Domain-name wars: Rise of the cybersquatters

Trademark owners say cybersquatting on the Web has gone too far -- and they're pushing back.

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Domainers make a living by keeping thousands -- or hundreds of thousands -- of domain names. While some domainers are legitimate, most are not, Verizon's Deutsche contends -- and she has sued many of them. "Tens of thousands of variations of our brand are being monetized by domainers -- including some accredited registrars," she says.

Drawing a distinction between domain-name brand abuse (cybersquatting) and domain parking is important, says Jeffrey Eckhaus, general manager at domain registrar eNom Inc. in Bellevue, Wash. "Cybersquatting is illegal in the U.S., while domaining is a legitimate business," he says. ENom supports domainers with advertising services, but domaining is "not the main focus of eNom's business," Eckhaus says.

But domain parking is part of the core business model for some registrars, says Steve Metalitz, president of the Intellectual Property Constituency (IPC), an ICANN-sanctioned organization that advocates on behalf of brand owners.

Hollidayinn.net

Sites like hollidayinn.net are a headache for Holiday Inn parent company IHG.

Click to view larger image.

Playing defense

Trademark holders have responded to the problem by buying up "defensive" domain names so that cybersquatters can't use them, hiring monitoring services, pursuing violators through the UDRP process, and, increasingly, taking cybersquatters to court.

Dealing with the problem is not cheap. IHG has registered 4,200 domain names to protect its seven brands, which include such well-known names as Holiday Inn and Crowne Plaza, Goodendorf says.

Verizon has registered more than 10,000 domain names, mostly to protect its three most visible brands: Verizon, VZ and FiOS. "It's extremely costly," Deutsche says.

As costly as maintaining thousands of defensive registrations might be, paying $6 per year to maintain a domain name is far cheaper than the $1,500 fee to file a UDRP case with WIPO, especially when a business has hundreds, or thousands, of complaints to address, Isenberg says.

But even if it pays for thousands of defensive registrations, a company can't rest easy. Goodendorf describes the problem: Cybersquatters continue to register new variations of IHG's brand names, often in combination with other words, such as a city name, and many of these sites take visitors to competitors' properties or other travel industry Web sites.

"We cannot possibly buy every conceivable combination," she says. The company has prioritized which cybersquatters to go after based on factors such as the offending site's name, content and amount of traffic diverted from IHG properties. "We have to figure out where the most serious harm is -- and what is actionable," Goodendorf says. Many cybersquatters go unchallenged.

Monitoring services offered by companies like MarkMonitor or Arlington, Va.-based Cyveillance Inc. can alert the business to the existence of cybersquatters. But the services cost thousands of dollars per year, and the business still needs to review each case.

"Small to medium-size businesses are screwed," Felman says. "They can't afford our services. They can't afford lawyers. Consumers and small businesses get harmed the most."

IHG uses Cyveillance's monitoring services and receives daily alerts. "I have a person who does nothing but sort through those alerts and decide which to pursue. That's her full-time job," Goodendorf says.

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