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The company known for creating the "love bug" is currently involved in a heated domain name dispute and this week took its case into court, countersuing the owner of VW.net to gain control of the domain after he sued to keep it.

Virtual Works Inc. is a Virginia network service provider and Web site designer that registered the VW.net domain in 1996. Upon learning of the domain in January, Volkswagen of America Inc. and its parent German company, Volkswagen SA, tried to implement a cease and desist order, claiming that Virtual Works President James Anderson is a cybersquatter and violated Volkswagen's trademark.

Volkswagen filed suit this week its countersuit in Virginia federal district court, alleging that Virtual Networks tried to extort the company and commit cyberpiracy by threatening to sell the VW.net domain "to the highest bidder."

Virtual Works argued that it is not violating any laws by registering the domain name, and said that its claim to the domain is justified.

"Well I think applying just textbook intellectual property law to the circumstances here, there's no likelihood that someone that comes upon the VW.net Web site will confuse that in any way with Volkswagen of America," said William Bode, a lawyer representing Virtual Works.

"Volkswagen of American already owns the commercial address, which is VW.com. . .The .net nominclature is reserved for Internet service providers like Virtual Works, so simply stated, Volkswagen of America has no entitlement to VW bonifiding, chosen and used domain name."

Domain name dispute is a vague area of litigation, in which traditional trademark law does not always apply. David J. Loundy, an attorney with D'Ancona & Pflaum in Chicago, said that each case is unique, and this one won't be an easy one to rule on.

"These are the hardest kinds of cases, because the way the cases have been decided is often based on the judge saying, 'one of these people is a bad actor. . .and I'm going to see that the conduct is stopped,'" said Loundy. "Here, it's not so clear that the service provider is a bad actor. If they have been operating for years under this domain name, which is shorthand for their legitimate business name, which they have every right to use, they have a reasonable defense."

"The difficult part becomes the dilution claim. . .Then you would have to look at how many other people are using the mark, all of those sorts of factors that go into whether or not there's a liklelihood of dilution and how strong is the VW mark."