Domainers Can't Have It Both Ways: Until Blatant Cybersquatters Are Exterminated, All Domainers Will Suffer

It has always amazed me that domainers take such umbrage to the UDRP, ACPA and other cybersquatting provisions, while doing nothing to provide disincentives for these laws to exist.  I don’t know what the actual percentages are, but the number of domains registered which are clearly cybersquatting someone else’s famous trademark must be extremely high.  We have clients who have literally hundreds of blatant cybersquatters sitting on typos of their various domain names.  Virtually any company with significant traffic has typosquatters diverting traffic for their own PPC revenue.  The cybersquatting problem continues to grow while, at the same time, legitimate domainers work hard to legitimize domain monetization practices.

Continue reading "Domainers Can't Have It Both Ways: Until Blatant Cybersquatters Are Exterminated, All Domainers Will Suffer"

Avoiding Adverse UDRP Decisions: A NAF Transfer Order of The Million Dollar Domain LH.com Does Not Bode Well For Domainers

On April 17, 2008 a NAF Arbitration Panel (David Sorkin Dissenting) ordered the transfer of lh.com from Future Media Architects, Inc. to Deutsche Lufthansa AG. Read the cybersquatting and transfer decision here. The most interesting part of the decision was the Panel's conclusion that buying and holding domain names was not a legitimate use. The Panel stated:

"Respondent’s business model involves the indiscriminate acquisition and use of as many such domain names as possible. The traditional analyses of the rights to or legitimate interests element should not apply in gross when a registrant is not seeking to use any particular domain name to conduct business, is not otherwise known by that name, and has no interest in the nature of the transferor’s rights there from."

Continue reading "Avoiding Adverse UDRP Decisions: A NAF Transfer Order of The Million Dollar Domain LH.com Does Not Bode Well For Domainers"

S. 2661 is a Fox in Sheep’s Clothing? Why Call it an Anti-Phishing Bill When It Is Also A Trademark Bill?

Chuck Kisselburg at the ICANNblog makes a good point about he so-called Anti-Phishing Bill, Senate Bill 2661. While the bill is not close to becoming a law at this juncture, Chuck correctly notes that "the bill feels like a fox in sheep’s clothing as the bill’s name suggests a bill against anti-phishing. Instead the bill not only discusses anti-phishing but seems to be based around the use, or misuse of domain names."

Continue reading "S. 2661 is a Fox in Sheep’s Clothing? Why Call it an Anti-Phishing Bill When It Is Also A Trademark Bill?"

Failure to Respond To Trademark Threat Letters & Use of Privacy Services Can Support a Finding Of Bad Faith

There are many risks to domain investors under the UDRP.   The opportunity to capitalize on strong generic or descriptive domain names is in many ways dependent on a solid understanding of UDRP decisions and avoiding behavior which would increase a risk of transfer. As investors purchase domains at higher prices, the ability to protect those domains from transfer later on becomes more important.  A serious domainer needs to understand that their own behavior can provide ammunition to a complainant seeking a domain transfer order of a high value domainvunder the UDRP.  The WIPO panelists in creditkeeper.com ordered a transfer of a domain purchased by a domain investor for $48,000 based, in large part, on avoidable behavior and poor decision making by the domain investor.

Continue reading "Failure to Respond To Trademark Threat Letters & Use of Privacy Services Can Support a Finding Of Bad Faith "

Parking Pages Can Create Risk Of A Finding Of Bad Faith Under the UDRP

Auto-generated websites equal bad faith under the UDRP « The Legal Satyricon

This lack of direct control is often a central theme in a cybersquatter’s response to a UDRP complaint. At least one UDRP panel bought this argument. See Admiral Insurance Services v. Dicker, WIPO Case No. D2005-0241 (“the Panel accepts that the terms under which Google makes its Adsense advertisements available do not permit the Respondent to control them . . .”). However, that panel included David Sorkin, which makes its findings suspect. (He rules for complainants less than 1/3 of the time, and has earned more than $100,000 in UDRP panelist fees. Do the math).

The prevailing trend is that the “willful blindness” argument is not valid, as illustrated in the recent decision: State of Florida, Florida Department of Management Services v. Bent Pettersen, WIPO Case No. D2008-0039 ... In coming to this conclusion, the Panels referred to another recent case, Villeroy & Boch AG v. Mario Pingerna, WIPO Case No. D2007-1912.

Technorati Tags: domaining, cybersquatting, bad faith

Extend the Value of Your Domain Name & Realize a Multiple on Your Investment

Elliot's Blog | Domain Name Investing News & Commentary

One of the coolest things about owning a domain name is that you can get into just about any type of business your heart desires. Domain ownership breaks down some of the barriers of entry in an industry, and it allows you to jump right in feet first. You don’t necessarily need to sell product or services to be in a particular business, and you can make your own niche in the industry....

Of course you could do much more with a domain name than start a blog.
You could build a directory site or e-commerce site with a little more
work. By purchasing a domain name, you are buying a piece of land in
the business district of your choice, and you can build whatever you
would like. Is jewelry your thing? Why not set up shop on Jeweler’s Row on Sansom Street in Philadelphia? Want to work in the stock market? Why not buy a property on Wall Street? With domain ownership, you can virtually open a business anywhere you want!

