Pending US court case may shed light on ICANN’s legal status

Our legal system likes to divide the world into categories. Some things are property and some are not. Property has distinct owners. Some brands are trademarked and some are not. Most legal precedent is about drawing demarcation lines and inventing new categories to cover new circumstances. The Internet has upended many traditional categories, and the courts have been busy categorizing and conceptualizing the new circumstances caused by modern communications technology. By a strange and convoluted process, a pending legal case about payments to terror victims may end up clarifying several open questions about Internet law.

The US Congress has authorized lawsuits against sovereign governments for terrorism that has harmed Americans. Plaintiffs in several cases have successfully convinced US courts that the government of Iran is responsible for funding terrorism against American citizens. Winning the cases is only half the challenge, however. The victims’ families want payment, not just the symbolic value of winning in court. Getting the money is not so easy, since Iran has been almost totally cut off from the US banking system. However, Iran has not been cut off from the Internet, and it turns out that by virtue of being on the Internet, Iran has financial ties to American entities after all.

Every national government has a top-level Internet domain, such as .uk for Britain, .fr for France, and .ca for Canada. These domains are delegated to governments by an organization called ICANN (the Internet Corporation for Assigned Names and Numbers). Governments pay ICANN for these top-level domains, and the payments can be tens of thousands of dollars per year. Iran’s top-level domain is .ir, and this domain is widely used for domestic Iranian websites. The terror victims’ lawyers want to seize the fees paid by Iran to ICANN and, if necessary, take control of the .ir domain itself.

On June 24, the US District Court for DC authorized preliminary steps towards seizing Iranian payments to ICANN in several ongoing cases. (See for example Ben Haim vs Iran, civil action 02-1811.) The court authorized subpoenas against ICANN for information on its negotiations with Iran, and issued writs of attachment against any Iranian payments. Some press write-ups have portrayed this as “plaintiffs win against ICANN in court.” This is hyperbole. While the plaintiffs have won their case against Iran, the case against ICANN has barely started. ICANN has not yet responded, much less lost in court.

Delegation agreements for national domains typically describe payments to ICANN as “purely on a voluntary basis.” ICANN has not acknowledged any current or past payments from Iran, and there may in fact not be any such payments. The plaintiffs have indicated that they will attempt to seize the .ir domain itself, in lieu of money.

It seems unlikely that the court will in fact transfer .ir as the plaintiffs ask. Granting US courts the power to claim direct control of Internet domain names of foreign governments would be a major up-ending of Internet governance. The technology industry is likely to protest such a drastic rearrangement, particularly one that would give the American tort bar this sort of global reach. Foreign governments would object to anything that gives American courts such a disproportional role in Internet governance, and the Obama administration is likely to convey those concerns to the courts.

The danger of a nationalization of Internet naming therefore seems remote. However, the pending litigation does still matter. To date, ICANN has had a somewhat nebulous legal status. It is a private nonprofit organization that answers to a “global stakeholder community;” which is to say that nobody in particular can control it. But now that ICANN is being brought into court and asked to hand over assets and domains, the organization will have to explain itself more clearly. This case will shed some light on ICANN’s legal rights and obligations.

We don’t yet know what course the litigation will take or what issues will be argued and decided. Here are several that might come up: when ICANN delegates a top-level domain to an organization or government, can that decision be reviewed by US courts? Are the terms of such domain name delegations enforceable in US courts? Are top-level domains property? Are they an ongoing service provided by ICANN? Or perhaps something completely different?

It’s not obvious what the right answers here are. It would be objectionable for ICANN to be completely beyond any legal supervision, but it is also objectionable that US courts should be able to meddle in Internet governance questions exclusively concerning foreign governments. One of the benefits of litigation is that it provides a structured process by which not only the parties, but also other interested actors, can propose and critique solutions. As a result, this incipient case about .ir might provide a useful opportunity for the Internet community to consider the sort of legal oversight applicable to ICANN and the Internet naming system as a whole. Read more