VeriSign sued over fake domain name swop

Storage specialist Optima Technology has filed a lawsuit against Network Solutions, alleging that the registrar gave away its domain name without its permission and in doing so caused damage to its business.

The suit, filed in Orange County Superior Court, alleges that Network Solutions transferred ownership of its www.optimatech.com name to former Optima employee Michael DeCorte, allowing him to divert Optima's revenue into his possession.

Barry Eisler, Optima's president, said in a statement on Monday: "This is no different than parking your car with the valet, giving your key to the valet attendant and coming out after a wonderful dinner, only to find your car was stolen as the valet gave your keys to a crook without checking to see if you authorised the theft."

Optima, which filed its domain name with Network Solutions around 1990, is seeking more than $3m in damages from the VeriSign subsidiary.

The lawsuit follows a federal appeals court ruling in July, in which the original owner of Sex.com won the right to sue Network Solutions for transferring a domain name without proper notification. Previously, a lower court had ruled that domain names were not covered by laws that govern tangible property.

When Optima noticed that its sales were plummeting in 2001, it began investigating and discovered that its revenue had been diverted, according to Optima spokesman Jack Geering.

"We don't know exactly when [DeCorte] gained control of our domain name and when he began diverting our sales traffic," Geering said. "When we confronted Network Solutions, they refused to give us the information. They said they had a letter from our company authorising the transfer and had also had follow-up phone calls with us."

Optima alleges that DeCorte was joined by another former employee, Raymond Martin, in diverting its revenue via a fake website.

Network Solutions returned the domain name back to Optima in 2001.

VeriSign, which bought Network Solutions in 2000, declined to comment on the pending Optima litigation.

Separately, the Sex.com case has been returned to the lower courts to render a decision, according to Tom Galvin, a spokesman for VeriSign. He said the Optima case is the first such suit filed since the federal appeals court ruling.

Geering said Optima decided to pursue its case against Network Solutions after the federal appeals court had ruled in the Sex.com case.

Dawn Kawamoto writes for CNET News.com