Dell is claiming that a series of alleged cybersquatting
instances constitute counterfeiting of its trade marks and is
seeking damages of $1 million per domain name infringed.
John Mackenzie, an intellectual property and technology law
expert at Pinsent Masons, the law firm behind OUT-LAW.COM, said
that businesses should band together to tackle the multi-million
dollar cybersquatting industry pro-actively.
"What is really needed and what may occur is a trade
organisation pushing a policing function whose only purpose is to
chase these people," said Mackenzie, saying that it could be
similar to business-funded copyright protection groups such as the
Business Software Alliance.
"Brands have no choice," he said. "This is turning from the
opportunistic registration of domains with people making small
amounts of money in garden shed operations into activity from
highly sophisticated organisations who are operating around the
world."
Dell has sued in the US District Court of the Southern District
of Florida claiming that a series of linked companies has
registered 1,100 domain names that are 'confusingly similar' to its
trade marks and therefore violate its rights. Controversially,
though, it also claims that a further set of domain names are
almost identical to its trade marks, and that this constitutes
counterfeiting.
"Many of the Infringing Domains are substantially
indistinguishable from, and thus counterfeits of, Plaintiffs'
Marks," said its court case.
Dell claims that the counterfeit domain names include
dell-biz.com, dellaccount.net, dellconsumercare.com,
dellmotherboards.com and dell-outlet.com.
It is harder to prove that a domain name is indistinguishable
from one of your trade marks than that it is confusingly
similar.
The penalties for counterfeiting, though, are substantially
higher than those for cybersquatting. Dell's suit seeks $100,000
for each cybersquatting domain, but $1 million per counterfeit
domain "due to the wilfull nature of Defendants' counterfeiting",
according to its suit.
The World Intellectual Property Organisation (WIPO) and others
run a dispute resolution process called the UDRP through which
trade mark owners can reclaim domains from cybersquatters. Unlike
courts, though, that process cannot award damages.
Mackenzie said that as the business of cybersquatting mushrooms,
businesses are taking a more formal approach to the problem.
"Brand owners are becoming increasingly disillusioned with the
sheer cost of pursuing these people through the UDRP process," he
said. "It costs $1,500 to bring a case over a single name and
effectively you get nothing in return. You may get your domain but
you are out of pocket."
"What brand owners will move to, I think, is taking the same
amount of money spent on UDRP proceedings and spend it on court
proceedings. There is no real answer to using a copy of someone's
brand to attract traffic: it's trade mark infringement," said
Mackenzie.
"If you go to court in the UK you will get costs. In the US you
will get statutory damages of between $1,000 and $100,000 per
domain," he said. "Even if you get just $1,000, one thousand
domains at those damages is $1 million."
Dell's case is against Belgiumdomains, Capitoldomains,
Domaindoorman, Netrian Ventures, Iholdings and Juan Pablo Vazquez.
Its case said that those companies acted together to keep domains
within the five-day 'grace' period after which no fees are due.
Cybersquatting has turned into an industry in recent years as
the growth of internet advertising has made the holding of domains
visited by mistake profitable. OUT-LAW.COM revealed earlier this
year that the world's 500 biggest companies all suffer from
typosquatting.
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