Verisign, the $7.5
billion .com domain gorilla, has sued upstart XYZ.com and CEO Daniel Negari for
disparaging .com and allegedly misrepresenting how well .xyz is doing.
It’s the biggest
legacy gTLD versus the biggest (allegedly) new gTLD.
focuses on some registrars’ habit of giving .xyz names to registrants of .com
and other domains without their consent, enabling XYZ.com and Negari to use
inflated numbers as a marketing tool.
The Lanham Act
false advertising lawsuit was filed in Virginia last December, but I don’t
believe it’s been reported before now.
Verisign’s beef is
first with this video, which is published on the front page of xyz.com:
Verisign said that
the claim that it’s “impossible” to find a .com domain (which isn’t quite what
the ad says) is false.
The complaint goes
on to say that interviews Negari did with NPR and VentureBeat last year have
been twisted to characterize .xyz as “the next .com”, whereas neither outlet
made such an endorsement. It states:
statements, when viewed together and in context, reflect a strategy to create a
deceptive message to the public that companies and individuals cannot get the
.COM domain names they want from Verisign, and that XYZ is quickly becoming the
As regular readers
will be aware, .xyz’s zone file, which had almost 785,000 names in it
yesterday, has been massively inflated by a campaign last year by Network
Solutions to push free .xyz domains into customers’ accounts without their
It turns out
Verisign became the unwilling recipient of gtld-servers.xyz, due to it owning
the equivalent .com.
Verisign, Negari has used these inflated numbers to falsely make it look like
.xyz is a viable and thriving alternative to .com. The company claims:
Verisign is being
injured as a result of XYZ and Negari’s false and/or misleading statements of
fact including because XYZ and Negari’s statements undermine the equity and
good will Verisign has developed in the .COM registry.
XYZ and Negari
should be ordered to disgorge their profits and other ill-gotten gains received
as a result of this deception on the consuming public.
makes reference to typosquatting lawsuits Negari’s old company, Cyber2Media,
settled with Facebook and Goodwill Industries a few years ago, presumably just
in order to frame Negari as a bad guy.
Verisign wants not
only for XYZ to pay up, but also for the court to force the company to disclose
its robo-registration numbers whenever it makes a claim about how successful
everything. Answering Verisign’s complaint in January, it also makes nine
affirmative defenses citing among other things its first amendment rights and
Verisign’s “unclean hands”.
While many of
Verisign’s allegations appear to be factually true, I of course cannot comment
on whether its legal case holds water.
But I do think the
lawsuit makes the company looks rather petty — a former monopolist running to
the courts on trivial grounds as soon as it sees a little competition.
I also wonder how
the company is going to demonstrate harm, given that by its own admission .com
continues to sell millions of new domains every quarter.
But the lesson
here is for all new gTLD registries — if you’re going to compare yourselves to
.com, you might want to get your facts straight first if you want to keep your
legal fees down.
And perhaps that’s