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Acknowledging the Anti-Cybersquatting Act

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.

Free .mobi Domain Name!

I received an interesting email promotion from Network Solutions today.

“Register a new .com, .net, .org, .biz, .info, .us or .name domain name extension for any term and get a free .mobi domain name for a 1-year term.”

I guess they have resorted to just giving .mobi names away. I use my Blackberry’s web browser all the time, but I have not had the need or desire to use the .mobi extension. Even though the Weather Channel has a “mobile compatible” website at Weather.mobi, I can still access my local weather by using Weather.com on my Blackberry. I still don’t see a need for this extension.

Non-PPC Development Option

I admit that I was surprised by Larry and Ari’s mega-expensive purchase of MegaYachts.com. How on Earth would they be able to pay down the $150,000 price tag for this name without going into the yacht business?

Obviously they know more about the name than many, but my bet is that they create an informational site with a form to provide hot leads to yacht dealers, or they could possibly create a database of yacht classifieds or yacht listings. The commission from a single yacht sale generated from direct navigation traffic to megayachts.com could possibly put them in the black for that purchase. This strategy would seem to be less difficult to procure than building a full yacht business, but could be just as lucrative if not more.

The beauty of direct navigation traffic is that people may be looking to buy product when they key-in your site. There will always be “tire-kickers” and window shoppers who have no interest in buying your product, but the few motivated customers that do enter your site may be willing to leave their contact information instead of clicking off to someone else. It only takes one buyer to turn a $1.00 click into a $100,000 commission check.

Great PR Opportunity

I think it would be an AWESOME opportunity for either domain investors with connections or the ICA to step in and help this Congressman retrieve his domain name at registration fee cost to him.

http://www.denverpost.com/news/ci_6369057

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).

Private Auction Service

I have an idea for a private auction service that can combine the efforts of a well-respected company like Moniker with the service of an exclusive domain broker such as Kevin or Alan. My idea is that a company creates a private auction for a single domain name on behalf of a client. The company would reach out to potential end users who would be most interested in purchasing the domain name. For example, if Candy.com was on the block, the company would reach out to Mars, Inc., Hershey’s, or Cadbury.

Similar to Scott Boras’, infamous blue satin binder he creates for every player he represents, the company would put together a formal presentation highlighting the attributes of the domain name and why it is of significant value. This presentation would be mailed to the C-Suite and Marketing Department of interested companies, and it would be followed-up with a call. The more highly the domain name is touted, the greater the interest.

Bidding on the domain name would be similar to the posting system in place for Major Leage Baseball teams to bid on Japanese baseball players. After a specified period of time, the executives would be required to submit a sealed bid for the domain name. On a set date, the auction company would provide the domain owner with the anonymous bids and allow him to review the bids. After 48 hours, the domain owner would decide whether to accept the highest bid or not.

Although there is more risk for the auction company than a standard auction, personally reaching out to end users is a much more lucrative audience than a domain investor conference. This service is also different than a broker’s service as the broker may not have the contacts in his rolodex, and this would be much more formal.

Sell Your Own Ad Space

Selling to end users is the goal of most domain investors who sell their names. Oftentimes, we have great domain names, but the end user isn

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