Domain Protection LLC v. Sea Wasp LLC
4:18-cv-00792
E.D. Tex.Jul 17, 2019Background
- Domain Protection (registrant) acquired ~50,000 domain names via an assignment from Lisa Katz, who had been directed by a Northern District of Texas court to control LLC assets after a receivership unwind.
- Sea Wasp, an ICANN-accredited registrar that purchased Fabulous.com, placed an executive lock on the domains after litigation over ownership resumed, preventing transfers or updates to nameserver/registration data.
- Domain Protection terminated an ad-management contract with Bidtellect, changed nameserver records, then Sea Wasp reverted those changes and re-imposed the executive lock after a bankruptcy filing by Baron (who previously contested control).
- Domain Protection sued Sea Wasp under the Texas Theft Liability Act, the Stored Communications Act, and tort claims, and moved for a preliminary injunction to compel Sea Wasp to remove the executive lock and restore Domain Protection’s ability to update nameserver records and transfer domains.
- Sea Wasp defended its actions as required or permitted under ICANN policies (UDRP, Inter-Registrar Transfer Policy), arguing it must maintain the status quo while ownership disputes are pending.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff seeks to alter the status quo | Domain Protection seeks to restore the last uncontested status (period when no executive lock existed) | Sea Wasp contends plaintiff seeks to change the status quo and thus needs a stronger showing | Court: Plaintiff seeks to maintain the last uncontested status; stricter standard for changing status quo does not apply |
| Whether Domain Protection has a proprietary interest in the domains | Domain Protection asserts a possessory/proprietary interest via Katz’s authority and the assignment to Domain Protection | Sea Wasp disputes ownership and says disputes over title preclude TTLA claim | Court: Plaintiff made a prima facie showing of a proprietary interest and lawful possession pending contrary court order |
| Whether ICANN rules authorize/require an executive lock during ownership disputes | Domain Protection: UDRP/transfer rules allow registrant-initiated transfers on written/electronic instruction; UDRP does not require executive locks and presumes registrant control unless court/administrative order requires otherwise | Sea Wasp: ICANN obligations and Inter-Registrar Transfer Policy permit or require maintaining status quo (lock) when disputes exist | Court: UDRP and ICANN policies do not mandate an executive lock in these circumstances; less-restrictive mechanisms exist; Sea Wasp’s broad reading is rejected |
| Whether injunction is justified (irreparable harm, balance, public interest, security) | Domain Protection: lock prevents monetization, access to emails/traffic, and domain renewals; economic harm is hard to quantify and thus irreparable; requests no security due to limited funds | Sea Wasp: unlocking risks liability to third parties and may prejudice dispute resolution; plaintiff could use ICANN procedures | Court: Plaintiff showed likely irreparable harm; balance and public interest favor injunction; security waived (none required) |
Key Cases Cited
- Kaepa, Inc. v. Achilles Corp., 76 F.3d 624 (5th Cir. 1996) (oral hearing not required when no factual dispute; parties must have opportunity to present legal views)
- Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192 (5th Cir. 2003) (status quo defined as last uncontested status; preserving continuity can be maintaining, not changing, the status quo)
- Nichols v. Alcatel USA, Inc., 532 F.3d 364 (5th Cir. 2008) (four-factor preliminary injunction test and burden of persuasion)
- Weinberger v. Romero-Barcelo, 456 U.S. 305 (U.S. 1982) (decision to grant preliminary injunction lies within district court discretion)
- Corrigan Dispatch Co. v. Casa Guzman, S.A., 569 F.2d 300 (5th Cir. 1978) (trial court may waive Rule 65(c) security requirement)