Domain Squatting

I read an article today about Verizon winning a $33 million lawsuit over a company that has been using domains like myverizonwireless.com and verizononline.com to grab traffic and spoof users (Verizon awarded $33.15m against cybersquatter).

People have been fighting over domain names since the beginning. In the early days it was free to register domain names, so folks were getting domain names for their dog, or refrigerator, or grabbing up brand names with the idea that they could sell them to the companies who owned the brand.

Free went out the window (and with a monopoly and at $75 a year Network Solutions was making serious bank) and ICANN made a very simple rule -- if you own the trademark, or if you have demonstrable prior use, you can take the domain name away from someone.

Under this rule, Sting was able to get his domain name from a fan, but Madonna apparently had some trouble with the Catholic Church and prior use. Of course Sting, Madonna and the Catholic Church all have a lot of money to put together their cases before ICANN.

Free has come back in a fashion -- OnlineNIC got all those domain names by being a registrar -- they could register them for a week without paying their ICANN fees, drop them and then re-register them. Of course, with $7 registration from GoDaddy, squatting (some say 'speculating') is a pretty cheap game. We have a client who paid $26,000 for a domain name, just because he thought it sounded good, not for trademark reasons.

What made the Verizon lawsuit interesting was that they got a judgment for $50,000 for each of the 633 domains Verizon claims were created specifically to be confused with legitimate Verizon brands, totaling up to that $33.15 million. That is, the got a judgment against OnlineNIC, but they can't actually find anyone who works for the company.

Ironically, Verizon got what they could have with a simple ICANN complaint, that is, they got control of the domain names. I say 'ironically' because they've parked all those domains with Network Solutions, who runs advertising on parked domains, which is exactly the complaint Verizon had with OnlineNIC. The end game is the same, only it's a friendly company getting the ad revenue instead of the obscure company Verizon sued.