Second Circuit Upholds Preliminary Injunction Barring Query and Use of WHOIS Information in v. Verio

Register was appointed by ICANN to serve as one of more than fifty companies that issue domain names for websites. In addition, it sells its own web-related services. Domain name registrants must submit to Register contact information including at least a name, postal address, email address, and telephone number. This so-called “WHOIS information” must be maintained and made freely available for public query by Register, according to ICANN terms. ICANN mandates that WHOIS information in general may be used for “any lawful purposes,” but excepts use to “support the transmission of mass unsolicited, commercial advertising or solicitations via email (spam).” ICANN also requires domain name registers to agree not to impose additional terms on public use.Register devised a legend that accompanied each query result retrieved from its WHOIS database, which read: “By submitting a WHOIS query, you agree that you will use this data only for lawful purposes and that under no circumstances will you use this data to . . . support the transmission of mass unsolicited, commercial advertising or solicitation via email.” Register did use its WHOIS information to advertise its own web-related services, and those of affiliates, however, it allowed registrants to opt into or out of its solicitation list at the time of registration.

In order to target consumers for its own web-related services, Verio designed a software robot to repeatedly query and extract information from the WHOIS databases maintained and updated daily by Register and other domain name registers. It contacted registrants through email, a use expressly prohibited by ICANN terms, as well as by telephone calls and direct mailings, which were not addressed by ICANN. Some solicitations to Register registrants made explicit reference to Register, leading to confusion about their source. Registrants who had used Register’s opt-out option complained, and in response, Register adopted a new legend prohibiting use of information for “advertising or solicitations via direct mail, electronic mail, or by telephone” and demanded that Verio cease and desist its solicitations. Verio stopped its emails but continued to make telephone calls and direct mailings, claiming that Register could not create WHOIS information use terms in excess of those set by ICANN.

In December 2000, the district court entered a preliminary injunction barring Verio from: (1) using trademarks owned by Register; (2) representing or implying that it is sponsored, endorsed, or approved by Register; (3) using queries by automatic software programs to access Register’s database of contact information in violation of its terms and conditions; and (4) soliciting sales by any means from domain name registrants (excepting existing customers) whose contact information had previously been extracted from Register’s database.

The Second Circuit found no abuse of discretion by the district court. While it agreed with Verio that Register had likely contravened the ICANN terms by imposing additional restrictions on WHOIS information use, it accepted Register’s argument that this “was[] a matter between itself and ICANN,” which could not be enforced by Verio because it was not a third-party beneficiary of the contract terms between Register and ICANN. ICANN had intervened as an amicus curiae in the district court, supporting Register’s position and arguing that “proper expression of the letter and spirit of ICANN policies [are] most appropriately achieved through the ICANN process itself, and not through forums that lack the every day familiarity with the intricate technical and policy issues that the ICANN process was designed to address.” ICANN also cited the reliance interests of registers who had agreed to the terms with the expectation that enforcement would be executed by ICANN. The court rejected the arguments of a dissenting district court judge who had maintained that equitable relief should be withheld due to public policy concerns, the “indisputable obligations” of Register to ICANN, and Register’s “unclean hands” in contravening the ICANN terms.

Verio also argued that the legend was not binding on it because it appeared only after a query had been conducted and results retrieved. Thus, the legend gave no advance notice of the terms imposed on the query itself. The court held, however, that given the volume of its queries, Verio had actual knowledge of Register’s terms—at least after its first query—distinguishing its case from others invalidating late formation software contracts, assumed by the court to involve “one time” purchases. The court also declined Verio’s argument that it had not expressly “agreed” to the legend terms.

Finally, the court held that, contrary to Verio’s claims, Register had shown sufficient danger of irreparable harm to support issuance of injunctive relief. This harm was threefold: (1) injury to Register’s reputation, good will, and business opportunities; (2) diversion, overload, or harm to Register’s system resources resulting from the trespass on its chattels by Verio’s software robots; and (3) likelihood of consumer confusion resulting from the particular nature of Verio’s solicitations.

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