Disputed '.biz' domain names are activated


The first set of names registered in the new top-level domain '.biz' became active on October 1. The operator of the '.biz' registry, NeuLevel, used a novel process to allocate domain names. Rather than dole the names out on a first come, first served basis, NeuLevel allowed multiple applications for each name. Names that were requested by only one applicant were awarded at the application cut-off date. Names that were requested by multiple parties were to be awarded randomly to one applicant. NeuLevel charged $5 per application and encouraged applicants to submit multiple applications for each name.

Prior to the launch, Derek Newman, a Seattle-based attorney, filed a class action suit to halt distribution and activation of this second group of '.biz' names. His suit claimed that NeuLevel's random allocation of contested domain names constituted an illegal lottery. In the last week of September, a California state court judge held that the first batch of names - those for which only one application was submitted - could go live on October 1. However, the judge reserved judgment on the 53,000 domains for which there were multiple applications from going live and required NeuLevel to deposit $3 million with the court to cover the possibility of refunding the $2 application fee NeuLevel collected from the 1.5 million applications received for those 53,000 domains.

Newman said he filed his suit to prevent NeuLevel from exploiting applicants. NeuLevel, however, said that Newman's allegations were patently untrue. The company claimed that it had lost a significant amount of money building the '.biz' system and had not made any profit from the domain allocation process.

The clutch of disputed web addresses have now been cleared to go live after the injunction freezing those domains dissolved.

Douglas Wood and Linda Goldstein, Hall Dickler Kent Goldstein & Wood LLP, New York

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