Cybersquatters face Olympic-size lawsuit

In what is being billed as the single biggest crackdown on cybersquatters, three Olympic governing bodies have filed a civil suit in a Virginia federal court to shut down more than 1,800 rogue Web sites that they charge are profiting from official Olympic trademarks.

The suit was filed June 20 in U.S. District Court in Alexandria, Va., by the International Olympic Committee, the U.S. Olympic Committee (USOC) and the Salt Lake Organizing Committee (SLOC) for the Olympic Winter Games of 2002. They are seeking a court ruling to shut down the sites, all of which contain the trademark names Olympic, Olympics, Olympiad or their derivation in French or Spanish. Even misspelled names such as 2004Olimpics.com are cited in the complaint.

The organizing bodies charge that the domain name registrants are trying to capitalize on the popularity of the Olympics, with the Summer Games in Sydney, Australia, due to start in September. The Web sites include porn sites such as Olympicsex.com, registered by an Australia-based company, Aussie and NZ Sexuality Network, as well as gambling sites.

"Plaintiffs have encountered a large and growing problem of unauthorized persons registering domain names containing the distinctive, famous and world-renowned Olympic Marks with a bad-faith intent to profit from the goodwill of the Olympic Marks," the complaint states.

Thanks to billion-dollar TV contracts and hundreds of millions more in corporate sponsorships, the Olympics has become a major business for the host city and the Games' governing bodies. On the Internet, the Games are generating steady revenue through ticket and ad sales. Still, the official Olympic sites -- Olympics.com, SaltLake2002.com, USOC.org and Olympic.org, to name a few -- have generated anemic traffic, particularly when compared with major sports sites such as ESPN.com. If the Net is to become a viable source of Olympic revenue, the organization committees argue, the organizations need to boost traffic and crack down on cybersquatters that might confuse would-be customers.

"We're targeting those who we believe are using Olympic designations unfairly," says Jim Bikoff, a partner at Silverberg, Goldman & Bikoff, the Washington firm representing the plaintiffs. The defendants are in three general categories, he said. They have either registered the domains for resale (some of which have contacted the organizing committees directly to see if they'll buy back the domains at a huge markup) or are gambling or porn Web sites.

The plaintiffs are seeking to have the sites shut down or transferred over to the organizations, said Bikoff. Since the case was filed, Bikoff said, "several hundred" of the sites have contacted the firm to hand over the domains. He added that he isn't sure whether the suit will succeed in shutting down the sites prior to the Sydney Games in September.

Bikoff added that the case was filed in the U.S. to take advantage of recently drafted legislation, the Anti-Cyber-Squatting Consumer Protection Act. Under the law, the holder of a copyright or trademark can sue to shut down a domain name that is in violation of U.S. trademark laws regardless of what country the owner lives in. That's important for this case because the domain name owners come from 56 countries, Bikoff said.

The Olympic organizing committees have been staunch protectors of all intellectual property associated with the Games, trademarking names and insignias, such as the five intertwined Olympic rings. In 1950, Congress granted the USOC the exclusive commercial rights to the word Olympic and Olympiad under the Olympic and Amateur Sport Act. The governing bodies have turned these protective rights and marks into big business by licensing them out in the form of major TV and corporate sponsorship deals.

The governing bodies have a history of rigorously protecting their rights, going after companies big and small. In 1996, the USOC forced a small eatery in the town of Tonawanda, N.Y., to change the name of its brand of salad dressing from Olympic Specialty Foods to Olympus Specialty Foods. The USOC also sued retailers and T-shirt manufacturers for selling unauthorized Olympic merchandise. The SLOC turned its attention to the Net last October when it filed a federal lawsuit in Delaware seeking to shut down 25 Web sites that contained wording that reflected the 2002 Winter Games.

Jeffrey Tinsley, CEO of GreatDomains.com, a broker that sells domains, said he's not surprised by the suit. The Olympics organizers contacted his firm last year, asking to have a filter installed to prevent the sale of any domains containing Olympic trademarks. The firm complied. He added that the sale of trademarked domains is becoming a sketchy business.

"It's a liability, and nobody is going to want to buy a liability," he said.

In the view of Mitt Romney, the SLOC's chief executive, the lawsuit's hard line is completely valid.

"By participating in this lawsuit, SLOC is protecting the interests of the athletes and our sponsors as well as protecting the Olympic brand," Romney says.

Copyright © 2000 IDG Communications, Inc.

  
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