In the United States, smoking is perfectly legal for people who are 18 years of age or older. Likewise, it is perfectly legal to consume alcohol if you are 21 years of age or older. Corner stores and supermarkets are required to check the identification of anyone trying to buy one of these products if they look younger than a certain age. There are also notices on the packaging explaining the health risks of consuming these products. Of course people still do consume the products after reading the warning labels, but the government lets them know the risk and gives them something to think about.
As it stands right now, knowingly profiting off of the trademark and goodwill of a company via domain name is against the Lanham Act and can lead to penalties of up to $100,000 per domain name. Also as it stands right now, this fact may not be known by thousands of domain registrants who knowingly register infringing domain names each day, but unknowingly break the law.
When I first entered the domain business, I frequently heard stories about the Internet pioneers who registered domain names of major brands before those brands thought to register them on their own. They were frequently rewarded with large sums of money from the brand owner, as Internet law was still fuzzy, and owning a generic domain name like Apple.com, Bud.com or McDonalds.com wasn’t against any laws. If a person does not know that they aren’t permitted to sell a domain name that includes the word Microsoft to the company named Microsoft, they may register the domain name with that intent. While seasoned domain investors know the law, unseasoned buyers may think what they are doing is legitimate.
I will be the first to admit that I registered a few domain names that may have infringed on brands while I was in graduate school when I first started out investing in domain names. Little did I know, there were laws against doing this – and this was in 2003! I am very fortunate that I never faced any penalties for doing this, and since learning about the Lanham Act, I haven’t knowingly registered an infringing domain name because I don’t have the stomach to worry about potential legal issues. No, I am not better than anyone else, but the knowledge of the law and knowledge of the stiff penalties encouraged me to stick to very defensible generic domain names.
With cybersquatting continuing to grow and be reported in the mainstream press, I think we need to begin to hold the registrars somewhat accountable. Sure it would be impossible to completely prohibit people from registering infringing domain names because who is to say what is infringing or not. However, I think the registrars should provide a notice at the checkout stage of domain registration if a person is about to buy a domain name that probably contains a famous mark. I said this same thing back in July, but as cybersquatting continues to grow, now is the time to reiterate it.
I don’t think registrars should disallow someone from registering a domain name with a famous mark as that would be utterly subjective. But I do think they should put a notice about the Lanham Act, in case a person is unaware of the ramifications of owning an infringing domain name. It is scary to think that a $7.00 domain registration can cause a $100,000 lawsuit.
Registrars should at least give notice to their customers. At a time when the domain industry is facing tumult from outsiders, domain registrars should at least do something to help protect and inform their registrants, rather than simply take their money and not care what happens after. I know this is a stretch, as we have seen some registrars automatically offer up advertising on domain names that are simply parked on their servers, and they don’t seem to pay attention to whether they are monetizing a trademarked domain name or not. It’s a stretch, but it’s time domain registrars become more accountable.
