A new US federal lawsuit charges that Dotster, one of the largest domain name registrars, has unlawfully participated in a massive cybersquatting campaign targeting companies such as Cingular Wireless, Disney, Ikea, Google, Neiman Marcus, Playboy and Verizon.
The lawsuit, filed on Thursday by high-end retailers Neiman Marcus and Bergdorf Goodman, alleges that Dotster abused its status as a registrar by "checking out" hundreds of domain names that closely resemble the correct ones — and then keeping only the ones that were visited by Web users who couldn't spell very well.
The misspelled domain name NeimuMarcus.com, when visited by ZDNet UK sister site CNET News.com on Thursday evening, included code in its Web page that references Dotster and its subsidiary RevenueDirect.com — and featured advertisements for Neiman Marcus rivals such as Bloomingdales and JCrew. By early on Friday, however, that Web site and dozens more had been taken offline.
Cybersquatting, the practice of registering domain names that may violate a company's trademark, is hardly new — it's been around for more than a decade. Also called typosquatting, it's led to high-profile spats such as Apple's successful attempt to claim iTunes.co.uk and Canadian teenager Mike Rowe's registration of MikeRoweSoft.com.
But the Dotster lawsuit involves allegations of a new twist on the concept: a registrar using its special status with the Internet Corporation for Assigned Names and Numbers to secure misspelled domains temporarily for a few days, measure the traffic, and then pay for only the ones that would be lucrative in terms of advertising.
Dotster did not respond to repeated messages left on Friday with its legal department and two other employees.
Neiman Marcus and Bergdorf Goodman's complaint and exhibits, which total 155 pages, include excerpts from a conversation with Dotster employee Scott Fish, who allegedly asked for $1,000 (£530) for the name BergmanGoodman.com.
"It gets a good amount of traffic right now, and would be a great domain to brand," said a purported email message from Fish to a prospective purchaser.
The unnamed purchaser replied: "$1,000? Really? Would you take $500 for it, paid through PayPal?" according to the email exchange included with the complaint.
Fish eventually agreed to sell it for $800, according to the alleged exchange.
While other registrars have been accused of this practice, and typosquatting has even been the target of a Microsoft Research project called "Typo-Patrol", this appears to be the first dispute with a registrar that's led to a lawsuit.
"What's unusual about (the allegation) is that it's not just any cybersquatter, it's a registrar, which is a problem," said Ann Ford, the managing partner of DLA Piper Rudnick Gray Cary's Washington, DC office, who specialises in trademark and copyright law.
Ford added that a lawsuit, rather than ICANN arbitration (a common way of resolving domain name disputes), was appropriate in cases involving registrar malfeasance. "Money damages as well as injunctive relief will better serve to shut down this typosquatter — if it is indeed the identified registrar — as opposed to simply having the existing bad faith domains transferred," she said.
The lawsuit — filed by the law firms of Christie Parker and Hale and Perkins Coie — charges that Dotster violated federal laws against trademark infringement and dilution, federal cybersquatting laws, and Washington state consumer protection laws against deceptive acts and practices.
Talkback
'... a registrar using its special status with the Internet Corporation for Assigned Names and Numbers to secure misspelled domains temporarily for a few days'. That sounds easy enough to put an end to; what justification could there be for it anyway?
This is a fascinating story, however. Thanks.
This is a start but... ICANN and Verisign need to stop hiding behind the tree and start doing their job to combat this problem. They are NOTORIOUS for collecting our fees on domain names and not doing anything to create a FAIR marketplace for us. It seems that they are PROTECTING the registrars so they can Unless they start furnishing us reasonable service, we should have the right to choose other companies to give our hard earned money too.
As it stands now, its a monopoly and we have no option but watch them do nothing.
"Over 35 million names were registered for the month of May. Of those just over 2.7 million were permanent registrations. That means that 92.3% of all domain names registered were part of a scam now known as domain kiting. These names were kept off of the market, they were used to generate search engine revenue – AND BECAUSE OF A LOOPHOLE ICANN REFUSES TO ELIMINATE – those 32.3 million names were used without being paid for."
Source: BobParsons.com
http://www.bobparsons.com/MayKiting.html
Any registrar that "kites" more than 10% of the registered domains per month should have their "registrar" status pulled from them and put back on the market. Also, pull their ability to purchase domains for 30 days. They should also be fined 2 dollars for each domain that has been returned. Hit them in the wallet or they are not going to stop. If this continues, people like myself, will have no option but to join the "kiting" community, just to be able to give our customers a fair shot in the marketplace.
The kiting wars will ruin business on the net as we know it since it creates an unfair playing field for all but the registrars.
Dotster is a start, but as you can see, ICANN and Verisign is looking the other way. Business are having to challenge the registrars and this should be the job of ICANN and Verisign.
If not, then why is it mandatory that we have to pay their fee to do little, if not anything.
Although I do not believe in a world full of lawsuits, this was long in the coming, and far from reaches the biggest violators of these practices.
As the former Director of eCommerce at a major .com, I stumbled upon these types of problems about four years ago. During my tenure with the company, I must have 'shut down' over 100 websites of true squatters, however began to see the pattern of consistent registrars who would only hold the domain for 1-3 days.
In fact, recently I've watched my expired domains pass through 1-4 hands before they were either deleted from the registry or they were sold.
I've even received emails to buy back my expired domains, while under these "three day" periods they are held by the registrar without fee.
This must STOP.
ICANN needs to realize SOMETHING IS WRONG HERE!
Many of their registrars don't even have a public website. C'mon!
And their response?
SILENCE