This year, Internet domain name overlords ICANN have made two important votes – first, they decided to lift almost all restrictions on generic top-level domains (gTLDs). This means that along with your basic .com, .gov, and .net, private citizens and companies are soon going to be able to register almost anything they want – .josh, .Pepsi, or .food.

Some organizations are speaking out against this decision, saying that it could lead to disaster for brand owners.

ICANN is set to start accepting applications for new gTLDs in January of 2012. The second big decision made by ICANN this year is set to go into effect much sooner. The age of dot-xxx is upon us. Although the official “sunrise” registration period doesn’t kick off until September 7th, domain operator ICM Registry is accepting early applications from organizations who wish to control their names.

It took ICM Registry over 10 years to finally convince ICANN to allow the .xxx domain. And with the new adult domain on the horizon, companies are going into defensive mode. According to Reuters, ICM Registry has received over 900,000 requests already from companies that want to preregister a .xxx domain.

Many are doing this to block others from snatching up the domains in the future. For instance, a company like Stanley Steamer or Coke would want to register StanleySteamer.xxx and Coke.xxx – not to use the sites but to make sure others do not. You don’t want grandma doing a Google search and stumbling on something that’s going to turn her off Coke forever.

MTV has apparently already requested domains like spongebob.xxx and others to prevent cybersquatting. They have no plans to actually operate the site, however.

But one high-profile organization does. People for the Ethical Treatment of Animals is planning on not only registering PETA.xxx, but actually running it as a pornography site. According to Reuters, they will use the new .xxx porn site to “draw attention to the plight of animals.”

Of course, this shouldn’t be too surprising. PETA has been asking celebs to strip down in support of their cause for years. Their “I’d rather go naked than wear fur” campaign has featured notable celebs, all in the buff. A whole site dedicated to this type of advertising seems quite logical.

Yesterday, GoDaddy announced their pricing scheme for the new .xxx domains. Early registers will need to shell out $210 at first and then $100 each year in renewal costs.

PETA will probably attempt to avoid GoDaddy, however, as the two companies haven’t exactly see eye to eye in recent months. PETA called for a boycott of GoDaddy after their CEO Bob Parsons killed an elephant and threw the video online. It doesn’t look like it worked, however, as GoDaddy registrations actually went up following the elephant killing.

Would you visit a porn site run by PETA? Let us know in the comments.

The case is based on OnlineNIC’s attempts to take advantage of Verizon and its customers by using names that are easily confused with legitimate Verizon names.

OnlineNIC had illegally registered at least 663 domain names that were either identical to or confusingly similar to Verizon trademarks. The court had previously ruled that OnlineNIC’s registrations of Verizon-related domain names were designed to attract Internet users who were looking to access Verizon’s legitimate websites, and calculated the award based on $50,000 per domain.

Sarah Deutsch, Verizon VP
Associate General Counsel

In its most recent decision, the court ruled that OnlineNIC is "a serial cybersquatter," that, in "blatant and willful violation" of the Anticybersquatting Consumer Protection Act, registered Verizon domain names to "prey on consumer confusion."

The court found "OnlineNIC’s intent was to divert consumers searching for Verizon’s websites." In addtion to upholding the original decision, the court also ordered OnlineNIC to pay Verizon its attorneys’ fees and costs.

"We hope the court’s decision goes a long way toward protecting consumers from becoming targets of Internet abuses and frauds," said Sarah Deutsch, Verizon vice president and associate general counsel.

"Verizon is determined to protect our brand and consumers from cybersquatters whose businesses are based on misleading consumers."
 

 WIPO Domain Name Cases

This may become a bigger issue in social media. Recently we looked at a Twitter account purchased by CNN (they actually acquired the "services" of the account holder…presumably to avoid the buying/selling of a Twitter account and breaking any terms of service).

That may not have been a case of cybersquatting exactly, but it’s not hard to imagine it getting the wheels turning in the minds of the unethical. The same goes for Facebook Pages.

Chris Lynch at Inside Facebook recently discussed a Facebook page called "Brooklyn, New York," which is not owned by that city, but rather somebody trying to sell ads on it.  Lynch suggests that this could run counter to Facebook’s Terms, which say:

Facebook Pages are special profiles used solely for commercial, political, or charitable purposes. You may not set up a Facebook Page on behalf of another individual or entity unless you are authorized to do so. This includes fan Facebook Pages, as well as Facebook Pages to support or criticize another individual or entity.

