DirectNIC chief tries to dismiss cybersquatting suit

The CEO of DirectNIC is trying to wriggle out of a cybersquatting lawsuit filed by Verizon, seemingly on the grounds that the telco has been unable to track him down.
Sigmund Solares heads up the Grand Cayman-based registrar and lives in Florida, but since suing DirectNIC back in March, Verizon has not been able to find him to serve him notice.
Now, his lawyers are arguing on a technicality that the suit against him should be dismissed (pdf).
Verizon claims that DirectNIC and its directors, via a bunch of shell companies, cybersquatted “nearly every single famous trademark in existence”, including some of Verizon’s.
It filed an amended complaint (pdf) a month ago. Due to its inability to track down Solares, it served the Florida Secretary of State instead, which it’s allowed to do if the defendant evades service.
Verizon has filed a number of declarations from process servers who were unable to serve him, despite staking out his Tampa home on at least 10 occasions over the space of several months.
Solares’ lawyers now want the complaint against him dismissed on the grounds that he’s not been served, and that he was not evading service, he was just away on business and vacation:

no where in the Plaintiffs’ affidavits do the Plaintiffs allege any actions whatsoever on the part of Mr. Solares. The Plaintiffs’ complaint and affidavits merely recount their efforts to serve Mr. Solares. Such allegations cannot clearly show that Mr. Solares is evading process because they allege no actions on his part at all. Plaintiffs’ assertions only show Mr. Solares’ absence from Tampa during the periods when the Plaintiffs attempted to effect service of process.

In response, Solares has filed a fairly detailed account (pdf) of his whereabouts between March and September, which included trips to Milan, Miami, Aruba, Ireland and Boston.
Some of the dates and locations coincide with big domainer conferences.
Verizon’s complaint attacks DirectNIC on essentially two fronts.
It claims that DirectNIC’s practice of parking expiring domains – including those that infringe trademarks – constitutes cybersquatting. This is of course a fairly common industry practice.
It also claims that DirectNIC itself cybersquatted on thousands of domains via a number of shell companies, including NOLDC, Spiral Matrix, Kenyatech, Kentech, Speedy Web, Unused Domains, and Belize Domain WHOIS Service.
There’s a fair bit of circumstantial evidence connecting the firms, and UDRP panelists have previously inferred that they shared ownership, but I don’t think it’s ever been definitively proved.
I reported on this evidence in a bit more depth here.
It’s possible that more evidence could emerge during discovery, but the suit cannot proceed to that stage while the court is still figuring out whether Solares has been served or not.
Dell previously sued DirectNIC on the same grounds. Solares signed an affadavit denying he had anything to do with Kenyatech. That suit was settled.

Lego files a UDRP complaint every three days

Lego, maker of the popular building block toys, is rapidly becoming one of the most UDRP-happy big-brand trademark holders.
The company recently filed its 150th claim, and has so far recovered well over 250 domains that included its trademark.
With over 100 UDRPs filed so far in 2010, that works out to an average of roughly one complaint every three days, and a total spend easily into the hundreds of thousands of dollars.
Its success rate to date is 100%, with no complaints denied.
Its successfully recovered domains include oddities such as legogiraffepenis.com, which appears to be based on this amusing misunderstanding.
If Lego keeps up its current rate of enforcement, it will likely pass Microsoft in the next few months in terms of total cases filed. It’s already filed more than Yahoo and Google.
But it still has a long way to go to catch up with AOL, possibly the most prolific UDRP complainant, which has close to 500 complaints under its belt.

Trademark lobby keeps up pressure on ICANN

The International Trademark Association is continuing to press ICANN into commissioning a study of the potential economic “harms” its new top-level domain program could cause.
INTA executive director Alan Drewsen earlier this month sent ICANN a quick reminder (pdf) that it expects to see the study carried out before the new TLD application round launches.
The trademark lobby believes that new TLDs will increase costs to brand-conscious businesses through an increase in the number of defensive registrations and dispute proceedings they have to pay for.
ICANN hired some third-party analysts to look into the issue, and published a preliminary report in July that basically just speculated about studies that could be carried out in future.
The plan was to carry out a second-phase study, which was to begin after public comments on the first report had been analyzed and summarized by ICANN staff.
Three months after the public comment period closed, this analysis has not been published and there’s no news on phase two.
INTA’s latest missive also notes that the ICANN board does not appear to have discussed the economic study at its Trondheim meeting in September.
Drewson also refers back to previous correspondence, sent in early September by INTA president Heather Steinmeyer, in which she wrote:

trademark owners believe that such a study is not only a sensible recommendation, but an essential prerequisite before any rollout of new gTLDs.