Well said Elliot. Domain names offer tremendous potential for those willing to put the creative time and energy into domain name development. You can take a $10,000 domain name and turn it into a $100,000 business. You can establish trade mark rights in a domain name by using it as a brand to identify goods or services, thereby extending its value. Trademarks and service marks continue to increase in value as intangible property. Developing legitimate content, product sales ans services continues to grow in importance within the domainer community.

Many domainers are realizing that there is more to the business of domain names than resale. Using a domain name as business offer tremendous potential for ROI.

Technorati Tags: domain name, monetization, domainer

Kellogg is Abusing the UDRP in its Effort to Secure Eggo.com.

A recent NAF decisions illustrates a problem which domainers have been griping about for years: The UDRP can be used by overly aggressive corporations and their attorneys in order to hijack domain names in which they have no rights.  The latest NAF decision in the case of Kellogg North America v Gregor Illustrates abuse of the UDRP by trademark holders all too well.  Fortunately, the NAF panelist came to the correct result, finding that complainant failed to establish a lack of legitimate interest or bad faith under the facts presented.

Continue reading "Kellogg is Abusing the UDRP in its Effort to Secure Eggo.com. "

More Cybersquatted Domain Names for Your Buck With One UDRP Complaint

Rule 3(c) of the Rules for Uniform Domain Name Dispute Resolution Policy states, “The complaint may relate to more than one domain name, provided that the domain names are registered by the same domain-name holder.”  This means that if a trademark owner’s business is being harmed by multiple unrelated cybersquatters, she must file one complaint against each registrant.  What if you have a popular trademark and/or domain name (which usually coincides with a popular product or service) that you believe is being cybersquatted by numerous domain name registrants?  Based upon the number of UDRP Complaints that name only one domain, most Complainants, and even their attorneys, believe you have to file one Complaint against each domain name registrant.

Continue reading "More Cybersquatted Domain Names for Your Buck With One UDRP Complaint"

Frank Schilling Talks Cybersquatting & Domain Monetization

What is Legitimate Domaining? 

We are proud to sponsor this vTalkradio interview with Frank Schilling. Frank Schilling is one of the largest private generic domain name holders in the world.  In this interview, Frank Schilling provides invaluable information about domaining, cybersquatting and generic domain registration.  Interview highlights include great instructional information about how to avoid cybersquatting problems, the tension between trademark holders and domainers, abuses by the trademark community and the next wave of domain monetization.

Continue reading "Frank Schilling Talks Cybersquatting & Domain Monetization"

DataRecovery.com Domain Name Sells for $1.7 million: Highest Recorded Value So Far In 2008

ESS Data Recovery buys DataRecovery.com for $1.7M | Dominik Mueller

ESS Data Recovery, Inc. yesterday announced the purchase of the generic domain DataRecovery.com. ESS Data Recovery paid $1.7 million for the domain name, which makes this the highest reported domain sale of the year. The company will forward it to its existing, established website. It said it had bought the domain to set itself apart from the growing number of new data recovery companies and to attract more customers through the domain’s direct navigation traffic and generic nature:

Technorati Tags: buy domains, sell domains, monetization, domainer

Are LLL.com Domains At High Risk For Cybersquatting Threat Letters and UDRP Arbitrations?

Logistik Labs>> Domain Tips, Tools, News and Information

Good thread going on over at the NamePros domain forum regarding one senior domainer's opinion that purchases of LLL.coms are growing inherently risky due to the possibility that the LLL domain can easily be taken away by UDRP. Read it here.

The thread suggests that registrants avoid ad-link programs on tho LLL.com domains in order to defeat the bad faith element necessary to show cybersquatting under the UDRP.  Of course, developing a domain in a non-infringing manor or leaving them parked with no content at all can be helpful when fending off threat letters from trademark holders and UDRP arbitrations.

Technorati Tags: cyber-squat, udrp, aribtration, domains

Domain Name Lease with Option to Purchase

Elliot’s Blog » Blog Archive » Lease to Own a Domain Name

In a situation like this, I think a lease-to-own offer would be a smart way to negotiate to buy the domain name. I advised the potential buyer that it might make sense to offer the owner $7,500/year for 3 years with a $100,000 option to buy in year 4. I would imagine this would placate the owner because he will eventually realize his asking price, and he will also earn 50% more revenue for the next 3 years. The buyer would then have 3 years to try and monetize it better to justify the asking price. If he fails after a year, he can revert to the owner’s parking strategy and lose just $5,000 in years 2 and 3, as the name would earn $10,000 and he is on the hook for $15,000. If he had originally agreed to the asking price, he would be out $100,000.

Registrant/ Respondent of OnePhone.com Wins WIPO Case Brought By Trademark Holder

What's in a name? Cybersquatting case has an answer

It's not often that a domain-name holder accused of cybersquatting actually prevails in a dispute with the party that filed the complaint. It's rarer still for that entity to then win a counterclaim of attempted reverse domain-name hijacking.

But that's just what happened to Indigo Networks, a Nassau, Bahamas-based telecommunications company that last November found itself hit with a complaint alleging that it had no legitimate interests or rights to the Onephone.com domain name it owned.

The complaint, filed by OnePhone Holding AB, a Stockholm-based telecommunications investment company, went to the World Intellectual Property Organization (WIPO). The Geneva-based United Nations agency is one of four ICANN-approved domain-name dispute-resolution service providers.

