CADNA recently released a report that predicts how much new generic TLDs will cost brand owners once they are released.  A lot of the attention paid to the subject of new TLDs has been focused on .BRAND TLDs and whether or not companies should register their own branded TLD.  In my experience dealing with various businesses, there seems to be the impression that once a company decides it will not register its own .BRAND, it will be in the clear and new TLDs will not be much of an issue.  The truth is, generic TLDs like .MUSIC, .ECO and .NYC will actually be a greater concern for businesses in terms of defending their brands against infringement and cybersquatting.
 
After ICANN released its predictions regarding how many generic TLD applications it will receive in the initial round, CADNA went to work calculating how much brand owners on average will need to spend to defensively register their brands and trademarks across these new generic TLDs.  It found that the initial launch will cost brand owners about $500,000 each, and that the cost to businesses worldwide could exceed $746 million.  The full explanation of these figures and calculations can be viewed on the CADNA Web site.
 
CADNA, which many know is a nonprofit that FairWinds helped to found, undertook the task of figuring out the cost of new generic TLDs in order to give brand owners an accurate picture of what impact the TLD launch will have on their brands and their bottom lines.  CADNA put forward this research to help illustrate how absurd it is to allow such a radical shift in Web site naming to be a complete free-for-all.  New TLDs are probably a good idea – some day.  But, it is never a good idea to build on a shaky foundation.  ICANN is broken and anticybersquatting laws are outdated.  If it underwent necessary reforms to improve its policy development process and Internet governance function in order to make public interest a higher priority, then a rollout of new TLDs would look very different.  There wouldn’t be a massive flood of extensions that would create an impossible challenge for trademark holders and law enforcement to protect consumers from the misuse of brand names.
 
Unfortunately, since releasing its calculations, CADNA has experienced some negative backlash.  Interestingly the negative reactions came specifically from new TLD entrepreneurs blogging about the topic.  All those who called CADNA’s projections bogus and charged the organization with fear mongering are the same people who have a vested financial interest in the success of new TLDs.  Not one of those critics contacted CADNA to ask for comments or for a further explanation of the calculations and methodology.  Instead, they simply wrote off the figures because the results were inconvenient for them and their business.  What it boils down to is this: these critics are calling CADNA biased when they are clearly as far from neutral as they can be.

One of the most common practices in domain name speculation is for individuals to register domain names related to current events immediately after news of the incident breaks.  Particularly popular targets for this practice are celebrities – it seems that whenever a star is involved in an activity that attracts media attention, especially a scandalous one, squatters rush out to register domain names related to the incident and capitalize on the buzz generated by the news.  It is often astounding how quickly these squatters move to snatch up the most pertinent domain names for breaking events.
 
Take, for example, Tiger Woods, who was involved in a car crash outside of his home last week.  According to the Florida Highway Patrol, the crash occurred at around 2:25 AM on Friday, November 27.  That same day, even before details about the nature and cause of the crash were revealed, the domains TigerWoodsCrash.com, TigerWoodsCarCrash.com, TigerWoodsCarAccident.com and TigerWoodsAccident.com were registered.  Of those domains, the first three are Pay-Per-Click sites.  The final domain, TigerWoodsAccident.com, hosts content related to the accident, including speculation and rumors. 
 
Another majorly newsworthy event that took place last week was the crashing of the White House State Dinner on Tuesday by a Virginia couple, Michaele and Tareq Salahi.  The couple managed to sneak by security and enter the White House despite not being on the guest list and managed to get photos with multiple guests, including Vice President Joe Biden, which they then posted to their Facebook pages.  As it turns out, Mrs. Salahi has been auditioning for a role on the reality TV program “The Real Housewives of Washington.”
 
Perhaps squatters were more preoccupied with brining their turkeys on Wednesday than with registering domain names, but the registration of domains related to the dinner crashing moved surprisingly slowly in comparison to the Tiger Woods incident.  By Thursday, only WhiteHouseCrashers.com and TheWhiteHouseCrashers.com had been registered, followed by WhiteHousePartyCrashers.com on Saturday. 

