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ICANN Explains Why Judge Should Dismiss VeriSign's Lawsuit

In a 33-page motion filed on Monday, April 5, 2004, ICANN has asked a federal judge in Los Angeles to dismiss VeriSign's recent lawsuit filed against the non-profit organization. More specifically, the filed motion has asked the court to "dismiss VeriSign's first six claims for relief with prejudice," which are:

- Violation of section 1 of the Sherman Act [antitrust]
- Breach of contract
- Damages for breach of contract
- Interference with contractual relations
- Specific performance of contract and injunctive relief
- Damages for breach of contract

The following is a direct excerpt from the introductory section of the motion [PDF]:

"This is a dispute about the interpretation of a contract, which VeriSign's seventh claim for relief appropriately seeks to resolve (at least in part). The first six claims, by contrast, seek to impose liability upon ICANN merely because ICANN reads the parties' contract differently than VeriSign does. Disagreeing with VeriSign is neither an antitrust violation nor a breach of contract, and thus none of the first six claims has merit.

First, none of the first six claims is ripe because they all rest on the assumption that ICANN's interpretation of the contract is wrong. Because that is the issue presented by the seventh claim, and because if ICANN is right none of the first six claims has any merit, these claims should all be dismissed and be addressed only when and if VeriSign's interpretation of the contract is authoritatively established to be correct.

Second, all of the claims rest on the assertion by ICANN of: (a) its interpretation of the contract, and (b) its stated intention to utilize the dispute resolution mechanism of the contract if VeriSign did not accept that interpretation. As a matter of law, such actions cannot violate the antitrust laws or amount to a breach of contract. VeriSign has always been free either to seek a judicial resolution of those disagreements, as the contract provided it could do, or to act in accordance with its own contract interpretation. VeriSign's voluntary actions to respond (on some but not all occasions) to ICANN's contract interpretation, as if it were correct, does not form the basis for any claims against ICANN.

Third, there are significant problems with many of the individual claims. For example, the first claim, for violation of the antitrust laws, does not sufficiently allege any of the necessary elements of an antitrust conspiracy. VeriSign has not (in its one conclusory paragraph (85)) sufficiently alleged that there is an antitrust conspiracy, that there has been any injury to competition, that it has antitrust standing, or that it has sustained antitrust injury. The notion that ICANN is scheming to injure VeriSign is particularly ironic in view of the fact that ICANN has been successfully defending lawsuits brought in this Court in order to protect VeriSign's ability to offer one of the services — the so-called "Wait Listing Service" or "WLS" — that VeriSign now alleges ICANN is conspiring to prevent.

...The first six claims should be dismissed."

The legal ramifications of this ICANN/VeriSign case were recently discussed with Jonathan Weinberg, Professor of Law at Wayne State University here on CircleID.

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