark lawyer specializing in domain issues, is that companies may be spending vast sums on multiple registrations because they are scared of not getting the dot-biz domain they want.
Although companies have some legal recourse when it comes to securing a domain with their trademarked name, other terms are up for grabs. Competition is also fierce for names that have more than one trademark holder.
While no one knows how popular dot-biz addresses will actually be, it appears that many domain-name applicants may be girding for something similar to the dot-com gold rush. At the height of the dot-com investment mania, buyers were paying hundreds of thousands and sometimes millions of dollars for catchy dot-com addresses.
For dot-biz, sorting out the legal mess could be problematic, since NeuLevel is scheduled to take the domain live on Oct. 1. Already, the number of pre-registrations for dot-biz domains numbers well over 1 million, and it's growing rapidly.
NeuLevel's plan is to dole out dot-biz addresses based on random drawings, with a procedure in place for trademark holders to seek control of domains through arbitration.
Newman's argument for why the dot-biz rollout process is illegal is twofold. First, he says, lotteries are illegal under U.S. state laws, with the exception of state lotteries and some raffles for charity. Secondly, offering people chances of wining a good domain, but not telling them what the odds are is an unfair business practice.
Although there's no rule barring individual registrars from telling customers how many applicants have put in a request for a particular domain, it's not their practice to do so.
Registrars that are also publicly traded companies, including VeriSign and Register.com, have stated in the past they don't disclose dot-biz application numbers because they perceive this as privileged financial information.
Even if the registrars did disclose the odds of winning a particular dot-biz domain, however, it might not help Smiley's chances with dj.biz. According to ICANN, the dot-biz domain doesn't accept two-letter Web addresses.