Playing off a joke made by Gilbert Gottfried during the comedic roast of Bob Saget that recently resurfaced in the Fark forums, Internet user Isaac Eiland-Hall registered the domain name glennbeckrapedandmurderedayounggirlin1990.com.  The Web site was set up as a parody meant to criticize television news host Glenn Beck’s interviewing and reporting tactics.  At the bottom of the site is a disclaimer that reads, “Notice: This site is parody/satire. We assume Glenn Beck did not rape and murder a young girl in 1990, although we haven't yet seen proof that he didn't. But we think Glenn Beck definitely uses tactics like this to spread lies and misinformation.”

Days after Eiland-Hall had registered the domain Beck took action, filing an administrative complaint with the World Intellectual Property Organization (WIPO).  The complaint claimed that the site was improperly using a trademark and the domain name was registered and being used in bad faith.  Eiland-Hall’s lawyer responded that because the site is a legitimate criticism site, his client has legitimate rights to the domain name.

Beck’s complaint does not actually prove that he owns any trademark rights to his name and the response to Beck’s complaint notes that, unlike a trademark that is actually being used by its owner, an intent-to-use trademark application does not create any rights in the mark until it is fully registered (and the owner must prove actual use in order for it to register). However, UDRP allows alternatives to proving trademark registration. In a recent decision involving ashleyjudd.com, the panel found that it is “well-established that where an actor has a sufficient reputation for her professional work under her name or stage name, that name is a mark in which she has rights for the purpose of the UDRP.”

This qualification of reputation allowed the panel to find that the domain name ashleyjudd.com is confusingly similar to the famous persona of Ashley Judd. The difference here is that ashleyjudd.com is a domain solely comprised of the actress’s name, whereas the domain containing Beck’s name may not be considered sufficiently confusingly similar to grant him rights to the name.

It will be interesting to see the outcome of Beck’s complaint—the UDRP exists primarily to deal with cybersquatting, not matters of defamation or libel, so WIPO is an unusual forum for this type of domain dispute.

As we mentioned in our Weekly News Brief, last week, a federal court in California ordered OnlineNIC to pay Verizon $33.15 million in damages for cybersquatting. OnlineNIC, a domain name registrar, had registered over 600 domain names that infringed on the Verizon trademark, which it used to host ad links and pop-under advertisements that earned them revenue. The ruling was initially handed down in December of 2008, but OnlineNIC protested, claiming that the value of the damages [$50,000 per domain] was disproportionate and that only a jury trial could determine what amount of damages would be appropriate. The district court judge rejected both of these claims, and ordered OnlineNIC to pay Verizon’s attorneys’ fees and cost in addition to the $33.15 million in damages.
 
A law firm that FairWinds has worked with for years once told me that they researched ACPA (Anti-Cybersquatting Consumer Protection Act) damages and found that, on average, judges awarded just $2,000 per domain. That is ridiculous – on a regular basis we find infringing domains that cost our clients well over $100,000 per year. Keep in mind that ACPA provides judges with discretion to award between $1,000 and $100,000 per domain.
 
The Verizon OnlineNIC ruling represents a huge victory in the ongoing battle against cybersquatters. Sarah Deutsch, Vice President & Associate General Counsel of Verizon and representative in the Coalition Against Domain Name Abuse (CADNA), is a prominent advocate for the elimination of cybersquatting and other abusive practices online. The ruling is great for Verizon and for all companies that have to deal with parasitic infringement. It shows that courts are taking cybersquatting and related offenses seriously, and raises the awareness level of the risks associated with cybersquatting.
 
However, while this verdict is a bite-back for registrars that allow cybersquatting (which is important – enabling cybersquatting should be punishable just as cybersquatting itself is), it is often difficult to get the cybersquatters themselves. I blogged about this back in December, but there are so few “big-time” cybersquatters who own thousands of names. Most cybersquatters own only a few names, which wouldn’t bring in substantial damages in a court. Given the amount of time and money required to file suit in the U.S. against cybersquatters and how unlikely it is that the damages awarded will be substantial, it often isn’t economically practical to pursue them. As a result brand owners often opt for UDRP, which at best orders a transfer of the domain name to the brand owner—there are no damages awarded through a UDRP.
 
In order to make the fight against cybersquatting easier, there need to be greater remedies available to trademark holders in the U.S. courts. Raising the threshold of damages would in turn establish more of a deterrent.
 
In addition, ICANN, as the organization in charge of the domain name system, must provide better guidelines prohibiting infringements and abuses of all kinds. So the question stands – is ICANN going to step up and disaccredit OnlineNic for its activities?