OnePhone asked WIPO to have the Onephone.com domain name transferred because it was the rightful owner of a European registration under the name "ONEPHONE." The Swedish company also claimed that it had registrations or pending registrations of the name in several other countries -- though not in the Bahamas.

Technorati Tags: udrp, wipo, cybersquatting, marketing, generic domains

Win or Lose: The UDRP Is Not Your Only Option When It Comes to Domain Names

While the UDRP is an efficient and relatively cost-effective mechanism by which a trademark owner can acquire a domain from a cybersquatter, it is not the only option.  This is especially true since the proofs needed to win a UDRP are not the same as those required to win an ACPA federal lawsuit, although similar.  If your UDRP Complaint requesting that the domain name be transferred is denied, you can still pursue an ACPA lawsuit for cybersquatting, as long as you do so within the applicable statute of limitations.   

Should you be on the receiving end of a UDRP Complaint and lose, you have rights that may be worth pursuing.  However, you do need to know that if you lose, you must file a lawsuit in a court of law to stay, or prevent, the domain name from being transferred to the Complainant that prevailed under the UDRP.

The UDRP is a form of adjudication, but as the below excerpt from a known case makes clear, it is no court of law. 

Continue reading "Win or Lose: The UDRP Is Not Your Only Option When It Comes to Domain Names"

Bounty Hunters to Track Down Cybersquatters?

Rick Schwartz has been warning other domainers for some time about the dangers that lurk ahead.  One lawyer at Out-law.com is proposing that trademark holders band together to track down and police cybersquatters worldwide.  This effort would be funded by large global corporations. 

John Mackenzie, an intellectual property and technology law expert at Pinsent Masons, the law firm behind OUT-LAW.COM, said that businesses should band together to tackle the multi-million dollar cybersquatting industry pro-actively.

"What is really needed and what may occur is a trade organization pushing a policing function whose only purpose is to chase these people," said Mackenzie, saying that it could be similar to business-funded copyright protection groups such as the Business Software Alliance.

"Brands have no choice," he said. "This is turning from the opportunistic registration of domains with people making small amounts of money in garden shed operations into activity from highly sophisticated organizations who are operating around the world."

Essentially, what is being proposed here is a common fund to bring cybersquatters into court in order to sue for damages, as opposed to the limited relief of domain transfer allowed under the UDRP and similar policies.

UDRP: Lack of Use of a Domain is NOT Always a Defense

The mere holding of an infringing domain name without active use can constitute use in bad faith under the UDRP.  Despite this, all too often trademark owners watch as domains are registered that incorporate their trademark.  Unfortunately for the trademark owner, they think costly litigation under the ACPA is the only means of redress for what appears to be clear cybersquatting.  While the UDRP is cost effective and efficient, there is a general understanding (or more appropriately misunderstanding) that there must be a use of the domain name in order to file a UDRP complaint and win the UDRP.  In fact, the rules for the Uniform Domain Name Dispute Resolution Policy, states that the domain name must have been registered in bad faith and used in bad faith to satisfy the policy.  Registration in bad faith was, and continues to be perceived by some, as not enough.  That said, recent panels have held that a Respondent’s failure to make an active use of the web site, such as merely parking the web site with a web hosting company, is enough to satisfy bad faith registration and use under policy paragraph 4(a)(3).

Continue reading "UDRP: Lack of Use of a Domain is NOT Always a Defense"

Amazon Moves to Protect Kindle Trademarks, Sends Threat Letter to "KindleReport.com"

Amazon recently  achieved trademark registration with the USPTO for "Kindle" in the following categories:

Services IC 009. US 021 023 026 036 038. G & S: Portable electronic device for receiving and reading text and images and sound through wireless Internet access and for displaying electronically published materials, namely, books, journals, newspapers, magazines, multimedia presentations; computer hardware and software in the field of text, image and sound transmission and display

IC  038.  US 100 101 104.  G & S: Transmission of text, images and sound through a portable electronic device

IC 041. US 100 101 107. G & S: Providing information in the field of electronic publishing in all forms, via a global computer information network

Amazon is now seeking to protect its Kindle trademark against the self proclaimed "Kindle News Site" www.kindlereport.com.

Continue reading "Amazon Moves to Protect Kindle Trademarks, Sends Threat Letter to "KindleReport.com""

If The Number '5' License Plate is Worth $6.8 Million, What Is Your Domain Name Worth?

Domain names and license plates share some common characteristics.  Both allow only one person to own a particular word or number.  The supply of good words, vanity words and generic words is finite.  Demand for those strong generic or descriptive words is high.  Where does supply meet demand on the price curve?  Domainers can learn from what is happening in a similar market for - of all things - vanity license plates.

The number "5" license plate sold for $6.8 million dollars in Saudi Arabia and another 300 vanity plates sold for another $56 million at last week's auction.  It is estimated that the number "1" will be auctioned next month for up to $20 million dollars.

The free market is just realizing the value of a domain name, driven by the fact that each domain name is unique and - typos and cybersquatters aside -  their 'one-of-a-kind' nature. Domain names are in many ways like lake front property.  There are only so many lots on the lake. The best lots with the best views and lake front are unique. Once you own that lot, no one else can have it.  It is yours.  As all of the lake property gets sold, values for all lot owners go up.  The supply becomes constrained.  Value and price go up.

What is your unique domain name worth?

Continue reading "If The Number '5' License Plate is Worth $6.8 Million, What Is Your Domain Name Worth?"

