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DirectNIC chief tries to dismiss cybersquatting suit

Kevin Murphy, November 11, 2010, 15:27:55 (UTC), Domain Registrars

The CEO of DirectNIC is trying to wriggle out of a cybersquatting lawsuit filed by Verizon, seemingly on the grounds that the telco has been unable to track him down.

Sigmund Solares heads up the Grand Cayman-based registrar and lives in Florida, but since suing DirectNIC back in March, Verizon has not been able to find him to serve him notice.

Now, his lawyers are arguing on a technicality that the suit against him should be dismissed (pdf).

Verizon claims that DirectNIC and its directors, via a bunch of shell companies, cybersquatted “nearly every single famous trademark in existence”, including some of Verizon’s.

It filed an amended complaint (pdf) a month ago. Due to its inability to track down Solares, it served the Florida Secretary of State instead, which it’s allowed to do if the defendant evades service.

Verizon has filed a number of declarations from process servers who were unable to serve him, despite staking out his Tampa home on at least 10 occasions over the space of several months.

Solares’ lawyers now want the complaint against him dismissed on the grounds that he’s not been served, and that he was not evading service, he was just away on business and vacation:

no where in the Plaintiffs’ affidavits do the Plaintiffs allege any actions whatsoever on the part of Mr. Solares. The Plaintiffs’ complaint and affidavits merely recount their efforts to serve Mr. Solares. Such allegations cannot clearly show that Mr. Solares is evading process because they allege no actions on his part at all. Plaintiffs’ assertions only show Mr. Solares’ absence from Tampa during the periods when the Plaintiffs attempted to effect service of process.

In response, Solares has filed a fairly detailed account (pdf) of his whereabouts between March and September, which included trips to Milan, Miami, Aruba, Ireland and Boston.

Some of the dates and locations coincide with big domainer conferences.

Verizon’s complaint attacks DirectNIC on essentially two fronts.

It claims that DirectNIC’s practice of parking expiring domains – including those that infringe trademarks – constitutes cybersquatting. This is of course a fairly common industry practice.

It also claims that DirectNIC itself cybersquatted on thousands of domains via a number of shell companies, including NOLDC, Spiral Matrix, Kenyatech, Kentech, Speedy Web, Unused Domains, and Belize Domain WHOIS Service.

There’s a fair bit of circumstantial evidence connecting the firms, and UDRP panelists have previously inferred that they shared ownership, but I don’t think it’s ever been definitively proved.

I reported on this evidence in a bit more depth here.

It’s possible that more evidence could emerge during discovery, but the suit cannot proceed to that stage while the court is still figuring out whether Solares has been served or not.

Dell previously sued DirectNIC on the same grounds. Solares signed an affadavit denying he had anything to do with Kenyatech. That suit was settled.

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Comments (1)

  1. The evidence is hard to find but I can prove it to be true…

    Sigmund, Michael, Noah, Matt, etc started their early internet careers in porn and free hosting. This lasted many, many years and made them millions. As they expanded they built systems to keep track of their domains and decided to start a domain registrar. They also started paid hosting, parking, etc companies. At some point they realized they had the perfect setup for cybersquatting. They had systems that could identify and then purchase profitable expired domain names which they could purchase cheaply through DirectNic, park at Parked and wait until someone wanted to buy it back through NOLDC / Kenyatech / Belize. They did a horrible job with NOLDC and left easy to follow trails all over the place. Kenyatech was much better hidden but when you have one of your designers working on and displaying the Kenytech logo, among other mistakes, it’s easy to track. Belize is an even better coverup but again, they left a trail to follow which I won’t mention yet as I’m still getting information from the source.

    And there is much more as well. If anyone is interested in hearing more, just contact me!

    Oh and the Dell case was settled with Sig and company paying Dell a tidy seven figure sum.

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