This article was originally published in Bloomberg Law Reports’ Technology Law newsletter on February 29, 2012.
By Doug Isenberg
Barack Obama is a cybersquatter – that is, someone who registers an Internet domain name containing a variation, often a typographical error, of a company’s well-known trademark, with the intent of profiting when consumers mistakenly stumble upon a website using the domain name. (A couple of real examples: “olkswagen.com” and “hotmaiil.com”.)
It’s no surprise, really, considering that this type of activity has been going on since the early days of the World Wide Web, and statistics from the World Intellectual Property Organization show that a record number of domain name disputes were filed last year with its popular arbitration service. Cybersquatters typically make money by diverting traffic from the brands they target, displaying ads for related goods and services, selling counterfeit products or collecting personal information for illegal purposes.
Many of these cybersquatters are prolific “domainers” with large portfolios of domain names that violate the rights of brand owners and confuse consumers. In the largest domain name dispute decision, WIPO ordered the transfer to InterContinental Hotels Group of 1,519 domain names (such as “holiday-inn-grand-junction.com”) held by a single person in Germany – and that decision was just one of several filed against the same man, who also has targeted other hotel companies online.
But Barack Obama?
Well, not the Barack Obama, President of the United States of America. Apparently, according to a legal decision last year, “Barack Obama” was just one alias used by an unknown person who registered 62 domain names containing variations of the trademark “Links of London” (a popular European jewelry company), such as “linkoflondons.com”. The cybersquatter who impersonated President Obama registered the domain names under a variety of other whimsical identities as well, including “Sam Hooti,” “Jay Daddy,” “Bobo” and “Eastern Washington University.”
If a system that allows these kinds of legal shenanigans to occur sounds ridiculous, just wait. Right now, the Internet Corporation for Assigned Names and Numbers (“ICANN”), the non-profit entity charged with managing the Internet’s domain name system, is in the midst of a process for receiving applications to expand the number of top-level domain names far beyond .com and its existing alternatives. By this time next year, we could have hundreds of new top-level domains, such as .web, .nyc, .gay, .music, .hotel, .news, .money, .bank and .peace.
ICANN has moved forward with this expansion despite loud opposition from trademark owners and even some in the U.S. government (the FTC has referred to “the potential for significant consumer harm resulting from the unprecedented increase in new” top-level domains), and without widespread demand from anyone except those who are likely to profit from the trade in domain names. While big businesses – from pharmaceutical companies to the fashion industry – are likely to register in the new space (“lipitor.drug” and “tommybahama.jeans”, perhaps), many have said they will do so only defensively, that is, to prevent cybersquatters from taking further advantage of them, and their customers, online.
But, this domain name explosion will only confuse everyone even more. Will banking customers turn to www.bankofamerica.com, www.bankofamerica.web or www.bankofamerica.bank? And what about www.bank-of-america.bank or www.bankofamercia.bank? (If you didn’t notice the typo in that last example, then you might make it yourself – which could lead to disastrous consequences if you then enter your online banking credentials at a fraudulent website.)
Plus, there’s no shortage of domain names now. Of the 220 million domain names already registered, fewer than half use .com, which is still not exhausted – leaving countless opportunities to register in other top-level domains that already exist, such as (in addition to the somewhat well-known .net and .org) .biz, .name, .info and .pro. If you haven’t even heard of these (and there are others even less popular), which have been around for a decade and have never generated much demand, then why do we need more like them?
Paradoxically, the arrival of new top-level domain names comes at a time when “direct navigation” – that is, typing a domain name into a browser’s address bar – is becoming a less common way of accessing the Internet. Using Google to find a website, employing apps instead of the browser on a mobile device (and, increasingly on the desktop – witness Apple’s new Mac App Store and Microsoft’s forthcoming Windows Store) and even scanning newfangled QR codes may be making domain names less important. So, again, why would we need more of them?
Cynics, of course, say it’s all about the money. ICANN is charging a $185,000 application fee to those who merely want the opportunity to pursue operating a new top-level domain, and those applicants have hired consultants to advise them how to submit applications that are likely to succeed. Businesses of all sizes will be able to list their trademarks in a domain clearinghouse service (which will provide minimal protections) for a fee that has not yet been determined, and they can file objections to applications for fees that will cost thousands of dollars. Registrars (like GoDaddy and Network Solutions) will begin selling registrations tied to successful new top-level domain names for whatever price they believe the market will allow, while speculators and cybersquatters will readily pay for them – many of whom will later face legal action filed by trademark owners who hire domain name attorneys to enforce their rights.
All of this is coming about without any enhancements to prevent cybersquatters from hiding their identities (like the fictional “Barack Obama”) or to deter cybersquatters from wreaking more trademark havoc online (such as by allowing businesses to pursue monetary damages via arbitration).
There’s no reason to think that ICANN’s domain name expansion will lead to anything other than an expensive cyber-orgy as speculators, investors, marketers, brand owners and lawyers all fight for a piece of the dot-pie – while companies and consumers continue to get harmed and ultimately pay the price as the costs of doing business online increase.
It’s all a .mess.