"In this case, it’s Facebook setting the rules," says Lynch. "Although it’s possible for hundreds of Pages to exist with the same name, Facebook’s Pages team is working to consolidate all Pages named after companies or brands under the official ownership or the brand or its agency. However, whether those policies strictly apply to cases like Pages named after cities is more ambiguous."

There are many Facebook Pages that are simply there to support brands, as mentioned in the terms. They’re created by fans with no ill will. So what do you do if someone else has a page set up for your brand, assuming you don’t want to wait on Facebook to sort it out?

Actually Inside Facebook’s Justin Smith posted an article about this that we referenced at WebProNews a while back. Options you have include:

- Ask Facebook to transfer control of the Page to you

- Ask the Page owners to transfer control to you

- Ask the Page owner to share control with you

- Ask Facebook to shut the Page down

- Let the Page continue to exist, and start an "official" Page of your own

Each option has its potential pros and cons as Smith explains, but I feel like the last one will be the best option in many cases because it’s the one least likely to tick anyone off. If you demand it be shut down, you may or may not get your wish, but either way it may leave a bad taste in the mouths of people who are already fans of your brand.

In any case, I’d probably try to avoid the forceful options. It doesn’t seem logical to put your reputation in jeopardy over something that is promoting your brand in the first place. Certainly there would be exceptions though, and the situation should dictate the appropriate action.

Exactly 2,329 complaints were filed in 2008 under the Uniform Domain Name Dispute Resolution Policy (UDRP).  This represented an increase of eight percent over 2007′s levels and the continuation of a years-long trend.  (MarkMonitor offered an even scarier take last week.)

 WIPO Domain Name Cases

As for the future, ICANN’s getting ready to introduce new generic top level domains, and Francis Gurry, WIPO’s Director General, stated, "The creation of an unknowable and potentially vast number of new gTLDs raises significant issues for rights holders, as well as Internet users generally.  Cybersquatting remains a serious issue for trademark holders. . . .  [T]he sale and broad expansion of new top level domains in the open market, if not properly managed, will provide abundant opportunities for cybersquatters to seize old ground in new domains."

Companies may do well to register domain names defensively, then, even if they’re quite happy with their existing networks of sites.  Better to pay a small amount of money now than go through a huge hassle later.

Here’s one bit of good news, though: when it does come to a fight, the squatters usually lose.  A full 85 percent of WIPO panel decisions favored the complainants in UDRP or UDRP-related cases.

The report found that 80 percent of abusive sites flagged in 2007 were still active today

Cybersquatting continued to rank as brandjackers tool of choice for exploiting reputable brands, growing by 18 percent in 2008. In addition, phishers expanded their targets in 2008, with 444 organizations phished for the first time.

"Online brand abuse has reached a critical phase during which new exploits are accelerating while older threats endure, causing real and tangible harm to corporate reputations, intellectual property, customer relations and revenue streams," said Irfan Salim, president and chief executive officer of MarkMonitor.

"The good news is that brand holders have resources available to them to take action. The companies who are most successful in fighting abuse are those that make defending their brand a priority at the highest levels of management."

 A total of 440,584 instances of Cybersquatting were identified in Q4, followed by 86,837 instances of false association and 33,614 instances of pay-per-click abuse.

Consistent quarter-over-quarter growth in cybersquatting for two years indicates that brandjackers are increasingly leveraging trademarks as they make use of best practices in search engine optimization to divert traffic to illegitimate sites.

Ecommerce abuse increased by 46 percent over 2008 and 13 percent over Q3 to a yearly high of 24,589 instances.

Abuses of apparel brands grew 28 percent in 2008. Other industries that experienced significant growth in brand attacks included automotive at 21 percent, high technology at 21 percent, and food and beverage at 17 percent.

The United States, Germany and the United Kingdom continue to host the majority of brandjacking Web sites. More than half (68%) of Web sites that host brand abuse are in the United States. Germany hosts 9 percent followed by the United Kingdom at 4 percent.

Attacks against payment services increased 122 percent in the second half of the year and attacks against financial services grew 51 percent during the same period, an increase MarkMonitor attributes to the current economic crisis.

"Brandjackers are honing their techniques as they continue building their revenue on the good names of leading brands globally," said Frederick Felman, chief marketing officer of MarkMonitor.

