New technology is now in the hands of "domainers," those who acquire domain names without the bona fide intent to use them, generally for re-sale. The legal turf is now growing between trademark holders against the domainers. Below is a brief overview of activities that may hurt your online intellectual property.
1. DOMAIN NAME "TASTING." One can register a domain name and return the domain name within five days for a full refund. Domainers acquire names and view the traffic that is generated over a five-day period. This is called "domain name tasting." Domain name tasting allows the domainer to conduct a free "market survey" into the ways in which Internet users are mis-typing a bona fide trademark that is used as a website address.
Domain names that generate traffic are then purchased and held, and non-trafficked domain names are returned. Those that are purchased and held are re-routed to advertisers or others for a "pay for click" fee.
Domain name tasting has become rampant. For example, in March 2005, nearly 43,000,000 dot-com and dot-net domain names were registered. Only 2.5 million such names were deleted that same month. In contrast, only one year later, in April of 2006, 35,000,000 names were registered and 32.7 million were deleted within the five-day grace period.
2. DOMAIN NAME KITING. A domainer will set up two companies, Company A and Company B. Company A will taste domain names in bulk and then reject all of them. Simultaneously, Company B will then sign up the same domain names immediately after Company A has rejected them, so that Company B now gets to taste the domain names for an additional five days. Companies A and B engage in this repetitive tasting (domain name kiting) over and over. To the legitimate domain-name holder, this will tie up related domain names that may be desired.
3. FRONT-RUNNING. Also known as "domain name spying," when a person inquires about the availability of a domain name, but does not sign up for the domain name that instant, the registrar will "register" the domain name itself, thereby preventing the person from registering it later. Most typically, the registrar holds the domain name awaiting the user to come back to that registrar, thereby forcing the user to sign up with that particular registrar. This is annoying but generally does not cause any harm other than preventing one from keeping all domain names consolidated with one registrar.
Legal remedies exist but the solutions require creativity given that in these instances trademark law often intersects shifting technology and novel forms of infringement.
Neil Taxy, Esq. is the author of this post and may be contacted at ntaxy@lpslaw.com Mr.Taxy counsels a variety of business clients in trademark and online intellectual property protection strategies.