You Are A Legitimate Domainer If ... You Do Not Cybersquat

There is a major perception problem that all domainers are cybersquatters. Of course, this is not true.  Cybersquatters target well know brands and trademarks, as well as typos of those marks.  Domainers target generic words that have limited or no trademark rights.  The White Hat Domainers often get lumped in with Black Hat Cybersquatters.  This misconception is typified this 'tongue-in-cheek" post on the Domain Kid Blog  as set forth below.  Notice how it implies that cybersquatting activities are inherent in domaining.

… you consider Whois a social network.
… you still refer to Zuho as SwapNames.
… you’re not a lawyer but can recite trademark laws from memory. (ES:  White Hat Domainers should know trademark law or hire a trademark attorney to steer clear of threat letters)
… you own some sort of iphone related domain name. (ES: Targeting well known brands is NOT an attribute of legitimate domaining)
… your backlink quality is more important than your quality of friends.
… two words: ICANN
… you’ve ordered chips & Dotsauce.
… you knew GoDaddy before he was even a father.
… you’ve been in a fistfight because someone has dissed your Pagerank.
… you’ve registered a celebrity’s name. (ES: Targeting well known surnames and celebrities is NOT an attribute of legitimate domaining)
… you consider parking nothing to do with an automobile.
… you’re favorite quote is "may the Rick Schwartz be with you."

Continue reading "You Are A Legitimate Domainer If ... You Do Not Cybersquat"

The Many Names of Cybersquatting

United States federal law enacted the ACPA to provide a remedy for cybersquatting.  Cybersquatting requires a domain registrant to register, traffic in, or use a domain name that incorporates "a mark that is distinctive at the time of registration of the domain name, identical or confusingly similar to that mark, and possess "a bad faith intent to profit" from that mark.  As cybersquatters become more sophisticated and trademark holders become more intent on protecting their intellectual property, new names have been used to more specifically define the kind of cybersquatting.  Nonetheless, the ACPA elements required above remain the same for the following forms of cybersquatting.

Continue reading "The Many Names of Cybersquatting"

Fusu, the world’s first Domain Stock Exchange opens up to a wider audience; Announces strategic partnership with EuroDNS

DomainPulse.com Fusu — The Domain Stock Exchange — Announces Public Beta and Key Partnership

With 140 million domains registered today and a market value that could reach $4 billion by 2010, the need for a dedicated platform where domain names purchasers and investors could meet and trade was sorely unaddressed until late 2007, when Fusu was pre-launched by a team of Internet professional to address that very issue. Because so few good names are still available, domains have become the real estate of the 21st century. More than 90,000 domain names are bought daily, with some achieving spectacular market values: Vodka.com sold for $3.5 million, Computer.com for $2.1 million.

Technorati Tags: domain, auction, fusu

Powered by ScribeFire.

Maximize Domain Value By Selling To Established Companies With A Specific Need

Matching domain names with established services makes great sense for forward thinking companies.  The sale of bookmarks.com also  reinforces the  reality that domainers are more likely to obtain Rick Schwartz level domain sales if they match their domains directly to established companies with specific domain needs. 

Elliot’s Blog » Blog Archive » Bookmarks.com - Smart Strategic Purchase

At today’s Snapnames Live Auction at Domainfest, Lonnie Borck was the winning bidder for Bookmarks.com, purchasing it for $310,000. This is a fantastic domain name, and it is a great purchase to incorporate with his netRocket.com website, a bookmark scheduling service.  Bookmarks.com is the category killer domain name for netRocket’s vertical, and it was a smart purchase. Not only will this help drive targeted traffic to netRocket, it is also a nice defensive purchase, as it prevents another upstart company from owning the category.

BTW:  Did anyone else notice the trademark issues between NetRocket's bookmark service and Google's page one number one return "netrocket", Mozcom's dial-up internet service? Mozcom has filed for a registered trademark with the USPTO and first use date of 04-11-2005.  Because of other prior uses of netrocket by Application Serial No(s) 75629654 and 75760079 (both since suspended), that application has been temporarily suspended.  Mozon's mark should come live again soon, which could create problems for NetRocket.com.  Thye may REALLY need bookmarks.com  if Mozcom comes after them  with a trademark threat letter. 

NetRocket.com at archive.org shows the domain was for sale in May, 2006, used as a "Build-A-Blog" site in April, 2007.  There is no archiving for he current site but it appears that NetRocket purhcsed NetRocket.com sometime in 2007 (probably for a lot of money) and then launched in December, 2007.  iSend may have been smart enough to to pay top dollar for a valuable domain, but not have been smart enough to get clearance from competent trademark counsel before branding and launching NetRocket.com.

Congrats to Elliot's Blog, voted number one domainer blog at DomainFest!

Technorati Tags: domainer, trademark, bookmark, rick schwartz

Domain Names Are Valuable Property: Are You Protecting Yours?

Domain name portfolio values continue to rise. Domainers continue to realize exponential returns on the domain registration of generic top level domains.  As noted below, Sedo reported record domain sales through its services for 2007. 

What are most domainers doing to protect their assets from unwarranted attacks by overly-aggressive trademark threat letter lawyers and reverse domain hijacking under the UDRP?   The somewhat incredible answer is that, except for the top domainer dogs, domainers typically don't do much to protect their business model and most valuable assets.

