Merchandising Cybersquatting

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Merchandising Cybersquatting

• Intro to IP Prof Merges
• 3.31.09

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Merchandising Extension by Contract

• Merchandising and basic trademark theory
• What consumer associations are protected by a
  merchandising right?
• What other benefits follow from such a right?

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How does franchising work?

• National headquarters centralized assets
• Recipes, standard procedures, logos, other
  resources
• Local franchise locations
• Owners of real estate, contractual share of
  revenue

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Cybersquatting

• Two different legal regimes deal with this
• Domestic US law ACPA
• bad faith legitimate interest

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Shields v. Zuccarini

• ACPA Case
• Typosquatting at issue

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Joes Cartoons site

• http//joecartoon.atom.com/
• Post-Google environment may be a bit different .
  . .

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• John Zuccarini (born c. 1947) is an American
  businessman who served time in federal prison for
  violating the Truth in Domain Names Act.
  Zuccarini operated a domain name speculation
  business. He is reported as owning 5500 domains
  before his arrest.
• John Zuccarini was charged under "truth in
  domains" legislation
• Domain name speculation
• Zuccarini registered thousands of domains that
  were close misspellings or "typos" of popular
  sites such as Cartoon Network and Homestar Runner
  or even acquired domains identical to well known
  brands such as Hot Wheels. Speculators normally
  place a pay-per-click web page in place of the
  legitimate website visitors expect to find. A PPC
  page looks similar to a search engine page but
  the design additionally blankets the home page
  with a copious amount of links that are often
  related to the subject of the domain name. Under
  the normal model of business, the speculator
  profits from the money obtained from visitors
  clicking on these links. However, Zuccarini
  deviated from this business convention by
  redirecting his audience of largely children to
  pornographic websites.

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John Zuccarini
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Cybersquatting and speculation

• Markets and legitimacy
• Crucial role for law in determining and policing
  what are legitimate markets

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Society determines which transactions are
legitimate, and which are not

• The existence of a market does not, by itself,
  confer legitimacy

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Protection rackets Russian krysha
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Domain Name Tasting

• Spin Off on Old Fashioned Act of Cybersquatting
• Domain Name Tasting Exploits a Loophole in
  ICANNs Domain Name Registration Process
• You can Register Unlimited Domain Names for 5
  Days and Return them for a Full Refund.
• Tasted Names Infringe and Dilute famous
  Trademarks
• Infringing Domain Names are Parked on Temporary
  Websites Loaded with PPC Ads

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Other New Domain Name Abuses

• Domain Name Kiting Registrars Taste, Park
  Domain Name in Bulk and Drop Them. Using an
  Automated Process, They Automatically Re-Register
  Them Again and Again.
• Domain Name Spying Cybersquatters See Name You
  Search and Grab Them Before You Can Register Them.

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How Bad is the Problem?

• March 2005 Nearly 43 million .com and net
  domain names registered.
• Only 2.5 million names were deleted that same
  month.

• In April of 2006, 35 million names registered.
• Of those names 32.7 million were used again and
  again but never registered permanently!

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Connecting the Dots We Have Problem

• In April of 2006, only 2 Million Names Were
  Actually Purchased, Meaning that over 92 of all
  Domain Names Registered Were Part of Tasting
  Schemes!
• Of the 32 Million Domain Names Registered That
  Month, 50 infringed on the Rights of Trademark
  Owners

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Recent Litigation

• Dotster sued by Neiman Marcus and Bergdorf
  Goodman -- case settled
• Over 120 infringing variations of Verizon
  trademarks were included as an exhibit to the
  Dotster complaint
• March, 2007 Neiman Marcus sues Name.Com,
  another Registrar
• Many new cases from brand owners, including new
  Verizon suits

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They Meant What They Said

• 1999 Anti-Cybersquatting Consumer Protection
  Act.
• Senate Report
• Specifically, legislation is needed to clarify
  the rights of trademark owners with respect to
  bad faith, abusive conduct, and to provide
  adequate remedies for trademark owners

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Peta v. Doughney

• Initial interest confusion on the web
• Parody?