Wisconsin Secretary of State’s Domain Hijacked

XBiz reports that the Wisconsin Secretary of State, Doug La Follette, woke up one day to find that his website, douglafollette.com had become a “porn site.” Apparently La Follette didn’t see it as valuable after he completed his political campaign, so he let it drop. Soon thereafter, as happens with any and all dropped domains, a domain taster picked it up. Detecting some traffic, the site became a sponsored links page. It just so happened that the links were porn related.

The cybersqatter offered to sell the domain back to La Follette for $361. La Follette called that “porn extortion.” It also seems to be a violation of 15 U.S.C. Sect. 1129. See also, Personal Names and the ACPA.

New 11th Circuit ACPA Case

Southern Grouts & Mortars, Inc. v. 3M Company, No 08-15850 (11th Cir. July 23, 2009). I would write about it, but my good friend Darren Spielman already did at defendmydomain.com – here.

Domain Privacy Service Can Be Liable Under the ACPA

The wrong approach for a domain privacy service.

The Central District of California just issued this thoughtful, reflective, and lengthy opinion in a case two of my Los Angeles partners and I are working on.

Web hosting company, Solid Host, took the position that a domain privacy service should be held responsible for the actions of one of its customers, when that customer was a hacker who stole a Solid Host’s domain name, and the privacy service took a “not our problem” approach to the theft.

From a trademark practitioner perspective, the really interesting part is that the court sustained the viability of a claim that a privacy service may be contributorily liable under the ACPA for its customer’s actions.

While this is not a final ruling in the case, the theory that a privacy service can be held liable for the actions of its customers has passed its first test, and got past the privacy service’s motion to dismiss.

See Solid Host v. NameCheap, et.al.

In a UDRP Case, you have to do *some* work!

In my experience, the doozie arguments in UDRP cases usually come from Respondents. But, this Complainant takes an honorable mention in the hall of fame of stupid domain name arbitration maneuvers.

In Mathiesen S.A.C. v. Allan Mathiesen, WIPO Case No. D2009-0087, the Complainant had legitimate Chilean trademark registrations for MATHIESEN, and the domain name in question was http://www.mathiesen.com. However, the Chilean registrations were granted in 2005, and the domain name appears to have been held by the same owner, Allan Mathiesen, since 1999.

There are potential exceptions, but it is generally accepted that under paragraph 4(a)(ii) of the UDRP, a party has a right to and/or a legitimate interest in a domain name when it corresponds to his actual legal name. See, e.g., G. A. Modefine S.A. v. A.R. Mani, Case No. D2001-0537 (A gentleman by the name of “A.R. Mani” registered armani.com and prevailed against Giorgio Armani on this basis).

I must wonder how the complainant’s attorney could have drafted the complaint and not at least dealt with the fact that the domain name and the respondent’s surname were the same. I have seen respondents come up with post-hoc “name changes” or claim that their “nickname” corresponds to the domain name. Accordingly, the complainant could have at least challenged the presumption that the WHOIS information was accurate – but they apparently didn’t bother to do so.

The panel found that this was an abuse of the arbitration process, and rightfully so.

A heartening factor in this case is that the panelist, Jeffrey D. Steinhardt, bothered to do some independent research, and reviewed the relevant web page and its online archives to see how the domain name had been used since its registration in 1999. UDRP Panelists certainly have the power to do so, and I believe that they have a responsibility to do so. Douglas Isenberg embraces this principle, but precious few others seem to do so.

The moral of the story: as a complainant’s attorney, you have to do some work. As a Panelist, you really ought to.

I Told You So, GoDaddy!

Thomas O’Toole writes about how one of my theoretical posts has now come to life.

Prof. Marc Randazza had a great post Is GoDaddy a Mass Cybersquatter? on his Legal Satyricon and, while it’s great fun to muse about these things hypothetically, I think everyone agrees that live action is best. Now we have it in Ubid Inc. v. Godaddy Group Inc., No. 09-2123 (N.D. Ill., complaint filed April 6, 2009).

Read the rest of O’Toole’s piece, Click Ads on GoDaddy Parked Pages Draw Cybersquatting Suit.

And thank you Thomas for noticing!