Sedo reports $72 million in sales for 2007 | Dominik Mueller

Domain aftermarket Sedo has released its Domain Market Study for the year 2007. The report says that Sedo sold a total of more than $72 million worth of domain names in 2007, which is a 60% increase from 2006. I’m sure the introduction of Sedo’s new auction system as well as the acquisition of GreatDomains have helped a lot to boost sales last year. Sedo continues to be the power broker of the industry. I interviewed the company’s CEO Tim Schumacher, who is very knowledgable about the domain space and a frequent speaker and domain conferences, for a newspaper article on domain names in 2005. At that time, Sedo had just opened its office in Boston and reported sales of about $11 million for 2004, aiming for $20 million in 2005 (they ultimately exceeded that goal by more than $6 million).

What is also interesting, is that the average sales price per .com domain name sold at Sedo was $5,016, up 54%. The sales prices reported by large domain aftermarkets are a good indicator for the overall domain market, in my opinion, because aftermarkets complete more sales and domain transfers than anybody else. Therefore, they can compile quite accurate stats and give good perspectives of the near future of the domain industry. Given the rise in value of domains in 2007 and the sales we’ve seen this year already, I’m absolutely positive 2008 will be another great year for this industry and set new records when it comes to both the average sales price and the total value of domains sold to end users.

Technorati Tags: domain monetization, sedo, cybersquatting

Domainers would not typically leave their cars and houses unlocked late
at night in an urban downtown environment.  With domain values going
up, domainers need to become more aware of the risks which threaten those valuable assets.  They need to understand the intricacies of trademark law, the UDRP and the ACPA.  While more domainers are hiring attorneys with expertise on domain protection strategy, the vast majority of domainers still leave their domains at risk, or worse yet, create risks with missteps which can result in domain transfer under the UDRP or in rem provisions of the ACPA.

Powered by ScribeFire.

Serious Domainers Require Cybersquatting Law Expertise

There are still far too many domainers who do not understand all of the intricacies under the Uniform Domain Name Dispute Resolution Policy (UDRP) and Anticybersquatting Protection Act (ACPA).  The UDRP and ACPA represent two of the most significant risks to any domain portfolio.  Trademark holders are always talking about defensive domain registration, cease and desist letters and trademark protection programs.  But you rarely hear domainers addressing the flipside of the coin.

Continue reading "Serious Domainers Require Cybersquatting Law Expertise"

Google To Stop Monetizing Domains During Add Grace Period (AGP)

Domain Tools Blog has reported that Google is expected to make a policy change which will certainly impact domain tasting.  We will applaud Google if they follow-through as Jay predicts and put this new policy in effect.  However, we agree with many of the comments which note that this new policy would only make some forms of domain tasting more difficult,and not eliminate the practice as Jay predicts.  Domain tasters don't need Google to know if a web site has traffic and is worth keeping (domain tasting for finding domains).  Domain tasters who are exploiting the AGP for 5 days of free adwords clicks will no longer be able to use Google as their ad-click delivery platform. Of course, there are numerous alternatives for domain tasters to exploit, such as Yahoo, Microsoft.

Continue reading "Google To Stop Monetizing Domains During Add Grace Period (AGP)"

What Every Domainer Needs to Know About Trademarks before Registering Domain Names

I was recently interviewed by Modern Domainer Magazine about trademark issues. In this article, I discussed a variety of trademark issues for domainers who wish to extend their domain name value by also registering trademarks and as due diligence prior to registering domains in order to avoid trademark infringement threat letters and lawsuits.

You can read the entire article here.

What Are Your Domain Name, Trademarks and Web Traffic Worth?

Most companies have yet to realize the value of their on-line property, comprised of their domain name, trademarks, brand names and established web traffic.  Most on-line companies still don't realize how much value they have tied up in these elements of intangible property.  Companies should protect their domain names, web presence and trademarks because they are valuable assets which will only increase in value over time.

Want proof?  Rick Schwartz just sold iReport.com for $750,000.00. We'll have to hear more from Rick, but it appears that iReport sold for the value of the domain name itself, irrespective of page rank or web traffic. Rick sold the domain for the value it represented to CNN in order to protect and extend its iReport brand and service, a service which allows everyday people to upload video or pics to CNN to assist CNN in finding high-end real time news stories and media.  The Wayback machine shows that the web site for iReport.com was a simple adwords link site, with no page rank and likely limited traffic.   

Domain Name Journal - The Lowdown

Rick Scwhartz has reason to smile  after $750,000 sale of iReport.com   T.R.A.F.F.I.C. Conference co-founder and pioneer domain investor Rick Schwartz has just completed the sale of iReport.com to the Cable News Network for $750,000. As the contract was being finalized Schwartz was asked if he had any similar domains so he told CNN he also owned the hyphenated version, i-Report.com.

Our attorneys were recently asked why the iReport domain name was not an example of bad faith cybersquatting under the ACPA or UDRP.  The answer is simple. Rick registered the domain in 1997 as a generic domain, well before  CNN launched its iReport web service and even longer before CNN could even think about asserting trademark rights on what otherwise would be a weak, descriptive and generic trademark.  Registering generic domains and avoiding monetization practices which seek to siphon traffic from established trademarks is fair game.

CNN clearly understood the value of the iReport domain (after much education by Rick no doubt) and will realize a strong return on their investment over time. Want to see what other domain names have sold for in 2007, check out the DNJournal Report here.