It’s not clear to me whether ICANN also thinks the study needs to be completed before the new TLD program launches.
Such a study would presumably take some considerable time to compile, and noises from ICANN currently point to the program becoming finalized at some point in the next six months.
If the study were to conclude that new TLDs would be hugely financially damaging, after three years of work… well, red faces would be the very least concern.

Trademark holders think new TLD policies inadequate

Less than one in ten trademark holders believes ICANN’s policies go far enough to protect their rights under new top-level domains, according to a recent survey.
World Trademark Review is reporting that 71.6% of its survey respondents believe that the current Draft Applicant Guidebook goes not far enough to “prevent trademark infringement”.
Only 9.5% said they believe the DAG does contain adequate provisions.
The full survey will be published later this month, but today a few more results can be found over at the WTR blog.
The survey was conducted prior to ICANN’s recent Trondheim resolutions, which contained a few amendments to strengthen policies such as Uniform Rapid Suspension.

Government ‘cybersquatting’ case rattles India

Cybersquatting mischief is making headlines in India today, after the nation’s main opposition party accused the government of directing a confusingly similar domain name to its own site.
According to various reports, the opposition Bharatiya Janata Party served a “legal notice” on the ruling Indian National Congress party over the domain name bjp.com.
The BJP hosts its primary site at bjp.org. According to the party, the .com domain has been redirecting users to the Congress’ own site. Today, it resolves to a page parked at Sedo.
The contested domain is currently registered behind eNom’s privacy protection service. It appears to have changed hands several times over the years, most recently to an Indian.
Unless the BJP has some other evidence connecting its rival to the domain, it looks like this may be a case of cheap political point-scoring.

What .xxx means for trademark holders

Trademark holders have been screwed over by ISP domain name wildcarding more than they realise, I’ve discovered from the .xxx contract documents.
ICM Registry is planning a novel approach to trademark protection if its application to launch the .xxx top-level domain is successful, but it’s been watered down compared to its original plan.
Hypothetically, let’s say you’re Lego. You really, really don’t want some cybersquatter snapping up lego.xxx and filling it with… well, you can imagine what Lego porn might look like.
At the same time, for the sake of your family-friendly brand, you don’t want to actually own a resolvable lego.xxx either.
And you certainly don’t want to be forced to to hand some pornographer over $60 a year for each of your brands. Some companies could see this as supporting pornography.
ICM had originally planned to allow companies in this position to pay a one-time fee to have their brand.xxx turned off permanently.
Personally, I like this idea. It would give the IP lobby a lot less to complain about in discussions surrounding the new TLD program.
But the company may now water down this plan, called IP Protect, due to the way that non-existent domains are increasingly handled by some ISPs.
As you probably know, ISPs worldwide are increasingly capturing NXDOMAIN traffic in order to show search results and advertising links to their customers.
It’s generally frowned upon in DNS circles, and it’s now likely to have the effect of making IP Protect costlier and more of an administrative hassle for brand owners.
You’re Lego again. You pay ICM the one-time shut-down fee, only to find that Comcast is now showing its users links to Lego porn whenever they type in lego.xxx.
ICM president Stuart Lawley tells me that one option currently being looked at is to have IP Protect domains resolve to a standard page at an ICM-controlled server.
The problem here is that ICM has to pay ICANN and its registry back-end provider annual fees for every resolving domain name, and that cost will have to be passed on to the registrant, in our case Lego.
Lawley says that ICM is “engaging” with the ICANN intellectual property community to figure out the best solution. It appears that both options are still open.

Facebook sues TeachBook.com for cybersquatting

All your “book” are belong to us?
Facebook has filed a cybersquatting and trademark infringement lawsuit against TeachBook.com, a social networking site for teachers.
The suit claims the site unfairly capitalizes on the Facebook trademark by using the “book” portion of the mark to evoke the idea of social networking.
According to the complaint, one of TeachBook’s selling points is that many schools ban teachers from using Facebook in order to prevent kids extorting them using personal information.
I don’t know how popular the site is — it doesn’t look like much — but it appears that TeachBook also owns a trademark on its brand.
I doubt this kind of claim would hold up under UDRP rules (unless a “friendly” panelist got the case), which is probably why Facebook has resorted to the US courts.
CourthouseNews.com has a PDF of the complaint and exhibits.