"That 80 percent of abuse sites identified in our study last year remain active today confirms that abuse is economically sustainable for fraudsters. We expect attacks to grow both internationally and in complexity, further increasing the threat to organizations’ reputations and revenues."

The U.N. agency based in Geneva, received 2,156 complaints alleging abusive registration trademarks on the Internet representing an 18 percent increase over 2006 and a 48 percent increase over 2005.

"These increases confirm that ‘cybersquatting’ remains a significant issue for rights holders," said Mr. Francis Gurry, WIPO Deputy Director General, who oversees WIPO’s dispute resolution work, noting that a number of developments in the DNS are also cause for concern from the perspective of intellectual property holders, as well as Internet users generally.

The majority of complaints came from pharmaceuticals, banking, and Internet, retail and entertainment industries.  Pharmaceutical makers remained the top filers due to "numerous permutations of protected names registered for web sites offering or linking to online sales of medications and drugs," WIPO said.

WIPO parties settled a quarter of all cases without a panel decision. Of the remainder, 85 percent of the panel decisions ordered the transfer of the domain names in question to the complainant and 15 percent of the complaints were denied, leaving the names in the possession of the registration holder.

Most of the complaints came from the U.S., France and Britain, while respondents were mainly in China, Britain and the U.S.
 

Microsoft Sends In The Big Guns

Complete with titles enviable by the Department of Homeland Security, Microsoft declared war on cybersquatters and typosquatters using Microsoft trademarks to profit from online advertising.

Taking the lead of the initiative is Internet Safety Enforcement Attorney Aaron Kornblum, who looks to expand the company’s existing anti-phishing Domain Defense Program, operated in conjunction with Microsoft vendor Internet Identity of Tacoma, Wash.

“Microsoft has witnessed a virtual land rush for Internet domain names with the goal of driving traffic for profit,” said Kornblum. “Placing a high profile or pop culture trademark in your domain name is a tempting but illegal way to generate pay-per-click revenue.”

Internet Identity’s director of operations, Rod Rasmussen, said that on an average day more than 2,000 domain names are registered that contain Microsoft trademark terms. Of those, Rasmussen estimates that at least 75 percent are owned by professional domain name holding operations.

“These are all very conservative estimates,” he said. “We’re thinking that we’re really looking at 90 percent or more of domain registrations containing Microsoft trademarks as being these kind of operators.”

Microsoft cites domains like downloadvistaforwindows.com, freehotmail.net, gamesonxbox.com, halochamp.com, and msninforonline.com as examples of registered domain names that are not owned by the company, but are being used as PPC advertising vehicles to generate profits.

The practice registering Web site domains containing trademarked terms that are intended to catch the overflow of mistyped URLs or mislead searchers to profit from them was made illegal under the
Anticybersquatting Consumer Protection Act (ACPA), signed into law by President Clinton in 1999.

The ACPA imposes civil liability of up to US$100,000 in statutory damages for anyone who, with a bad-faith intent to profit, “registers, traffics in or uses a domain name that is identical to, confusingly similar or dilutive of” an existing trademark.

Microsoft has filed two civil lawsuits against a total of four named defendants the company says are profiting from domain names that infringe on its trademarks. The first suit names Jason Cox, of Albuquerque, N.M., Daniel Goggins, of Provo, Utah, and John Jonas, of Springville, Utah, doing business as Jonas and Goggins Studios LLC and Newtonarch LLC. Microsoft says they have registered 324 domain names targeting their intellectual property.

The second suit is against Dan Brown, of Long Beach, Calif., who allegedly registered 85 Microsoft-targeted domain names through his company Partner IV Holdings.

Just because these are the only individuals Microsoft knows by name, that doesn’t mean the company’s not going after 217 “John Doe” registrants. The company says its taking action to “unmask” defendants who have used privacy protection services to conceal their identities. Kornblum admits this will be challenge, as the action seeks to break through the fee-based services offered by domain registrars created to protect registrants’ personal information.

In conjunction with the aggressive litigation campaign, Microsoft will also be targeting online auctions of infringing domain names, seeking to have such auctions removed from online auction houses.

Last in the onslaught is a software tool developed the Strider Typo-Patrol Project, a research group led by Yi-Min Wang. The downloadable tool, called the Strider URL Tracer, allows Web domain owners to track down trademark infringments of their own online brand.

“Microsoft hopes to help Web surfers reach their intended Internet destinations,” Kornblum said. “Where you cross the line is when you misuse someone else’s intellectual property in your domain name.”

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