Eric Goldman, Assistant Professor at the Santa Clara University School of Law and Director of the school's High-Tech Law Institute, made a post about domain lawsuits on his blog yesterday.
The post, which I linked to above, outlines the recent rulings in the lawsuit of Verizon California vs. Navigation Catalyst Systems.
This is an extremely interesting and potentially precedent-setting case regarding domaining and domain name tasting. The court condemns both practices, leading to a preliminary injunction against the domainer and its registrar based on the Anti-Cybersquatting Consumer Protection Act (ACPA). (...) As a result, this is a major loss for domainers and might very well force them to change their practices.
The defendants are Navigation Catalyst, a domainer, and Basic Fusion, its registrar. Navigation Catalyst engaged in some common domainer practices, including:
* high volume automated domain name tasting. Many of the registered domains have nothing to do with anyone's trademark, but some were typographical error versions of Verizon's trademarks (allegedly, nearly 1400 were variations of Verizon's trademarks)
* trademark "scrubbing" of domain names during the tasting period (both an automated blacklist and a manual review)
* disabling ads on any challenged domains and offering to transfer those domain names to the trademark owner
To me Goldman makes it sound like all domainers engaged in domain tasting, cybersquatting and typosquatting. But that is far from the truth! I've said this too often already and I actually don't want to repeat myself, but it has to be said again: There might be domain investors registering and monetizing trademark-infringing domains. This practice doesn't reflect the entire domain industry, however. Most professional domain investors, by which I mean those making a living off domaining, invest in generic keyword domains.
In the case discussed by Goldman, the preliminary ruling has been in favor of Verizon. Nothing wrong about that as far as I can tell, since there were TM domains involved. On the other hand, it's also good to see that the defendants called attention to Verizon's practice of monetizing typo and trademark traffic via its FIOS "service", although the court didn't want to hear about it.
Domain tasting as well as the registration of typo domains is a problem that has to be dealt with, but as far as I can tell it is no common practice among the majority of domainers anymore, despite what Goldman is saying. The industry has matured and it will continue to do so in the future. One-sided articles such as Goldman's blog post wrongfully create a bad image of the domain business. This, in turn, will lead to misinformed companies and lawyers suing domain registrants and registrars for their generic domain names!
Unfortunately, it can be observed that there is an increasing number of lawsuits against domain owners who rightfully hold valuable keyword or acronym domains only to be sued by large companies that don't have any comprehensible right to own the domain in question in the first place. Just take the recent LH.com ruling as an example. Lufthansa won the lawsuit against Future Media Architects and it was awarded this valuable two-letter domain name practically for free. That ruling was a joke, in my opinion, and what is even worse, is that such rulings will only motivate more companies to try their best, no matter whether they hold a related trademark or not. For your information, Ron Jackson did a good job writing about this issue in his July 2008 newsletter, giving you the other side of the story so to speak.