Possible Liability for “Holding” Domains

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.