The companies responsible for doling out the Internet dot-biz names are conducting an illegal lottery, according to a lawsuit filed in the Superior Court of Los Angeles.

The suit, filed July 23 by three law firms looking to obtain class-action status for their case, targets L.A.-based Internet Corporation for Assigned Names and Numbers and its dot-biz registry Neulevel Inc. of Virginia, as well as 60 reselling registrars associated with Neulevel.

The lawsuit includes only two plaintiffs so far, including Glendale-based Skyscraper Productions LLC, a comedy traffic school that wants to obtain the "" and "" names.

To register the dot-biz name, an interested party pays a $5 fee to be put into a pool of possible registrants. A "winner" is then picked from that pool. The process hurts small businesses, attorneys claim, because they may not have the finances to apply to the pool several times to better their chances of winning, attorneys claim.

"This really prejudices the individual who doesn't have infinite cash resources," said David Weeks, attorney with Westlake Village-based Masry & Vititoe which has partnered with Century City's Engstrom Lipscomb & Lack to handle the case. Both firms were involved in the highly publicized "Erin Brockovich" case. Joining in the dot-biz case is Seattle-based Newman & Newman.

"How's the small guy, the guy who wants to set up a dot-biz name, going to compete with someone who can apply a thousand times over?" Weeks said.

Lottery elements cited

The method includes three elements of a lottery: a prize, which is the dot-biz name; a consideration, which is the payment or fee collected by Neulevel and its constituents; and a chance, which is the pool in which a "winner" is selected, said Derek Newman of Newman & Newman.

A private organization cannot conduct a lottery by law, he said.

Neulevel executives did not return phone calls, but Jeffrey Neuman, the company's director of policy and intellectual property, issued a statement on the lawsuit July 26 claiming it was without merit.

ICANN spokeswoman Mary Hewitt said the firm cannot comment on the case, which, she added, has no merit. She said the firm has come up with 47 different processes used in registering names since its founding in 1998 and picks a different process each time in "trying to find the most equitable way" to register a domain name. "It's sort of like testing untested waters," she said.


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