Domainers get love, but no refunds for .co cybersquatters

.CO Internet has ramped up its anti-cybersquatter messaging, promising no refunds for trademark-infringing .co registrants, no matter how much they paid for their domains.
An “Open Letter to .co Domain Registrants”, published by the company yesterday, also contains a shout-out to domainers, which I think may be a first from a domain registry.
The letter points out, as I have previously, that .co is subject to the UDRP on the same terms as other TLDs including .com.

The outcome of a UDRP proceeding is binding, and no refunds will be given under any circumstances — regardless of how much money you may have paid to secure the domain; whether the domain was acquired directly via a domain registrar or through a domain auction venue; and whether you were unaware that you had infringed on someone else’s rights.

There’s similar text on the front page of COauctions.com, where the registry is currently auctioning off contested landrush applications.
Is this just a matter of legal ass-covering? Or are there some gray-area domains in the landrush auction?
Despite all the promotional work the registry performed in the run-up to general availability, there are still plenty of people who seemed to believe .co represented new, lawless territory.
The letter ends with the statement that “.CO Internet is committed to protecting the rights of brand owners, domain investors, and end users.”
Domainers getting some love in the same breath as brand owners is not something you hear every day, particularly from registries.

Cybersquatters already hitting .co

Just over 24 hours after the general availability launch of the .co top-level domain, the secondary market is already beginning to fill up with dodgy domains.
Aftermarkets including Go Daddy and Sedo are currently listing some names that are unarguably typosquats of famous brands, and plenty more that very probably wouldn’t beat a UDRP complaint.
Go Daddy Auctions currently has almost 200 .co domains listed, Sedo over 500. Of those, I managed to find a few dozen dubious registrations, mostly on Go Daddy.
It beggars belief that, with millions of decent greenfield domains available, somebody had the failure of imagination to register wwwgoole.co. But they did. It’s currently listed on Sedo.
Other probable typosquats found on Sedo this evening include yahhoo.co, listed with a £10,000 price tag, as well as yayoo.co, geogle.co and barclys.co.
Go Daddy has listed some more obvious brands: poptarts.co and tostitos.co for the foodies, sanfranciscogiants.co, washingtonnationals.co and seattlemariners.co for the American football baseball fans.
Somebody who pays way too much attention to Rick Schwartz registered bpoilspill.co for the quick flip.
Cartoon characters for sale include mariobros.co and goofy.co. Celebrities duncanbannatyne.co and mikeposner.co both get squatted.
Yahoo, Apple, Facebook and Microsoft all get targeted, with yahoomaps.co, iphonedeals.co, facebookme.co and bingsearch.co all receiving price tags between $5,000 and $50,000.
For the Brits, centerparcs.co, virginuk.co and bbciplayer.co are also all up for auction.
Bear in mind that these are just the domains that have been registered and listed for auction in the first 24 hours. There’ll be plenty more not yet on the market.
I’d estimate about 5% to 10% of Go Daddy’s .co auctions are currently UDRP fodder.
This is why trademark holders hate new TLDs.

Verizon hires investigator to track down DirectNIC bosses

Verizon has won a delay in its cybersquatting lawsuit against domain registrar DirectNIC, because it can’t seem to track down and serve its CEO, Sigmund Solares.
In its latest filings with the Florida District Court, Verizon says that it had to hire a private detective to track down DirectNIC director Michael Gardner, and ended up serving his wife instead.
But, two months after filing the suit, the company still hasn’t managed to track down Solares.

“Plaintiff continues to diligently attempt to serve the lone remaining Defendant yet to be served, Sigmund Solares… Plaintiffs continue to diligently try to locate and serve this Defendant.”

DirectNIC, previously known as Intercosmos Media Group, relocated to the Cayman Islands from New Orleans in 2008, which may explain some of Verizon’s difficulty.
Indeed, when Verizon turned up to serve the company in New Orleans, it found its old office (from where employees attracted global attention for live-blogging Hurricane Katrina) closed.
Verizon sued DirectNIC, along with several directors and alleged aliases, in March, claiming they had squatted on at least 288 domains that included Verizon trademarks.
The case is of note because Verizon alleges that DirectNIC broke US cybersquatting laws when it parked expired domains that contained Verizon trademarks.
Parking pre-delete expired names is a common practice among registrars, which makes the lawsuit puzzling.
But Verizon does appear to be digging for something else, its complaint suggesting a connection between DirectNIC and its nominal registrants that may not be entirely kosher.
Without legal discovery, its hunches could go nowhere. And before Solares is served, it cannot proceed to discovery.
The court has granted an extension until late August, or 30 days after Solares is served, for the first case management meeting.