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.
In addition to a well established regulatory regime, flexible company structures, and the speed of registration, other advantages of registering a company for cybersquatters and domain tasters in the Cayman Islands, Bahamas and other Caribbean countries include:
- Complete absence of direct taxation - no corporation, capital gains, payroll, property or withholding taxes - and this can be backed by a 30-year Government guarantee.
- Anonymity - there are well-established mechanisms for cooperation with law enforcement agencies, both locally and overseas, to assure the highest standards of probity throughout the Islands' financial industry. Within this framework, protection of the legitimate interests of clients is safeguarded. Except where assistance to law enforcement agencies is mandated or authorized, disclosure of information by government officials, professional agents, attorneys and accountants and their staffs is forbidden by law under severe penalties.
- Minimal reporting requirements.
- Ready availability of investment, legal and other advice and good management services at prices competitive with those in other offshore centres.
- Ability to form a company with only one shareholder, with no minimum capitalization requirements.
The Registrar is allowed to release only the name and type of company, the date of registration, and the address of its registered office. This assures a rigorously upheld standard of privacy for companies and individuals seeking to hide themselves from the civil and potentially criminal ramifications of cybersquatters and typo squatters.
This is no doubt why Defendant Vazquez's lawyer, Richard Baron, who described his client as little more than a gopher for the principals of the registrar operation, says that Dell's attorneys are going to find it tough to prove that the registrars and registrants were one and the same business.
"In my opinion, they have a huge hurdle to tie the names of the registrants to the registrar, and that's the linchpin of the case," Baron said. "Without evidence of that kind of collusion, they have next to nothing."
Domain tasting of established trademarks and brands has become a pariah of epidemic proportions within the ICANN policies, rules and regulations. At some point, ICANN has to stop conducting meetings and requesting information on domain tasting and do something. ICANN"s reputation as an enabler hangs in the balance.
The reputation and legitimacy of domaining industry itself also hangs in the balance. Legitimate domainers registering high traffic generic domains need to continue to take a harsh stand against this sort of domain registration activity. Domain monetization players need to educate the public and distinguish their valid registration of generic domains such as shopping.com, music.com and other high value domains form the purposeful and intentional registration of famous marks for the explicit purpose of diverting traffic and consumers. Otherwise, they will be cast in with the true criminals. The business of domain monetization and domaining depends on its status as legitimate business. Domainers are already erroneously branded cybersquatters when the register weak or generic domains. This credibility gap will continue to increase as the public emotionally responds to the abhorrent and abusive behavior by Defendants being exposed in the Dell case.
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