In a recently-unsealed lawsuit relating to domain name tasting, Dell, Inc. has sued three registrars, along with other defendants, in Federal Court in Florida, alleging that the registrars, through various shell companies and individuals, have registered and profited from nearly 1,100 domain names that were "confusingly similar" to Dell's trademarks. The named registrars are Belguimdomains, Capitoldomains, and Domaindoorman. Dell has alleged that the registrars created numerous shell registrants who acted as fronts for the registrars, and registered various domain names that are similar to Dell's trademarks, along with domain names related to well-known trademarks of other corporations.
When "tasting" a domain name, a registrant is able to take advantage of the ICANN policy that allows the registrant to hold a domain name for up to five days before committing to purchase it. Many registrants who monetize the Internet by posting keyword-generated shopping-mall-type websites will test a domain name for its "click-through" value and return any domains that are not profitable within the five-day trial period. By registering thousands or millions of domains at a time, "tasting" has turned into big business for some registrants and registrars, and at the expense of many corporations who own valuable trademarks. Dell has alleged that the Defendants have perpetuated the "tasting" by cycling the infringing names from one registrar to the next, while holding onto the domains indefinitely and not having to pay for them.
Although lawsuits relating to cybersquatting or typosquatting of domain names are not new, what is unique about this suit is Dell's attempt to characterize the activity as "counterfeiting" of the trademarks. If successful on the counterfeiting count, Dell could recover damages up to one million dollars per violation, as opposed to a maximum of $100,000 per domain under federal cybersquatting laws.
Vol. 53, June 2010