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.
John Levine is one of the most knowledgeable commentators on ICANN policy and domain issues. He has commented on domain tasting and offers one of the most cogent definitions of domain tastings I have read.
So-called domain tasting is one of the more unpleasant developments in the domain business in the past year. Domain speculators are registering millions of domains without paying for them, in a business model not unlike running a condiment business by visiting every fast food restaurant in town and scooping up all of the ketchup packets.
Since 2003, the contract between ICANN and each unsponsored TLD registry (.biz, .com, .info, .net, .org, and .pro) has added an Add Grace Period (AGP) of five days during which a registrant can delete a newly registered domain and get a full refund. Although this provision was clearly intended to allow registrars to correct the occasional typo and spelling error in registrations, speculators realized that this allows them to try out any domain for five days for free.
As soon as the speculators (who call themselves “domainers") figured this out, they started using automated software to register domains like crazy. They put up web pages full of pay-per-click ads, keep the few that make money during the five days, and refund the rest. Many of the speculative domains are expiring ones, since those might already be indexed in Google and have some traffic, others are slightly misspelled versions of existing domains to catch traffic from people who make typing errors.
Registries are close-mouthed about the number of domains that are refunded, but informed estimates from Bret Fausett, citing VeriSign’s Stratton Scavlos, and from Godaddy’s Bob Parsons say that it’s grown in recent months to be about 99% of them. That’s bad.
Domain tasting is worse than bad. It is undermining the legitimacy of ICANN, legitimate domain monetization practices, public confidence in the internet and potentially internet commerce. At Traverse Legal, we see the growing problem of internet lawlessness being played out every day. Our corporate clients suffer the financial consequences of domain tasting and cybersquatting. Our legitimate domain monetization clients get stained by the mud being slung against any business that doesn't have pre-existing trademark rights in a domain. The bad actors drag everyone down.