Rick can't say too much about the negotiations, but you will get the idea by reading his post reporting the sale here, here and from his cruise ship here.   Technorati Tags: rick schwartz, CNN, monetization

Powered by ScribeFire.

American E-commerce Brands Report by NetNames.com Underestimates Cybersquatting Problems

Poor On-line Domain & Brand Protection Leads to Cybersquatting, But NetNames Grossly Underestimates the Size of the Problem Facing On-Line Retailers:

The American E-commerce Brands Report by NetNames.com concludes that "more than two thirds of leading online retailers in the US currently have at least one domain suffix related to their brand name that is held by a cybersquatter. "

The American E-commerce Brands report evaluated the top 50 online retailers in the US on company registration of the top level domain names. The research is carried out by assessing whether a company has registered their name plus .com, .org, .net, .biz, .info .us.

Continue reading "American E-commerce Brands Report by NetNames.com Underestimates Cybersquatting Problems"

NSI's New Domain Search 'Reserve' Policy Continues to Evolve

NSI's so-called Reserve Policy adapts to market pressure and threatened legal challenge.

After 5 days of controversy, sniping, public relations statements and damage control, Network Solutions (NSI) has attempted to address the growing firestorm over allegations of Domain Name Front Running (DNFR). To be sure, there will still be debate about whether NSI was ever really motivated to protect consumers by reserving searched domains for 4 of the 5 day grace period.  Certainly, NSI was also protecting itself against the prospect that consumers would use their domain availability search service and then register available domains with less expense registrar (no doubt a common occurrence).  

Continue reading "NSI's New Domain Search 'Reserve' Policy Continues to Evolve"

NSI May Be Legally Liable For Alleged Front Running

Ari Goldberger over at the Direct Navigation Blog picked up on a story on DomainState.com and on DomainNameNews.com that once again suggests that people searching for domain availability at certain registrars are being registered by the registrar.  The registrar thereby prevents a registrant from purchasing it at any other registrar other than the Registrar whose web site was used to check domain availability. This, from our point of view, amounts to fraud and domain theft at the registrar level and has earned the term domain "Front Running" a term picked up from illegal stock broker practices using the same model. Domain Name Front Running (DNFR) is believed to be caused when registrars or ISPs sell domain availability search traffic that runs through their network to front runners, who register the domain before the consumer is able to complete registration.  The DNFR then tries to sell the domain to the original availability searcher, or to another third party. 

Frank Schilling posted an excellent article on the history of domain tasting, a related practice, titled The Closing Window: A Historical Analysis of Domain Tasting which is an excellent overview of these types of problems and how they occur.

Network Solutions (NSI) has now been accused of front running domains, a shocking accusation given NSI's domain industry leader status.

No one has challenged domain Front Running by registrars in the courts, likely because the practice is new and since the loss of a single domain would  not typically generate a level of damages to support litigation. But litigation over this fraudulent domain practice by registrars is both viable and likely inevitable as noted below. While NSI's explanation -- below -- may be legitimate, there is little doubt that some registrars are engaging in front running practices.

Continue reading "NSI May Be Legally Liable For Alleged Front Running"

NAF Cybersquatting Decisions Under UDRP

Recent Decisions (October 2007 - January 4, 2007) by the National Arbitration Forum (NAF) resolving domain name disputes filed under the UDRP:

Michael Smith Custom Clothiers, Inc. dba The Custom Shop dba Myshirtmaker.com v Custom Shirt Shop c/o Jim Nice.  (National Arbitration Forum January 4, 2008). Decision

National Council of Young Men's Christian Associations of the United States of America v Chen Bao Shui. (National Arbitration Forum January 4, 2008). Decision

Harrah's License Company, LLC v sysadmin admin c/o balata.com ltd.  (National Arbitration Forum January 3, 2008). Decision

Continue reading "NAF Cybersquatting Decisions Under UDRP"

McAfee Report - State Of Typosquatting 2007

Typo-squatting, the practice of registering domains using common misspellings of popular brands, products and people in order to profit from consumer typing errors, is increasing dramatically. McAfee recently did a comprensive study of typosquatting, as part of its effort to filter web traffic with its anti-virus and security system.  Read the McAfee Typo-Squatting Report here.

In an effort to further quantify and understand this phenomenon, McAfee studied 1.9 million typographical variations of 2,771 of the most popular and well known Web sites. Of these, we found 127,381 suspected typo-squatters.

Continue reading "McAfee Report - State Of Typosquatting 2007"

$100,000 in Statutory Damages Plus Attorney Fees

Yes, maximum damages are sometimes awarded against cybersquatters under the Anti-Cypersquatting Consumer Protection Act.  Thanks to the Seattle Trademark Lawyer Blog for alerting us that The Western District recently entered its Findings of Fact and Conclusions of Law in the Lahoti v. Vericheck, Inc., cybersquatting case. 

