Judge explains why he dismissed Verisign’s lawsuit.
Judge Claude M. Hilton has issued his reason for granting .XYZ’s motion for summary judgment in a battle with .com giant Verisign.
The judge granted the motion for summary judgment on October 26. In an opinion released today, Hilton said that .XYZ’s and Daniel Negari’s statements were a combination of fact, opinion and puffery.
For example, saying “all the good real estate is taken” is merely an opinion.
The video comparing a shiny Audi as .xyz to a beat up car as .com was merely puffery and opinion, he ruled.
I suspect Verisign will disagree with how Hilton determined that most .com domain names are taken:
Further, according to Plaintiff’s own data, .com names are largely unavailable. In a given month, Plaintiff reports that it receives about 2 billion requests to register .com domain names, yet fewer than 3 million are actually registered. Most of the requests fail because the requested .com name is unavailable. 3 million out of 2 billion is less than 1%; thus, more than 99% of .com names are unavailable.
Verisign argues that the majority of domain names are still available, which is true…if you want ljksljfkdlskf8-k24jlj.com.
The decision also gave a bit more detail about .XYZ’s deal with registrar Network Solutions. It confirms that Network Solutions bought 375,000 .xyz registrations for $3 million in return for .XYZ buying $3 million worth of advertising from the registrar.
Hilton seemed to accept that using this money in statements that.XYZ had a “multi-million dollar marketing budget” was fair.
The judge also said that, even if statements were false, they were not material:
“Plantiff cannot establish the causal connection between the alleged false statements and damages to Plaintiff. Plaintiff’s own data shows that .com registrations actually increased after Defendants’ statements.”
Verisign also argued that a fall in .Net registrations was tied to .XYZ. Hilton said the timing of .net’s fall showed correlation, but not causation. .Net was also affected by the rollout of hundreds of new TLDs and changes to Verisign’s marketing. .Net was also falling before .XYZ made its statements.
The full decision is available here.
Joseph Peterson says
Pity the charges of false advertising couldn’t be made to stick. That’s the only part of the lawsuit that I cared for.
jennifer says
I agree Joseph. You are soo Right! Thanks for the in depth article
Rob Bernstein says
@JP
The false advertising charge was the only claim in the lawsuit. Looks like the judge even specifically ruled that XYZ said nothing false whatsoever.
Joseph Peterson says
Yes, I phrased that pretty badly. Dumb. What I meant was …
Verisign and .XYZ were in 2 different lawsuits that covered several things:
1. Back-end registry services for .THEATRE, .SECURITY, etc.
2. .XYZ’s claims harming Verisign.
3. .XYZ making an ad involving an old clunker and a sports car.
4. .XYZ making claims about all good .COMs being taken.
5. .XYZ making claims about its registration volume.
6. .XYZ claiming that NPR and VentureBeat called it “the next .COM”.
My position was / is as follows:
1. Didn’t care.
2. Unsure. But I doubt .XYZ made much of a dent in Verisign’s .COM registrations. After all, .XYZ mainly just stuffed garbage into people’s accounts without stopping to ask them if they wanted it. Maybe .NET was affected for awhile, but it’s debatable whether .XYZ is specifically to blame … and impossible to quantify with confidence. So I’m inclined to side with .XYZ.
3. Sided WITH .XYZ. No big deal.
4. Sided WITH .XYZ. Although I think plenty of good .COMs remain available, I find it perfectly acceptable for competitors to emphasize the lack of availability – even in an exaggerated way. It was always clear to me that .XYZ was just engaging in puffery in this area. False or not, those claims weren’t grounds for a lawsuit, in my view.
5. .XYZ did engage in false advertising, in my opinion.
6. .XYZ did engage in false advertising, in my opinion. I’ve dissected this NPR claim a few times. Again just now over at TheDomains.
So what I meant was that I only cared about items 5 and 6.
jennifer says
The thing is almost all .com’s are still available. Just not neccesarily through the registries. Most Good domain names are actually still for sale, just at a premium price. So there is definately room for a valid arguement on that statement. Reguardless of the lawsuit outcome Negari and Network Solutions will never be looked at the same way by most domainers. So I hope they made there millions selling BS. Rightfully so because insiders know exactly what went on there ..
Acro says
So. Yesterday’s sentiment was “buy Verisign stock.” After today’s news, what is your long term prediction?
