Are domain registrants unknowingly taking risks with their domain names if they aren’t parked or developed? Registrars like Godaddy and Network Solutions frequently put up landing pages with Pay Per Click (ppc) links, unbeknownst to the domain owner, when the domain owner doesn’t change the DNS after purchase. These links are frequently related to the subject of the domain name which could potentially pose a problem for domain registrants – especially if the domain may have trademark issues.
Take the domain name SuperYachts.com for example. The name is registered with Network Solutions, and the registrar is serving up ppc links for “Charter A Luxury Yacht,” “Private Yacht Charters,” and “Yacht Brokerage” among others. To my knowledge, the owner of this domain name is not receiving any compensation for any revenue generated by clicks. Since this domain name is fairly generic, there probably isn’t much risk with Network Solutions serving related advertisements, although I don’t believe it is right that they may not be sharing the revenue with the domain owner. I liken this to my last trip to South Florida where a person was charging people for parking spaces in a bank’s parking lot hours after the bank closed. I am sure the money he made from this endeavor was not shared with the bank!
In the case of a domain name like VoteBarak.com, the domain registrant could be opening himself up to a legal issue because Godaddy is serving ppc advertising. Although most of the ppc links are Barak Obama-friendly, one could be considered not so friendly – “Ann Coulter’s Column Free.” While some people may say it is perfectly legitimate to own a name like this, when a registrar serves advertisements, thus generating revenue, they may be putting the registrant in a precarious position. Since the law allows a registrant to own a name like this to voice his First Amendment right (fan site, anti-person site…etc), when revenue is being generated based on the famous person’s notoriety, a WIPO panel may see this as bad faith.
A worse situation is in the case of the domain name GoogleScores.com. This obvious TM is registered at Godaddy, with the registrar serving up advertising for various credit score links, piano score links, and even a link to “Free Google Software,” with a link to a Google-owned entiy. Whether the owner knows that this is happening or not, he is certainly opening himself up to potential liability in the form of a ACPA lawsuit or WIPO.
Registrars probably make millions of dollars annually from all the random domain names that have never been parked or developed by the owners but have ppc links served by the registrar. I would guess that many of these names are TM names that people new to the domain name business registered without knowing the laws about cybersquatting and are holding them rather than developing them. This problem may be hidden to them, could pose potential liability issues for them, and it would appear that registrars like Godaddy and Network Solutions are able to reap the reward without any of the risk.
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.
To sum this up, the first term congressman had his domain name expire (not close to being a generic/defensible name), and someone bought it and has pornographic PPC links up at Sedo. According to the article, everytime the staff called Sedo to attempt to buy it, the price increased. Although the congressman should have renewed his domain name, he is nice enough not to file a UDRP or lawsuit, which would have proliferated the public opinion that all domain investors have bad intentions. Is there any way we can help? How can we help? This is an opportunity to show that there is only a small percentage of people in this business who aren’t ethical, and the rest of us are hard working people not not trying to profit off of an innocent mistake or in tragedy in too many cases (VA Tech, Katrina, Columbine…etc way too many to name).
John Berryhill, a highly regarded domain attorney, was kind enough to reference this important UDRP case that may impact domain owners. The facts of the case are:
1) Original registrant sold CreditKeeper.com, a name that he registered in 2001.
2) UDRP was filed by HSBC Finance Corporation, as they have two registered trademarks for “Credit Keeper,” one granted in 2004 and the other in 2005, both of which were filed and approved after the domain name was created.
3) Respondant argued that he should be allowed to keep the name as it was registered prior to the TM, and those rights of the original registrant should be passed to him.
Attorney Berryhill argued that the new domain owner acquired all rights of the domain name, including the important rights that existed because the registration pre-dated the trademark approvals:
The Respondent contends that it acquired all rights to the domain name under a certain