Volkswagen Loses First Round in Domain Dispute

In another David-versus-Goliath court battle, a Virginia judge set another
precedent for small companies by favoring Virtual Works’ domain name registration over
the Volkswagon trademark.


U.S. District Judge Claude Hilton last week refused to grant an injuction
to Volkswagen that would force Internet company Virtual Works from using
the vw.net domain address.


The judge found that Volkswagen was not demonstrating “irreparable harm,”
effectively invalidating Volkswagen’s cease and desist order which was
based on an Network Solutions (NSI) statute related to trademark status.


Virtual Works had counter-filed for entitlement of the domain name, and
sought damages from NSI for changing its dispute policy to favor trademark
holders. It also sued Volkswagen for interfering with its contract with
NSI. In further domino-effect filings, NSI called for a dismissal of the
charges, which the court granted.


Virtual Works attorney William Bode welcomed the overall decision, but said
that the claims against Volkswagen for interference and against NSI for
breach of contract should not have been dismissed.


Virtual Works plans to conduct research to establish whether there is
market confusion regarding the two names, as part of its defense against
the continuing battle with Volkswagen.


However, Virtual Works’ Chief Executive Officer James Anderson doesn’t have any delusions
regarding the future war which may be waged over the domain name.


“This certainly isn’t the end of this. VW is going to continue to pursue
us, they’re going to be suing us for trademark infringement, we’re going to
have to defend ourselves against them yet,” said Anderson. “It’s going to
be an ongoing battle, and there’s only so much a small company can take.”


“I wonder how many years VW can drag this out,” he added. “In the end,
they’ll probably win because they have the resources.”


Meanwhile, he concluded, someone has to pay for the legal expenses, lost
clients, and lost partners that Virtual Works claims are casualties of this
battle.


“It’s a fire we didn’t start, but at least now we’ve put it out,” he said,
summarizing his response to the first court ruling.


The decision is far from the first to favor the little guy. In September,
Hasbro lost another round in its ongoing battle to reclaim the domain name
clue.com, losing to Internet consulting firm Clue Computing in a Boston
court. Eric Robison, Clue Computing’s president and CEO, similarly noted
the personal and financial toll the domain name battle had taken on his small company.


Similar rulings have been made overseas. In Brazil, America Online lost out
to a local ISP over the use of aol.com.br, and instead launched its
regional service under br.aol.com.

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