Andrew Allemann says
Just to be clear, it wasn’t my belief that you should buy Verisign stock. I was just showing reasons for and against it.
This lawsuit and the result is trivial to Verisign, at least for the legal costs.
jennifer says
I would rather have a 20 character .com than a single
character .XYZ domain! lmao Personally, I thought the
advertising comparing .xyz as the next great thing was
a bit over the top — and certainly the comparisons to
.com were more or less a joke and very unfair to verisign.
The domain business is a hard industry but it still is
possible to make money without slandering your
competiton thru false advertising. Right?
To me I think the only real chance the industry has to
survive long term is to start fully backing .com once more
and step away from all of these crazy unusable .tlds
and other weird extentions. Not a single one have I ever
seen developed into a great site either for what it’s worth
which is a good predictor of the future of . tlds Im guessing.
Joseph Peterson says
@Jennifer,
I’m more optimistic about TLD variety than you are, eve if I do prefer .COM much of the time.
With regard to this lawsuit, I’ve always tried to focus attention on the charges: false advertising by .XYZ. The question of .COM versus nTLDs wasn’t being considered by the court. It’s quite separate.
steve brady says
Jennifer, If you decide to change your mind, it won’t make much of a difference if you haven’t already diversified with a few early gtld registrations.
The major business papers and magazines didn’t do their subscribers any favors repeating articles about .BIKE for over a year while the first million registrations of .XYZ’s took place. The day Google bought Abc.XYZ, every anchor on FoxBusiness was glaring at their staff in disbelief, “Why am I hearing about XYZ for the first time on live television?” Their lead investment reporter, the only question she could think of was, “So even I can get on the Internet and register one of these new XYZ domain names that Google just bought?” The mainstream media will continue to cause Anxiety with late-breaking scoops, because when the train left the station in 2014, readers were told to go ride a bike.
Saying the industry has no real chance of surviving long term unless it steps away from unusable top level domains, is a little extreme. Did you hear about sun.flowers? It’s success is a foregone conclusion, because the company applied a great new domain to an already fully-embedded retail distribution structure.
Jennifer says
I totally hear you guys but I have to be honest thats just how I feel.
I think .com was a once in a lifetime investment opportunity, and it
wasnt even apparent until most of the good names were taken many
years later just how big of an opportunity it was to most people.
Some success’s I think just cant be duplicated again so easily.
Everyone (even me!) would like to think there is another goldmine
.com type opportunity out there but frankly I just cant convince
myself that if there is atleast when it comes to .xyz etc
I think the only chance the new .tlds have is if the development side
takes off and people actually begin DEVELOPING and using their
websites like say Google did.
If there are 1 million .xyz registrations and only a handful are developed
and the rest are just parked pages, I dont know how anyone can be
convinced they are gonna be the next great thing without alittle help.
Same goes for country code domains as well. For what it’s worth I
used to think that .co was gonna be the next huge opportunity, but
that still hasnt panned out unless you are into typos. I wish everybody
the best of luck that are investing in .xyz etc though but as a very
modest domain investor Im just not sold yet.
jennifer says
Yes, I understand but in the beginning of XYZ’s advertising campaign they were attempting to compare themselves to basically being the next .com while at the same time insulting .com in their comparisons with the car analysis etc. which
I thought was kinda ironic.
The other stuff was just my little opinon of course, everyone is entitled to their
opinon right? The whole .XYZ thing is now a bore to me.
Joseph Peterson says
@Jennifer,
Yes, I respect your opinion.
Personally, I’ve been attacked recently on this topic; so I wanted to emphasize what my own opinion is not, simply to preempt further attacks by trolls. It’s 200% okay that your opinion differs from mine.
Toney says
the success of sun.flowers is a forgone conclusion
Bold statement
The only forgone conclusion I draw from that story is that Is that the owner Of sunflowers dot com is the happiest/luckiest guy in the world
Anticareer says
“The decision also gave a bit more detail about .XYZ’s deal with registrar Network Solutions. It confirms that Network Solutions bought 375,000 .xyz registrations for $3 million in return for .XYZ buying $3 million worth of advertising from the registrar.”
So he was blowing a horn and posting the video online for all the registrations he was getting while we finally have confirmation (of the most obvious thing we all knew). Goes to show what type of guy this is.