Squatting On Domain Names

4286 or you will reach the same place if you dial (818) 786-4AVN. A stroke of luck! AVN's online IP address is AVN's domain name is avn.com, so you don't need to look it up in your phone book, or even your web browser's bookmark feature. Currently, although there is a move afoot to change this. Network Solutions, Inc. ("NSI" or "InterNIC") has a monopoly on what has become a fiercely competitive world of domain-name issuance. But before delving into InterNIC's world, perhaps we should take a step back for a second. \n A hundred years ago, the number of companies and products in existence were few. Businesses were often identified simply by their owners or their location: "Joe's Diner" or "Main Street Drugs." At the turn of the century, there must have been a hundred places in the United States called "Joe's Diner", but none of them worried about any of the others because there was no possible confusion. Nobody expected Joe's Diner in Buffalo to be related in any way with a place called Joe's Diner in Council Bluffs. Even after telephones became commonplace, there was never a chance of calling the wrong place so long as there were no overlapping names in any area covered by a given telephone book. Main Street Drugs in Springfield had no reason to worry that one of its' customers would inadvertently call in a prescription to Main Street Drugs in Indianapolis because the Main Street Drugs in Indianapolis certainly had no listing in the Springfield telephone directory. The problem that the Internet has created is that all of the companies are now listed in the same "phonebook." so to say. \n If you have a company - let's say, Delta Widgets - you have to make sure that no other widget company capitalizes on your name or any of your business. But, because of the Internet, you now must go even further than that. Because even if Delta Widgets has a nationally and internationally registered trademark which is carefully policed, it can do nothing about the fact that Delta Airlines and Delta Faucets both have their own nationally and internationally and heavily policed trademarks which they are free to use, hypothetically, unless they decide to get into the widget business, or into each other's businesses. So, now assume that you, as the owner of Delta Widgets, want to get into Internet marketing. You rush to contact InterNIC to register delta.com, the perfect domain name for the home page that will send your widget business skyrocketing. But, low and behold, there are other "Delta"s in the world. In fact, delta.com is registered to deltaCOMM, a software company that got there first. They are kind enough to provide links to all of the other Deltas - Delta Air Lines, Delta Books, Delta Faucets, Delta University, Delta Dental, DeltaNet and Delta International Power Tools - all of which they beat to the punch. Now, if it turned out that the person who had registered delta.com actually was one of your competitors in the widget business with a different name, then you could do something to stop them. But because delta.com is registered to somebody in a different industry who happens to use the same trademark, you are sunk, as were all of those other Deltas. InterNIC operates on a first-come-first-served basis. So much for Internet 101. Now, on to the problem. \n Clever entrepreneurs figured a long time ago that huge corporations move with the speed of galloping snails when addressing new technology. And that makes sense. They are doing very well the way they are, why change? This entire situation has given rise to a new breed of entrepreneurs known as "domain name squatters" (aka "cyber-squatters" or "domain name-grabbers"). \n Assume for a moment that your Delta Widget company is a multi-national dynamo, monopolizing the lucrative widget industry at every corner of the globe. You have been marketing widgets through the usual channels of commerce for decades. Everyone knows about Delta's widgets! Meanwhile, some wise guy in his basement in the South Someplace with a little bit more foresight than your behemoth company has, figured out that sooner or later Delta Widgets will need to go on the Internet. Why? Nobody really knew the reasons a couple of years ago, but now they do: information about the locations of Delta's distributors; product manuals; specifications; lists of compatible products; the Delta Widget catalog on-line; and so on. This may all seem obvious to you, but it is not so obvious to everyone else. You read this magazine; they don't. So the guy in his basement in South Someplace plunks down the registration fee and registers deltawidgets.com. So, after you discover that the domain name delta.com already had been taken, you become even more alarmed to discover that the name deltawidgets.com also has been taken, and by somebody who had no colorable right to use it. So, you dial up deltawidgets.com on your computer and, low and behold, you find nothing or, even worse, links to the web sites of competing businesses. \n Basically, what this guy has been doing is generating traffic - and, therefore, profit - using your famous name. This traffic is maybe just enough to cover the InterNIC registration fee, or maybe some serious profit is involved. Meanwhile, you are absolutely frosted about the whole thing. So you call the guy up, only to find out that his only telephone line is constantly busy because it is always connected to the Internet. So you send him an e-mail. His response, "I got there first; too bad." So now what do you do? After all, Delta Widgets is a famous trademark and the law imposes a duty on trademark owners to police their trademarks so they do not lose their distinctiveness and their identity with the relevant product or service. The answer is that the domain name squatter has done a number of things which give you cause to go to court. The most substantial, of course, is the infringement of Delta Widgets' trademark. If the squatter is capitalizing on the trademark in any way which might cause a likelihood of confusion, such as using it to direct customers to other competing products, actionable infringement exists. Also, "likelihood of confusion" exists when a confused consumer thinks that he can type "deltawidgets.com" on his Web browser and expects to get something having to do with Delta Widgets. This is analogous to a hotel which puts out a sign that says "Holiday Inn" and, low and behold, when you walk in, it turns out to be a Ramada. The fact that a big sign at the front desk disclaims any association with Holiday Inn does not let the hotel operator off the hook for capitalizing on Holiday Inn's good name on the sign outside. And even if the domain name squatter is using the trademark for something entirely unrelated to the product it represents, so that there is not possible confusion, there is a new cause of action which has been created by Congress called "trademark dilution." The trademark dilution remedy is available when a famous trademark, even if not registered, is used in such a manner as to tarnish or diminish its value as identifying a distinctive product or service. Also, some people mistakenly think that trademark infringement remedies are available only to those who register their trademarks. Wrong! Most states have strong laws prohibiting deceptive business practices and unfair competition. Many include a provision awarding attorneys fees to a successful plaintiff. Capitalizing on someone's trademark or trade name, whether registered or not, often falls within the purview of these statutes. Moreover, there is a federal unfair competition statute - Section 43(a) of the Lanham Act - which applies to a multitude of evils involving deception concerning the origin of goods and services; that statute easily applies to domain name squatters. \n The bottom line is that domain name squatters can be dealt with. And if you are just a small guy confronted with a stick-up from a domain name squatter (i.e., "give me some money and I'll give you your name"), check out some of the other domain names that the villain has squatted. Strength is generally found in numbers, and if the villain is squatting on a healthy list of domain names, then you have an equally healthy list of individuals with whom you can join forces in order to deal with the guy. \n You shouldn't succumb to extortion by domain name squatters any more than the government should negotiate with terrorists. There are plenty of weapons in the legal arsenal against these crooks and you should take advantage of all of them.