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October 1, 2014 – Who “owns” the Internet? Israeli attorney Nitsana Darshan-Leitner intends to find out — in order to force ICANN, the US government organization that manages the web, to hand over the domain names of Iranian web sites to the victims of terror attacks perpetrated and funded by Tehran.
To do that, she intends to put ICANN through the wringer –examining paperwork and deposing officials — in order to collect on a $1 billion terror bill courts say Iran owes terror victims.

This week in US Federal Court, Darshan-Leitner’s Shurat HaDin Israel Law Center organization, together with US-based attorneys Erik S. Syverson and Robert J. Tolchin, filed their response to ICANN’s contention that domain names “are not property, and are not ‘owned’ or ‘possessed’ by anyone including ICANN, and therefore cannot be seized in a lawsuit.” Darshan-Leitner, a veteran of many lawsuits against terrorist groups and backers on behalf of their victims, said she has plenty of evidence to the contrary. “Just look at Colombia, which sold its country domain to a private company for over $100 million,” she told The Times of Israel.

The ICANN claim and Darshan-Leitner’s response are part of a lawsuit that Shurat Hadin has been pursuing to collect judgments against Iran for damages to US and Israeli citizens and their families, including those killed and injured in terror attacks. Over the past decade, US courts have repeatedly accepted Shurat Hadin’s contentions that Tehran — as a major financial backer of Hamas and Hezbollah — could be held responsible for damages from attacks perpetrated by the terror groups. As a responsible party, Iran is obligated to compensate victims and their families for losses; judgments against Iran mount to over a billion dollars.

Not surprisingly, Iran has refused to pay up, so Darshan-Leitner has been pursuing these judgments in the courts. “We’ve been able to seize numerous Iranian assets to satisfy these judgments,” Darshan-Leitner said. “Last year, for example, we were awarded a building on New York’s Fifth Avenue, and we have a case pending for seizure of an Iranian government-owned art collection at the University of Chicago.”

However, Iran is out of US real estate, and with all of Tehran’s American bank accounts frozen, there would seem to be no more assets that can be seized to satisfy the judgments — except for its Internet domains, entities that are located in the US, and that are very valuable. Iran’s domain, Shurat HaDin says, is located in “the Root Zone, which is the central and authoritative map to all top level domain names on the Global Internet, giving ICANN its power and control over the Internet.” That Root Zone is physically located in the US — which means that it contains assets that could theoretically be seized to satisfy the judgments.

The court last June agreed with Shurat HaDin, ruling that the .IR domain name, along with Iran’s IP addresses — without which Iranian websites cannot be included in the World Wide Web — were assets that could be seized to fulfill the judgments. Shurat Hadin, representing those victims, could collect fees Iran pays to keep its Internet going — or, if it preferred, force an auction of Iran’s Internet assets. North Korea and Syria are also parties to the lawsuit, named as co-conspirators with Iran, but according to the organization, it is Iran, with a much more robust on-line presence, that would supply most of the value in a judgment.

After court accepted Shurat HaDin’s arguments, ICANN, which runs the Internet and administers the domain names and the payments for them, was given an opportunity to respond. It said that the domain names could not be seized in the manner the lawsuit demands. In its “Motion to Quash” filed with the court on July 30, John Jeffrey, ICANN’s general counsel and secretary, said that “country code Top-Level Domains (ccTLD’s) are part of a single, global interoperable Internet which ICANN serves to help maintain,” and thus are not assets of any single country, making them an inappropriate target for the lawsuit. “While we sympathize with what plaintiffs may have endured, ICANN’s role in the domain name system has nothing to do with any property of the countries involved,” Jeffrey said.

That’s not entirely true, said Darshan-Leitner. Domain names are clearly fungible assets and should be considered as such here. “We have a lot of examples of individuals and companies selling Internet domains, web addresses, and other assets — as well as many examples of courts ordering companies and individuals to hand over those assets to satisfy debts and judgments. The only difference here is in terms of scale — a ccTLD versus an individual domain. But of course, Iran owes a lot more money than the average debtor,” she said.

Darshan-Leitner believes there are actually a lot of fishy things going on at ICANN, and her team intends to get to the bottom of what domain name ownership constitutes, and where the money countries pay the organization actually goes. “This decision will have a major impact on many aspects of the ‘Internet business’ — who owns what, what the value of a domain name is, whether the laws of interstate and international commerce apply to domain names, and so on.” The decision could, in fact, upend the entire trade in domain names — and because of that, said Darshan-Leitner, a number of large domain name companies will be filing amicus briefs supporting Shurat Hadin’s contention that ccTLD’s should be treated like any other asset or property.

“If the court accepts ICANN’s arguments, trade in domain names altogether can be challenged, because if domain names are, as ICANN claims, ‘part of a single, global interoperable Internet,’ then how can they be sold individually?” Along with the money side of Internet administration, the lawsuit promises to shine a light on the day to day practices at ICANN. “We are demanding discovery — paperwork as to how ICANN operates, and testimony from its top officials. In addition, we will depose some of the founders of the Internet to establish that ccTLD’s have historically been considered property. Thus, ccTLD’s may be seized by the terror victims to satisfy Iran’s unpaid judgments.”

This week Shurat HaDin filed a motion for that discovery. ICANN has until the middle of October to respond, at which point the court will decide on whether to continue hearing motions, or force ICANN to hand over Iran’s Internet assets.

According to Darshan-Leitner’s co-counsel Erik Syverson, the case “is not only a righteous case, but one of first impression. Courts across this country have long held that domain names are property that may be seized to satisfy civil judgments. We are simply asking this court to apply the same logic to ccTLD’s.”

“For years the Iranian government has refused to pay its judgments, thumbing its nose at these terror victims and the American court system,” Darshan-Leitner added. “Our clients continue to suffer from the suicide bombings that Iran financed. It is not our intention to shut down Iran’s Internet usage, but we want what is rightfully due. If by seizing any funds earned from these Internet assets we can satisfy the judgments, we will have served our clients.”