The software company obtained the domain name optimatech.com in 1990. But in 2001, Optima suddenly noticed that its sales revenue had dipped. An investigation revealed that a former employee, Michael DeCorte, had obtained ownership of the domain name and was running his own web site to hijack company revenues.
Optima Senior Vice President Jack Geering explained to CNet News.com, "We don't know exactly when [DeCorte] gained control of our domain name and when he began diverting our sales traffic."
Geering continued, "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."
The mistake was soon rectified, but left Optima out of pocket. As Barry Eisler, Optima's president remarked:
"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 authorized the theft".
He added:
"We are taking this action now, after notifying Network Solutions on several occasions that its actions caused our company a great deal of damage and lost revenue. The remedy sought is quite straightforward – we are asking for over $3 million in damages caused by their actions in giving our domain away."
The action follows the landmark decision by a federal appeals court in July that VeriSign could be liable for the unauthorised transfer of the lucrative domain name sex.com to an ex-convict. That case, possibly the first ruling where a domain name has been protected as a traditional property right, has encouraged Optima to seek a similar remedy.
VeriSign has made no comment.