The idea of Cybersquatting is not knew: a person grabs a domain name of a well-known trademark or brand (i.e. “Nike.com”) to sell to the trademark owner or otherwise use the name to attract consumers to their sites for one reason or another. However, it appears that the Anti-Cybersquatting Act has done its job. Now, Cybersquatters are becoming Typo Squatters by buying up domain names spelled similarly to “real” companies to take advantage of consumers who mis-type the domain name they are seeking. Recently, the National Arbitration Forum dismissed a complaint against a Barbados businessman who purchased goggle.com, goggle.net, and goggle.org because it thought it lacked jurisdiction to hear the case. Google brought the case to get the Barbados businessman to transfer the mis-spelled domain names to it. Apparently, he used the sites to divert computer users to a survey promising a chance to win prizes. The survey is a scam to obtain e-mail addresses and blitz those e-mail addresses with spam. He gave out no prizes.
Apparently, typo squatting is becoming a huge headache for companies because it costs the companies of the 250 most-trafficked websites $ 285 million annually in lost sales and other expenses (ironically, those search engines who sell ad words or key word advertising would also benefit from the actions of the typo squatters). This is according to a 2010 study conducted by FairWinds Partners. FairWinds Partners is an internet consulting firm based in Washington D.C. According to a Harvard Business School assistant professor, top websites can easily be targeted by over a thousand typo squatting domains. Yes, typo squatting is not new, but it seems that the proliferation of online ad networks makes typo squatting profitable. Typo squatting also allows any e-mails to the mis-spelled domain names to go to the owner of the mis-spelled domain. This can have some serious implications if trade secrets or other confidential/private information. In fact, a San Francisco information security group, recently conducted a study to determine how much and what type of information a typo squatter may receive by virtue of owning the mis-spelled domain. The security firm set up phony domain names based on the 500 largest companies in the United States. The study received more than 120,000 e-mails containing confidential employee user names, passwords, trade secrets, and in at least one case, an e-mail providing the configurations for the routers at one large firm (including passwords). Obviously, this information can be used for corporate espionage.
So, how do you protect yourself against typo squatting? Well, the easiest way is the same way to protect against cybersquatting: register the domains yourself for your company. That way, the mis-spelled domains are not available to the typo squatters. What if you did not do that? Well, then there is always filing a complaint with the site, the ISP, ICANN, or in a court of law. The basis of these complaints would be that the mis-spelled domains are infringing on your company’s trademarks by causing consumers to confuse your site with the typo squatters’ site. A word of caution: while this may be true for mis-spelled domain names that have sites that may look similar to the trademark owner’s, I believe that it may not work for those sites which are obviously not affiliated with the trademark owner (e.g. the “goggle.com” example above where the typo squatter’s site is a survey). The companies seeking to protect their trademarks seem to believe that people using the internet are not very smart in the ways of the internet. I find that hard to believe. Yes, there are people who succumb to internet scams, but it seems to me that given that the internet is such a huge part of most people’s daily lives, that internet users are becoming wiser to these so-called scams. As I cited in my metatag blog posting, at least one court seems to agree with me that online consumers are not stupid nincompoops who cannot figure out that they landed at a site that they did not intend. Consumers landing at a page with a survey when looking for Google’s search engine would easily recognize that the site is not “Google.com.”
Instead of focusing solely on consumer confusion, companies and the courts should focus on the key element to the Federal Anti-Cybersquatting Act: bad faith intent to profit from the mark. Yes, consumer confusion is an element of trademark infringement, but it is only one of several elements and should not necessarily take precedence to the exclusion of the others. It seems that there is little argument that someone registering a domain name that consists of a mis-spelled trademark and then uses the domain to scam consumers or otherwise profit from the mis-spelling of the trademark has done so in bad faith. Now, please do not get confused, consumer confusion is still a mainstay of any action based on the Lanham Act (the Federal Trademark/False Advertising/Anti-Cybersquatting Act/Unfair Competition Act) and a company asserting any rights pursuant to the Lanham Act will need to show that there is a likelihood of consumer confusion. But, I believe that the courts or factfinders cannot be so hard on consumers.
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