Lawyer Says Domain Name Investors Are “Hijacking and Ransoming Domains”

PALM BEACH, FL – This is an interesting topic by itself, although I covered something very much like it just the other day in “Panels Consistently Find That ‘Domain Investing’ Is Legitimate Bona Fide Offering”.

A lawyer named Tamara Kurtzman wrote an article that appeared on the website of the American Bar Association which details her opinion that “Domain Name Investing” should really be considered “Domain Name Hoarding” and labeled as “Anticipatory Cybersquatting”.

Her reasoning for this is simple; domain names are unusually powerful with influencing a business’s success or failure. Sort of comical, not only does the article bash the practice of domain name investing, it also happens to create some beneficial sales literature and quotes which could be used by domain sellers and domain brokers.

A business’s inability to secure a domain name that sufficiently relates to its name or products, however, might well have a significant effect on its very existence.

– Tamara Kurtzman, American Bar Association

The attorney penning the article went into the similarities with regulation around the practice of scalping tickets and that the process of scalping tickets is already regulated even though it’s only determining someone’s personal entertainment, is ‘optional’ and not their businesses lifeline to survival. She also brings up the fact that the 800-number system is regulated, although extremely poorly I might add, to prevent hoarding phone numbers.

Although at first glance anticipatory cybersquatting might appear to be no different from other legitimate speculative practices, anticipatory cybersquatting is indeed unique in that it directly obstructs corporate opportunity and prevents rights holders from fully exploiting those rights. If a domain name under which a company wishes to offer its products has already been claimed, it must settle for a less desirable domain name that may be less effective in attracting customers.

The attorney also uses a very interesting choice of phrases which sound profoundly predatory, such as the “Hijacking and Ransoming of Domains”, these “Modern-Day Corporate Privateers”, the “Frustration of Corporate Opportunity”, these “Domain-Name Marauders”, these “Domain Name Privateers”, the practice “Obstructs Corporate Opportunity”

As such, a viable domain name is not simply a luxury in today’s economy, but rather a corporate necessity without which a business is unable to effectively compete in the marketplace. The inability of a company to acquire a meaningful domain can therefore directly influence the success or failure of that business.

– Tamara Kurtzman, American Bar Association

There is also a reference to other online alternatives, however, this attorney believed that “.com” is clearly king.

Although companies can, and sometimes do, choose to utilize “non-.com” domain names (e.g., “.lawyer” is currently available and “.esq” will soon be available), the majority of potential website visitors are most familiar with “.com” names––in fact, Internet-based companies are frequently referred to “dot-coms.” As such, when seeking a company’s website, consumers are likely to assume that the website is a “.com.”

– Tamara Kurtzman, American Bar Association

The writer is hopeful that efforts will continue by opponents of this so called “anticipatory cybersquatting” to pressure ICANN to take steps to prohibit this practice by adding a “not-for-resale” provision to the UDRP (Uniform Domain-Name Dispute-Resolution Policy) process or by incorporating a non-use condition into the UDRP by which registrants have a limited period from the date of registration in which they must make a “bona fide” use of the domain name.  

The problem is, most panels already consider the resale of domain names for higher sums than initially purchased as a “Legitimate Bona Fide Offering of Goods and Services”.

Due to the commercial value of descriptive or generic domain names it has become a business model to register and sell such domain names to the highest potential bidder. Such a practice – including the sale of the domain name – has been found to constitute use of the domain name concerned in connection with a bona fide offering of goods or services provided that the registration of the domain name was not undertaken with intent to profit from or otherwise abuse a complainant’s trademark rights.

X6D Limited v. Telepathy, Inc. WIPO Case No. D2010-1519 (Nov. 16, 2010)

Rarity, uniqueness and desire is what makes things valuable; perhaps she would like to rewrite history too? Now, when I wrote about this potential type of regulation back in 2017, I was very clear that I wasn’t saying it was going to happen, but what I did say, that it would likely be sought, and that is exactly what this wishful thinking is talking about.

Now it just has its own fancy name: Anticipatory Cybersquatting

John Colascione

About The Author: John Colascione is Chief Executive Officer of Internet Marketing Services Inc. He specializes in Website Monetization, is a Google AdWords Certified Professional, authored a ‘how to’ book called ”Mastering Your Website‘, and is a key player in several Internet related businesses through his search engine strategy brand Searchen Networks®