Cybersquatting

According to Sherdog.com, a website devoted the UFC and Mixed Martial Arts news, results, and fighting, the parent company of the UFC and WEC went to court to take over the domain name, TheUltimateFighter.com. Zuffa, LLC claims the registrant did not have the rights to use their “Ultimate Fighter” trademarks, a number of which are registered with the United States Patent and Trademark Office.

The domain name is currently listed for sale at Sedo, and according to the listing, it has received three offers. The UFC and Spike TV currently use a similar domain name, UltimateFighter.com to promote their Ultimate Fighter programming, which is known as The Ultimate Fighter.

Sherdog reported that the domain owner does not plan to dispute the lawsuit and intends to give the domain name to Zuffa, LLC. In my opinion, this is the smart move. The owner could have spent anywhere from several hundred to several thousand dollars (and quite possibly more) to defend his ownership rights, and the results are certainly not guaranteed. Even if he would prevail, I don’t know if that particular domain would be worth the price of defending it.   Certainly that would depend on the legal fees that would be incurred.

As Kenny Rogers once sung, “you’ve got to know when to hold ’em, know when to fold ’em, know when to walk away, know when to run.”

Thanks to Dan Cera for the tip.

I read another UDRP result today from the World Intellectual Property Organization that I think is strange – this time involving the domain name CookingWithRedBull.com. As you can probably already tell without even looking, the makers of Red Bull, Red Bull GmbH, filed the UDRP for this domain name. (UPDATE: As George pointed out in the comment section, the complainant requested the cancellation, and the panelist obliged. I haven’t seen that before… My mistake and apologies.)

In fact, the panelist agreed that the domain name infringed on Red Bull’s trademarks, too:

“So here, the Panel finds the Domain Name, <cookingwithredbull.com>, confusingly similar to the Complainant’s mark RED BULL. Moreover, not only is that well-known mark wholly incorporated in the Domain Name, it is identified with a drink and therefore may readily be associated with cooking. Thus the prefix “cooking with” does nothing to distinguish the Domain Name from the mark.”

“The Complainant’s assertions are sufficient to constitute a prima facie showing of absence of rights or legitimate interest in the Domain Name on the part of the Respondent.”

“It follows that the only use to which the Respondent has been shown to have made of the Domain Name prior to notice of this dispute (namely prior to his receipt of the initial cease and desist letter) is to lead to a website displaying, without permission, the Complainant’s logo and a picture of its product, with text likely misleadingly to convey to consumers the impression that the site was approved by or operated by the Complainant. This is not bona fide use under paragraph 4(c)(i) nor legitimate non-commercial or fair use under paragraph 4(c)(iii).”

“The Domain Name is clearly designed to attract Internet users familiar with the Complainant’s energy drink, since the confusing similarity between the Domain Name and the Complainant’s RED BULL mark would be likely to lead Internet users to wonder whether the Domain Name was associated with the Complainant. “

One thing that bothers me about this is that a canceled domain name will likely end up back in the drop pool, where it will be picked up by someone else. If Red Bull wants to continue protecting their mark, they would then have to file another UDRP or file a lawsuit against the next guy who gets it (unless they bid on it at a drop auction).

The inconsistency in results also bothers me, as the panelist didn’t provide rationale for canceling the domain name rather than transferring it. In the past, this same panelist has transferred other domain names, with recent transfers including Confo.com in March 2010, vertuemail.com and vertumail.com February 2010, Tati.com December 2009, and Legoland-california.com August 2009. To my untrained legal eye, the three elements of the Policy were met in the same was as the Red Bull domain name, yet they were given to the Complainant rather than canceled.

UPDATE: As George pointed out in the comment section, the complainant requested the cancellation, and the panelist obliged. I haven’t seen that before… My mistake and apologies.

I had a conversation a few days ago with someone in the legal department of a large company, and we discussed cybersquatting and the importance of buying potential typo domain names before a product launch, especially when the product is targeting children.

In our conversation, I mentioned that I am a domain investor. He stopped me me mid-sentence, and said something to the effect of, “I’ve had conversations with cybersquatters before who all claimed to be domain investors. With all due respect, how does what you do differ from cybersquatting?” In my opinion, it’s a very reasonable question, and I hope to be able to offer some clarity here, especially for people who found this site by way of a Google search for “what’s the difference between a domain investor and a cybersquatter?”

Domain Investing Definition:
Domain investors acquire many different types of domain names, and they either re-sell them (hoping) for a profit or monetize them with pay per click links, affiliate marketing, or web development. Domain investors actively buy, sell, or trade domain names that have these qualities: generic terms or phrases, made up terms or phrases, or trademarked terms or phrases.

Cybersquatter Definition:
Cybersquatting is the act of profiting from and/or monetizing domain names that either contain the trademarks or are typos of trademarks of known brands or famous people. Contrary to what some might believe, cybersquatting isn’t always clear and concise. In fact, more often than not, cybersquatting is a gray area that can really only be determined by a court, especially when a common term is trademarked by more than one company (Apple for example), or a domain name happens to contain a trademark but is unrelated to the trademark – like FurnitureBay.com for example.

Differences between Domain Investors and Cybersquatters:
Simply because cybersquatters would identify themselves as domain investors does NOT mean all domain investors are cybersquatters. Most domain investors I know choose to buy, sell, develop, or monetize generic domain names.

The business of investing in generic domain names is akin to buying real estate. Some people choose to buy land in an area they think will be developed in the future, rendering it much more valuable. They are content waiting for months or even years before selling. Others will buy property and build homes/apartments, and they will either sell or lease these dwellings, building a residual revenue stream.

One of the primary advantages of investing in domain names instead of real estate is that the carrying costs are much more minimal for domain names. In addition, there isn’t a MLS price guide, so domain investors with market knowledge have a distinct advantage when buying domain names privately.

The next time you think of a domain investor, don’t just assume that he or she is a cybersquatter. Domain investing is a legitimate business, and as with all industries, there are people who operate in gray areas.