Ah, if only I had a dollar for every time a cybersquatter suggested a business partnership with the brand owner in response to one of my demand letters. Ally Financial, the Detroit-based bank holding company, decided it was fed up with such games and has filed a suit under the Anticybersquatting Consumer Protection Act (ACPA) against an Arizona man who attempted to profit off of domain names featuring the Ally name, according to a report by Domain Name Wire.
In its suit against Donald Jones, Ally states that he registered at least three domain names that used the Ally name, AllyBankLoans.com, AllyBancShares.com, and AllyNationalBank.com, and redirected them to VerteransNationalBank.us, which he owns.
Ally initially contacted Jones in writing, informing him of the bank's legal right to the domain names because of its established trademark, but Jones floated a "partnership proposal" in which he would only transfer the domain names if Ally agreed to work with him in a new banking venture. Ally rejected the proposal, and instead of handing over the domain names, Jones began redirecting the sites to the homepage of Ally's competitor Chase.
Ally states that Jones "attempted to engage in cyberpiracy" through his offer to sell Ally the domain names that it already had legal rights to. His intent to monetize these domain names that he had no claim to would confuse consumers and could cause Ally financial and reputational loss. In its suit, Ally seeks damages of between $1,000 and $100,000 per domain name, based on Court determinations.
Ally's actions in this case should be a model for brand owners suing cybersquatters. The company first attempted to regain the domain names out of court, but when it became clear that this tactic would be unsuccessful, it sued the cybersquatter under federal law and sought damages, something that UDRP cases do not provide.
Things could be about to get real for Filipino cybersquatters. The Filipino Senate recently passed the Cybercrime Prevention Act of 2012. While still awaiting passage in the Filipino House of Representatives, the proposed legislation criminalizes cybersquatting, making it a "punishable act." Those found guilty could face six to twelve years in prison, a fine of up to 500,000 Philippine pesos (the equivalent of about $11,600), or both.
That's quite a contrast to the U.S.'s Anti-Cybersquatting Consumer Protection Act (ACPA) of 1999. Although ACPA allows for the awarding of damages between $1,000 and $100,000 for cases involving willful cybersquatting, research by FairWinds in 2008 revealed that courts have rarely assessed damages at the upper end of this range. Accordingly, trademark holders prefer the relative ease and lower cost of recovering cybersquatted domains through the Uniform Domain-Name Dispute-Resolution Policy (UDRP), which only has the power to transfer or cancel domains, and therefore provides little deterrent to cybersquatters. The result? Just about anybody can register a domain that is identical or confusingly similar to a registered trademark with relative impunity.
If the Cybercrime Prevention Act passes, it will be interesting to see what happens to cybersquatting in the Philippines. As for the U.S., I suspect that the risk of twelve years behind bars would be enough to deter all but the boldest of cybersquatters.