Attorneys Say Cyber-Squatters May Be Stopped Without Litigation (12/28)

Attorneys Say Cyber-Squatters May Be Stopped Without Litigation

Legal experts say cyber-squatters, people who register well-known company names and trademarks as Internet domain names, are growing in number and are detrimental to the corporate bottom line. Though many cyber-squatters refer to themselves as entrepreneurs engaged in "domain name arbitrage," money is usually not the motivation for this activity. "Most cyber-squatters are not making any profits, and in fact, most are losing money because registering a domain name requires a fee," says Mitchell H. Stabbe, a trademark lawyer in the media and information technology practice group of Dow, Lohnes & Albertson, PLLC.

Still, cyber-squatters pose several inconveniences to U.S. companies with recognizable brands. "First, a cyber-squatter's expropriation of a mark as part of a domain name deprives a business from using the mark as part of its domain name. This may result in consumers who are seeking a trademark owner's Web site to be diverted elsewhere and perhaps decide to stop looking, resulting in lost business opportunities for the trademark owner," explains Stabbe. "Second, a cyber-squatter's use blurs the distinctive quality of a famous mark and may, when linked to certain types of activities, such as pornographic Web sites, tarnish the trademark." Finally, he says businesses are required to police and enforce their trademark rights by preventing unauthorized use by third parties, and cyber-squatters make this endeavor more costly.

Businesses often pursue legal measures to curb cyber-squatters, but experts say the offenders frequently can be stopped without litigation. Stabbe recently regained the domain name rights for a major newspaper with a "cease and desist" letter to a cyber-squatter who had registered the trademarks of several large newspapers as domain names and linked them to a white supremacist Web site.

Andrew Norwood, intellectual property attorney with the Tennessee-based law firm of Waller Lansden Dortch and Davis, says Network Solutions (NSI), the private company that registers most domain names in the United States, has also instilled some measures of protection that can help solve the dispute without a court battle. "NSI has adopted rules that allow a party with a registered trademark to challenge a domain name including that mark," he explains. Under the policy, if the domain name is identical to a trademark already registered for protection by the complainant, NSI will place the disputed domain name on "hold." However Stabbe says this procedure will not result in the domain name being assigned to the trademark owner. "Rather, it denies use of the domain name to either party," he explains. Norwood adds that at least one judge has opined that domain name use is not equivalent to trademark usage.

As a prophylactic measure, Stabbe suggests business owners should consider registering domain names that might be viewed as infringing if registered by a third party. "For example, cyber-squatters frequently register domain names that simply add a hyphen to a two-word trademark, use a common misspelling, or add a generic term to the mark," he explains. He also advises registering these domain names followed by ".net" or ".org." "Such anticipatory registrations may preclude the headache and expense associated with any future enforcement action or litigation."