Patent is for method of registering and using IDNs.
The U.S. Patent and Trademark Office has granted U.S. patent number 7,774,432 to VeriSign for
Registering and using multilingual domain names. The patent application was a continuation of a 2001 application that was abandoned, and a provisional application from 2000. This particular application was filed in 2007.
The abstract for the patent sums it up:
A method, system, and computer-readable medium are described for registering and using multilingual domain names that include characters outside the ASCII character subset supported by the DNS system. Such multilingual domain names can in some situations be registered by first being converted into appropriate ASCII-Compatible Encodings (ACEs) that represent the corresponding multilingual domain names and that use only characters within the ASCII character subset. In addition, a variety of binary variants may be generated at registration for each multilingual domain name and then used as equivalents for the multilingual domain name, such as by storing the variants in the registry as alternative domain names or by otherwise reserving the binary variants. When requests to resolve such a registered multilingual domain name into a corresponding IP address or URL are received, the stored binary variants and/or ACE information can then be used to respond in an appropriate manner.
You can view the patent here (pdf).