The Plaintiff lost a UDRP proceeding and filed a declaratory judgment action within the 10-day period challenging the National Arbitration Forum’s UDRP order that his domain name, vericheck.com, be transferred to Complainant Vericheck, Inc. The arbitrator made findings as follows:

Complainant has continuously used and operated under the VERICHECK name since Complainant’s establishment in 1989. Moreover, Complainant registered the VERICHECK mark with the State of Georgia in August 2001. Since its establishment, Complainant has spent more than $85,000 on marketing its products and services and now conducts more than $1.2 million per month in financial transactions over the internet under the VERICHECK name. The third-party that holds the active trademark registration for the VERICHECK mark with the United States Patent and Trademark Office is VeriCheck Systems, Inc., an Arizona corporation. The registrant, however, does not use the mark. The record shows that Respondent is not commonly known by the <vericheck.com> domain name. Moreover, Respondent is not using the domain name to offer any goods or services of its own but is using the name to direct internet users to links, including links to Complainant’s competitors. Respondent acknowledges that in response to Complainant’s offer to purchase the name Respondent quoted a price of $48,000. Furthermore, consumers seeking to find Complainant’s website who use Respondent’s domain name are redirected to a website that features advertisements of competitors of Complainant, presumably for a referral fee paid to Respondent. Respondent does not merely “park” the domain name.

Continue reading "$100,000 in Statutory Damages Plus Attorney Fees"

Domain Tasting is Bad for The Internet, Domaining and ICANN's Credibility

The Dell lawsuit has the potential to put the practice of domain tasting on the front page, as has already occurred when its lawsuit which was picked up by the Washington Post.  Will Dell and its friends in the trademark rights world take advantage of this unique opportunity?  Will they take this opportunity to educate the public and other corporations about the largely invisible practice of domain tasting and cybersquatting?

Most companies have little knowledge and understanding of domain tasting, cybersquatting or typosquatting. Most don't know their internet business, web traffic and revenue is being diverted each and every second of each and every day. Many are oblivious to the fact that their famous trademarks are under attack in cyberspace and that their customers are being diverted to their competitors.

Continue reading "Domain Tasting is Bad for The Internet, Domaining and ICANN's Credibility"

Dell Lawsuit Exposes the Seedy Side of Domaining and Domain Monetization

Follow the Latest Developments In The Dell Typosquatting / ACPA Lawsuit Here.

At the heart of the Dell ACPA cybersquatting lawsuit is the concept of the now highly controversial Add Grace Period (AGP) implemented by ICANN, which is  the technological and policy foundation of domain tasting.  A Grace Period refers to a specified number of calendar days following a Registry operation in which a domain action may be reversed and a credit may be issued to a registrar. AGP is typically the five day period following the initial registration of a domain name. AGP appears as a contractual term in some, but not all gTLD registry agreements.

AGP was implemented for consumers to correct of typos and other errors by registrants. Once a domain name is deleted by the registry at this stage, it is immediately available for registration by any registrant through any registrar. When a domain name is registered through an ICANN accredited registrar, that registrar may cancel the domain name at any time during the first five calendar days of the registration and receive a full credit for the registration fee from the registry.

Few companies have publicly taken on the serious serious issues of cybersquatting and the policies of ICANN which create and support the practice of domain tasting, a commercial activity which has little if any legitimate justification in cyberspace. Few companies have the financial ability to take these matters to court and expose the seedy practices of cybersquatting, typosquatting and domain tasting. In many instances, the defendants are hard to locate or even identify, making the possibility of collecting damages remote.

In the Dell lawsuit, it is alleged that the defendants set up a network that cycled infringing domain names from one registrar to the next in order to hold onto the domains indefinitely without ever paying for them, all the while profiting from pay-per-click ads on the sites that often served visitors with ads for Dell's competitors.  These allegations suggest one of the most obvious examples of intentional bad faith cybersquatting. Unfortunately, this level of cyber and typosquatting is not only common, but rampant on the world wide web today.

These blatant squatters are also difficult to coral.  Because of private registration, it is often difficult to identify the registrant behind a particular domain registration. Even if the registrant is identified, the more sophisticated squatters use offshore companies to The complaint further charges that the registrars created and controlled a series of shell corporations in the Bahamas to act as the entities registering the domains, including Caribbean Online International, Domain Drop S.A., Domibot, Highlands International Investment, Keyword Marketing Inc., Maison Tropicale, Marketing Total S.A, Click Cons Ltd., Wan-Fu China Ltd. and Web Advertising Corp.

Continue reading "Dell Lawsuit Exposes the Seedy Side of Domaining and Domain Monetization"

Dell v. Belgium Domains et al: Potential Damages of $110,000,000.00

Dell, Inc and Alienware Corporation filed the federal complaint against BelgiumDomains, LLC, CapitolDomains, LLC, DomainDoorman,LLC, Netrian Ventures, LTD,  IHoldings.com, Inc., Juan Pablo Vazquez and Joe Doe Defendants on October 7, 2007.  The complaint was filed under seal until Dell could get its request for injunctive relief heard by the court, asking for an order that the domains get locked down and evidence be preserved, among other emergency ex parte relief .

Read the Complaint Filed By Dell Here. (large file, be patient)

Dell and Alienware are brought claims for cybersquatting under 15 USC 1125(d), trademark infringement and trademark counterfeiting under 15 USC 111491), trademark and trade name infringement under Florida law, trademark infringement and false designation of origin under 15 USC 1125(a), trademark dilution under 15 USC 1125(c) and various other causes of action under Florida law.

Defendants are alleged to be ICANN accredited registrars who developed a scheme to engage in broad -based computer generated typosquatting, leveraging their status as ICANN accredited registrars. Dell alleges that Defendants have registered over 1,100 domains which infringe their famous marks including the following examples:

Continue reading "Dell v. Belgium Domains et al: Potential Damages of $110,000,000.00"

Dell Cybersquatting Complaint Re: Domain Typo-Tasting

Follow the Latest Developments In The Dell Typosquatting / ACPA Lawsuit Here.

