Company files information with SEC regarding legal setback.
Shortly after receiving an adverse decision in appeals court last week regarding an anti-trust lawsuit, VeriSign filed an 8-K with the SEC explaining the opinion. The disclosure summarizes changes to the court’s original order, and says the allegations are without merit:
On July 9, 2010, the U.S. Court of Appeals for the Ninth Circuit (the “Courtâ€) issued an order (the “Amended Orderâ€) which amends its June 5, 2009 order (the “Original Orderâ€). The Original Order had reversed and remanded the district court’s dismissal of the second amended complaint filed by plaintiff Coalition for ICANN Transparency, Inc. (“CFITâ€). The Amended Order denies VeriSign’s motion for rehearing and rehearing en banc and again states that Plaintiff CFIT’s complaint, assuming its material allegations to be true, plead plausible claims against VeriSign under Sections 1 and 2 of the Sherman Act in connection with the 2006 .com registry agreement. The Court was reviewing matters of law at this stage as opposed to fact and, at this stage of the pleadings, is required to assume that all material allegations are true for purposes of assessing whether a valid claim has been plead. The amended opinion changes in two respects the Court’s earlier decision. First, the Court amended its opinion by explaining that, for purposes of reviewing the sufficiency of the complaint, it was not considering the role of the U.S. government in the 2006 .com registry agreement. The Court noted that “while CFIT stated plausibleâ€ claims, “provingâ€ its claims “may be difficult in light of the amendments made by the Department of Commerce to its Cooperative Agreement with VeriSign,â€ in addition to the government’s role in connection with the provision of registry services. Second, the amended opinion changes the earlier decision by explaining that “competitive bidding is not requiredâ€ as a predicate to complying with the antitrust laws. “So long as the agreement is the result of independent business judgment, is not the result of an intention to restrain trade, or does not actually injure competition, it is immaterial whether it was secured through a competitive bidding process.â€
For a description of the procedural history of this litigation, see VeriSign’s most recent Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 28, 2010.
Unless VeriSign seeks and is granted further appellate review, the case will be remanded to the district court for proceedings, likely within 90 days. While the Company cannot predict the outcome of these proceedings, it believes the allegations against it are without merit and intends to vigorously defend against them.
The lawsuit was filed mainly for two reasons: stop VeriSign from introducing its own waitlisting service for expired .com’s, and force some sort of competitive tender for managing .com. The waitlisting service was long ago shelved.