According to Josh Bourne of the newly formed Coalition Against Domain Name Abuse (CADNA), over 22,000 domain names are infringing upon Apple’s iPhone trademark. This problem was originally identified on Jay Westerdal’s blog earlier this month. In many cases, I would bet Bourne is accurate, and this is a huge problem for generic domain investors. The amount of Ebay auctions for iPhone-related domain names clearly show that many of these people are buying iPhone-related names in order to make a profit from Apple’s iPhone trademark. Alternatively, many of these domain names are currently parked and earning PPC revenue. This makes it very easy for people outside of the domain investment business to label ALL domain owners/investors as cybersquatters. The major discrepancy I have is that there ARE legitmate uses for iPhone domain names (forums, tools, fixes…etc) that don’t intend to profit from the trademark. For this blog post, my intent is to only highlight the illegitimate uses of trademarks in domain names.
I’m not a judge of character, but this type of low hanging fruit is easy for the CADNA people to grab and gain the support of large companies and the mainstream, which can be seen simply by viewing the listing of industry giants that are members of their organization.
In my opinion, there are two different types of cybersquatters:
1) People who don’t know about the Lanham Act and are unaware that are committing a crime when they blatantly register a domain name BECAUSE it’s of value due to the trademark.
2) People who believe the revenue from their trademark domain names outweigh the risks of owning them.
There are also reasons why trademarked names are profitable:
1) People register these names and put them for sale on sites like Ebay because other people actually bid on them, creating a market for this type of name. People bid on these names because they are either stupid, uninformed, risk takers, or all of the above.
2) Large search companies actually provide PPC payouts to owners of TM domain names. If TM domain names weren’t profitable on their own, people wouldn’t waste their money and take unnecessary risks.
3) Registrars don’t prohibit people from registering trademarks (other than their own, of course). Although it would be a subjective process, nothing to my knowledge prevents people from registering trademarks. This would be bad, because the folks at Apple Vacations, for example, would have unfairly run into problems when they registered their domain name. Perhaps blocking the obvious trademarks (like Microsoft, Google, Yahoo…etc) would help fix things, although that too could be considered infringement on freedom of speech.
In my opinion, a majority of trademark inclusive domain names aren’t owned by malicious people, but rather those who don’t know it is against the law. As a measure against unlawfully registering a domain name with a trademark, what if registrars required consumers to check off a box acknowledging that they are aware of the Lanham Act and its penalties before every registration? Perhaps even a brief summary of the law along with the possible penalties of owning/selling/profiting from a trademarked name would act as a deterrent to people who may be unknowingly committing a crime.
I have seen beginner domain investors posting on domain forums, and many are shocked/scared when they read about the ramifications of being sued for violating the Lanham Act. As much as the domain investment community has grown, there are countless people trying to make money in it who may not know the laws, and by giving them a copy of the law (either in full legal terminology or in layman’s terms), they may reconsider at the point of purchase.
