Dot-biz domain launch stalls in court

A Los Angeles Superior Court judge effectively postponed the launch of most new .biz domains on Thursday, granting an injunction sought by some domain applicants. Superior Court Judge Anthony Mohr indicated that Neulevel Inc.'s plan for doling out the domains was probably an illegal lottery. The company was ordered to set aside $3 million because it might be forced to refund some 1.5 million applications, which cost $2 each.

SOME OF THE NEW .biz domains actually will launch as planned on Oct. 23 — but only domains that were sought by just one applicant. Any domains with multiple suitors — about 58,000 — have been put on hold indefinitely while Neulevel tries to work out a new method for allocating them.

Neulevel's original plan for doling out domains involved a random drawing in which applicants essentially purchased tickets for $2 each. The more tickets, the greater the chance to win.

Attorney Derek Newman, representing a Phoenix, Ariz., disc jockey who wants to obtain, filed suit against Neulevel asking Mohr to prevent the drawing. Newman said the scheme constituted an illegal lottery. On Thursday, Mohr agreed, and recommended Neulevel find a new method for handing out the disputed names, Newman said.

"We're not surprised because we believed all along it was an illegal lottery," Newman said. "Now our clients will have a fair and lawful chance at domain names."

In a statement issued by CEO Douglas B. Armentrout, Neulevel said it was disappointed in the ruling, but indicated that "more than 80 percent of the domain names applied for during the .BIZ domain name application process are unaffected" — referring to the names that were desired by only one applicant.

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