Dell claims that organizations doling out domain names have deployed a network of shell businesses that profit from internet web surfers who make typos while entering URLs.  These internet users use direct navigation by entering the URL directly in the address bar of their web browser, as opposed to using a search engines such as Google. It is becoming clear that a larger number of people use direct navigation and that a significant percentage of those people mis-type the URL into the browser address bar.  Unfortunately, this business model works best when the typographical error is related to a famous web site or company with preexisting trademark rights. Typographical errors by direct navigators looking for famous companies, such as Dell, creates enough traffic to make it worthwhile for typosquatters to pay for these domains and run the risk of lawsuits by trademark registrants. In this lawsuit, Dell alleges that these typosquatters have created a scheme to avoid paying any registration fees at all.

Dell's federal suit, filed in October with the U.S. District Court for the Southern District of Florida, names three registrars -- BelgiumDomains, CapitolDomains, and DomainDoorman -- and claims they have set up a string of Caribbean-based shell corporations that gain rights to typo domain names and take in the pay-per-click revenues, according to The Washington Post.

Continue reading "Dell Cybersquatting Complaint Re: Domain Typo-Tasting"

Free Cybersquatting Report

Traverse Legal offers a free Cybersquatting Report to anyone interested in determining whether or not their domain name is having traffic diverted, website visitors forwarded to competitor websites or are otherwise the victim of cybersquatting. 

Many companies go for months or years without realizing that their web traffic is being diverted to other locations as a result of cybersquatting activity.  Contact us for a free Cybersquatting Report and find out who's stealing your website visitors.

Judicial Watch’s Proposed Cybersquatting Claim Against Larry Klayman

In a recent ruling by United State District Colleen Kollar-Kotelly, Defendant Judicial Watch, Inc. has been allowed to amend its counterclaims against Plaintiff Larry Klayman in what is shaping up to be a somewhat ironic judicial battle between the watchdog group Judicial Watch and its founder Larry Klayman who is no longer affiliated with the organization. The complaint and counterclaims are detailed and expansive.  You can read the complaint here.  Of interest to me is the recent effort of Defendant and Counter-Plaintiff Judicial Watch against Larry Klayman for cybersquatting.

Judicial Watch's proposed cybersquatting claim is brought under the Anti-Cybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d). Am. Count. P P 106-16. To state a cybersquatting claim under the ACPA, Judicial Watch must allege that (1) JUDICIAL WATCH is a distinctive or famous mark entitled to protection; (2) Klayman's www.savingjudicialwatch.org domain name is identical or confusingly similar to Judicial Watch's mark; and (3) that Klayman registered his domain name with the bad faith intent to profit from it. 15 U.S.C. § 1125(d)(1)(A); Shields v. Zuccarini, 254 F.3d 476, 482 (3d Cir. 2001). Klayman does not contest whether Judicial Watch's federally registered trademark, JUDICIAL WATCH, is distinctive or famous, and the Court therefore assumes as much arguendo.

Continue reading "Judicial Watch’s Proposed Cybersquatting Claim Against Larry Klayman "

Free Cybersquatting Report

Traverse Legal offers a free Cybersquatting Report to anyone interested in determining whether or not their domain name is having traffic diverted, website visitors forwarded to competitor websites or are otherwise the victim of cybersquatting. 

Many companies go for months or years without realizing that their web traffic is being diverted to other locations as a result of cybersquatting activity.  Contact us for a free Cybersquatting Report and find out who's stealing your website visitors.

Domain Tasting Gone Bad

According to ICANN, domain tasting is defined as “the monetization practice employed by registrants to use the ad grace period to register domain names in order to test their profitability.”  The ad grace period, or AGP, is the 5-day period following a registration during which the registrant is entitled to revoke the registration for a full refund.  During this period, registrants conduct a cost benefit analysis to see if the tested domain names return enough traffic to offset the registration fee paid to the registry over the course of the registration period.  In other words, for six dollars or so, a registrant can register numerous domain names, which may include trademarks of others, in order to see if they can acquire enough revenue to justify such a practice. 

However, the recent case Dell vs. Florida Registrars may be changing all of this.  Trademark holders are rooting for Dell, while cybersquatters are undoubtedly hoping to mount a defense against claims of cybersquatting, trademark infringement, counterfeiting, dilution, and unfair competition.  Although the result is yet to be determined, it is clear that trademark owners are no longer standing by as cybersquatters seek to capitalize off of their valuable trademark rights.  So, whether you are a trademark holder or an individual interested in registering domain names, it is important for you to understand the distinctions between being a domainer and being a cybersquatter.  You may be conducting a legitimate business in one sense or exposing yourself to significant liability in another.  Contact us today if you wish for us to analyze your domain name, trademark, or cybersquatting issue. 

Dell Files Cybersquatting Lawsuit against Domain Name Companies

In a lawsuit filed in Florida, Dell charges Juan Pablo Vazquez of Miami, Florida, several unknown individuals, and a handful of domain name companies with violating its trademarks on more than 1,100 domain names.

The lawsuit, unsealed two weeks ago, accuses the defendants of cybersquatting, trademark infringement and dilution, counterfeiting, deceptive trade practices, and unfair compet