Enforcement of the ICANN Agreement
Verio argued that Register was not allowed to forbid the use of the WHOIS data for direct mail or phone solicitation because the ICANN Agreement specifically said the data must be available for any lawful purpose other than email spam. However, Register countered that argument by stating that the Agreement was between Register and ICANN, and Verio had no right to enforce it. Furthermore, the Agreement specifically stated that it created no obligations to third parties.
In an amicus brief (a brief by a non-party offering to the court additional points of view), ICANN itself weighed in on the case and advocated strongly for Register.[3] It pointed to the dispute resolution processes it had in place for similar cases of which Verio refused to make use. It also stressed that the "no third party" clause was an essential part of its policies. Finally, ICANN pointed out that decisions about ICANN policies were best resolved by them, rather than a court that is not familiar with the technical issues.
The court agreed with ICANN's and Register's arguments. Because of the "no third party" clause, the Agreement could not be enforced by Verio. Furthermore, the court agreed that technical issues can change quickly and are therefore best resolved by ICANN, which is why they included the "no third party" clause in the Agreement.
Browsewrap License
Verio argued that the terms of use were not enforceable because the contract terms regarding the permissible uses of the data did not appear until after the transaction was completed. Verio relied on two previous Internet "browse wrap" cases as precedent. In Specht v. Netscape Communications Corp., the court refused to enforce a click-through license because a contract requires that both parties agree to the terms and the website did not ensure that the users had read and agreed to the terms. In Ticketmaster Corp. v. Tickets.com, Inc.,[4] the court held that a contract was unenforceable because the website did not have a check box to signify that the user specifically agreed to the terms.
The court rejected Verio's arguments regarding the timing of the statement. It stated that although the terms may not have been enforceable on the first query, Verio would have been aware of the terms before making all subsequent queries and the terms were therefore enforceable. The Netscape case was distinguishable because in that case the users only engaged in the transaction once and therefore never received proper notice of the terms. Verio was made aware of the terms with each query, albeit it at the end of each one. The court also gave little weight to the Ticketmaster case because that case only involved a preliminary injunction. The court went even further, stating that it did not agree with the Ticketmaster outcome. The court argued that a check box was not necessary because the Restatement of Contracts says that even silence can be considered assent to a contract as long as the user knows about the terms, has an opportunity to refuse the service, and still took the benefit of the service.
Trespass to Chattels
Trespass to chattels is a tort in which one interferes with someone's personal property in a way that would cause harm. Register invoked this law, claiming that Verio's automated queries were harming its computers. Verio claimed that Register had not shown evidence of any damage or that the access was unauthorized. The Court of Appeals relied on the findings of the lower court in the matter of harm. The District Court had determined that the automated queries would inevitably lead to other companies doing the same, and hence cause Register's systems to crash. As for the authorization, the court ruled that Register's complaints to Verio were enough to serve as notice to Verio that its access was not authorized.
Trademark Infringement
Trademark infringement cases require evidence of consumer confusion. The court ruled in favor of Register here as there was direct evidence that consumers had been confused by the emails that made reference to their recent transaction with Register.com. Furthermore, the court ruled that the script of the telemarketing calls was also misleading.
This finding under s 43(a) of the Lanham Act was subsequently reversed and removed from the injunction sought by Register.com. It was stated that "because Verio's telemarketing script did not contain a misleading description or representation of fact, that constituted actionable conduct under the Lanham Act, and because Register.com did not demonstrate a likelihood of success on the merits of this claim," the court had no option but to remove this from the injunction.
