Registrars Should Help Prevent Cybersquatting

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, or 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.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. A $7 registration is not going to result in a 100K lawsuit because it’s too easy and inexpensive to get the infringing name through UDRP arbitration. The only time it can get expensive is when the registering party decides to fight back.

    However, it does amaze me how many in the general public still don’t know the obvious. A couple of years ago I was scanning through eBay and noticed someone selling a name like (I can’t remember the exact name). I wrote to the seller, “Are you kidding me? Does the trademark Mattel ring a bell?”

    The seller wrote back and I was surprised to discover that he really didn’t understand he was doing anything wrong (after I explained, he pulled the name).

    And this is why your idea is a good one. I’ve always believed that if the domain industry polices itself – even on a basic level such as this – it helps to ward off those in government who will be tempted to over-regulate us.

    Several months ago, I read a story in the legal section of a domain forum. A person registered 5 domain name that clearly infringed upon the trademark rights of a Las Vegas hotel/casino. The person received a letter from the lawyers representing the casino demanding the names and a payment of several thousand dollars each, or they threatened to file a federal lawsuit demanding $100,000 each. I don’t know how it turned out, but I wouldn’t have wanted to be on the other end of that letter.

  2. I completely agree and thank you for this Blog Topic!
    I own my names .Ca, .Net, .Org & .Mobi…the .Com is parked!
    My main name and above etensions have relevance to my Domaining business with a website….It’s not even a Generic Name …
    I was searching though eBay a month a go to only 2 .Mobi’s being sold and get this using the “Actual Logos” of 2 Credit Check Firms to sell the .Mobi Name! As David, I wrote the seller as well, “I wouldn’t want to be him for all the the money in the world” He answered “You think I should unlist them?” Go figure.
    We have all taken that step until we learn and understood…and we have, and I couldn’t agree with Frank S more! I have told in a email…”Easy to see why you have earned that emblem you have!” you maske it evident with each post.
    Best Regards.

  3. Thanks for the link to the Lanham Act. It’s always refreshing to re-read it every now and then.
    Unfortunately there’s always going to be lawyers looking for ways to tap into that 100k, and likewise there’s always going to be people willing to take the risk to try and profit on an established brand name (or some other iffy bet.) Some will get caught and receive judgments against them and others will keep on flipping and skipping.
    Eventually the Great Google Eye in the sky will be navigated by legal teams around the globe to zap these ‘ex-patriots’ the very moment that they have accumulated enough profit from their infringement efforts. Giving the trial lawyer what she really wants, which is simply to push the damages model higher.
    Going forward I’d expect the current cap of 100k to rise based on future verdicts. Domain name litigation is a legal business that is growing quick especially among savvy IP lawyers and I’d expect case chasers looking for new practices to straddle to hop in the game soon. Black mask domainers with a, should I venture to say, ‘sound’ in and out plan that currently works for them will have to rethink their strategy. Once more case laws are formed by the lower and higher courts the game will be a much more risky one to get into.
    Just as Domainers can be very creative in their domaining practices, Lawyers can be very creative in their lawyering practices. But one thing is for sure, wherever is the smell of money they both will be.
    To anyone, especially those living in the U.S., who have domains registered, regardless of whether they’re TM’s or not, and who are earning a healthy amount of annual income from these assets (whether while parked or developed) will eventually raise red flags, and become like a wet seal who panics when they see the gray lips and ivory teeth of the legal sharks who have been intoxicated by the koolaid (opportunity). There’s simply no safe side-lines in this game right now – only blurry ones where we all better keep our heads up.
    Lastly, after reading your post and writing this comment all I can clearly see is yet another ‘It Just Makes Sense’ reason why I should JOIN THE ICA.

  4. Agreed with Elliot on the Update to David’s comment. I do know from direct contacts that if you get all “holy” and “above the law” with major corporations, they will make an example of you. In fact, I have a friend who was very near the end with a specific LV Casino myself. I do know from personal experience with my own Marketing company (we used to market for Wynn LV) that if you were even a partner and did not follow their strict branding guidelines, you were up for termination and penalties. Major Brands like Wynn do not screw around at all, little guy or not. They will prosecute. MasterCard is another company active right now. So, is CompanyX, they all are…exit TM domains everyone. Soon “giving them away” will be your BEST option.

  5. We also have to draw the distinction between a professional domainer and a neophyte trying to get into the business. I have NEVER met a domainer at TRAFFIC, DomainFest or the GeoExpo who said to me, “Really? I can get in trouble for buying a name and monetizing it as a blatant rip-off of someone’s trademark? Wow, I didn’t know that.”

  6. Registrars should at least give notice to their customers.

    Depending on what market the registrar is targetting, they might or might not them to those who don’t give notice.

  7. that’s important issue cos so many bank fraud involve deceivers using similar domain names like the banks’ to fake customers to give off and give away important personal details nad identifications.

  8. There are sites that offer free domain names. I think for legal purpose or for investment purpose, they won’t give away domain names and they shouldn’t , related to big names and companies and banks alike. They can sell them to those companies in future, and they don’t wanna get in law suit for selling them to others.

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