Pope says “God hates new domain names!”

by Jason Fischer (follow me on )

enjoying the holy sacrament of mobile internet

Okay; so maybe I’m misquoting. But the fact remains that the Vatican issued a statement denouncing ICANN’s new top level domain name scheme, which allows the highest bidder to purchase whatever extension they want (source). Under the new naming system, anyone could purchase the right to use “.catholic”, instead of “.com” or “.org”, as the ending for all of their website addresses. The Holy See is concerned that this will cause disputes amongst decentralized branches of various religions.

Amex’s Branding Blunder

The Domains gives us an insightful post about how Amex screwed up one of its greatest brands — and one of the greatest branding coups of all time.

David Sorkin Rules Against Ari Goldberger!

If you practice domain law, you know why this is big news.

I guess Diane Cabell will be getting the nod next time.

Breaking News: Kentucky Domain Case

The Kentucky Court of appeals has ruled that the Commonwealth can not seize 141 domain names due to their alleged affiliation with online gambling.

The Commonwealth initially filed an in rem (against the item, not against a person) action against the domain names — seeking to seize the domains as “gambling devices.” However, the statute does not seem to fit around domain names. The statute was designed to permit the seizure of slot machines and the like. The court of appeals wrote:

Suffice it to say that given the exhaustive argument both in brief and oral form as to the nature of an Internet domain name, it stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute “a machine or any mechanical or other device…designed and manufactured primarily for use in connection with gambling.” We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture under KRS 528.100. (Op. at 8)

The Court of Appeals seemed to sympathize with the Commonwealth, but exercised judicial restraint and refused to legislate from the bench.

Regardless of our view as the advisability of regulating or crimininalizing Internet gambling sites, the General Assembly has not seen fit to amend KRS 528.010(4) so as to bring domain names within the definition of gambling devices. Neither we, nor the Justice Cabinet, are free to add to the statutory definition. If domain names cannot be considered gambling devices, Chapter 528 simply does not give the circuit court jurisdiction over them. (Op. at 9)

The Court of Appeals also ruled on whether Kentucky law permitted the in rem proceeding against the domains. The court found that the in rem proceedings were not authorized by the statute. Given that KRS 528.100 is a penal statute, in order to seize the domains, it requires charges to be filed — none were. Without a conviction under KRS Chapter 528, there can be no forfeiture. (Op. at 14)

What is absent from the opinion is just as important as what is in the opinion. The Court did not address the constitutional issues including whether the use of the domain names was Commercial Speech and thus protected by the First Amendment. The Court also avoided discussing whether due process would permit Kentucky to exercise jurisdiction over domain names that had no nexus to that state other than the fact that they could be accessed there.

However, this is not a criticism of the decision. Courts are supposed to avoid sweeping constitutional issues if a case can be decided on narrower statutory grounds, and the Court exercised this proper judicial restraint.

The decision leaves it open to the Kentucky legislature to amend its statute to include domain names as “gambling devices.” However, I don’t think this will result in a renewed effort. As the court discussed the fact that domains could not be seized in an in rem proceeding of this kind, it hinted that the entire case had a bit of a foul smell to it. Instead of bringing criminal charges, with their higher burden of proof, the Commonwealth farmed this case out to a private law firm that was working on a contingent fee basis — apparently banking on a big payday if the domain owners wrote checks rather than standing and fighting. The Kentucky Court of Appeals appeared to find this a bit distasteful.

This deficiency in the Commonwealth’s case is further amplified by the conspicuous absence of the Kentucky Attorney General, the Commonwealth’s chief law officer, who pursuant to KRS 15.020 clearly has the authority to pursue the prosecution of crimes under KRS Chapter 528. The Secretary of the Justice and Public Safety Cabinet has no such authorty. (Op. at 15)

Accordingly, Kentucky could amend KRS 528.100 to include domain names, but that still wouldn’t authorize a civil in rem proceeding to seize domain names owned by foreign companies and operated outside the Commonwealth. If Kentucky wants to seize these domain names, they will have to amend KRS.100, then bring criminal charges against the domain owners, meet the higher burden of proof required in a criminal case, and if they score a conviction (despite the obvious constitutional issues), they can move for an order of forfeiture. However, bringing criminal charges takes the profit motive out of the equation, as the domains (if seized) would have no resale value to the Commonwealth, and a private firm could not take a criminal prosecution on contingency.

Full opinion available here.

Due Diligence For Domainers

Barry Goggin admits that he isn’t a lawyer. Nevertheless, his post at Predictive Domaining discussing domaining due diligence should be on every domainer’s desk.

Simple due diligence before buying a domain will help you avoid 99% of problems but there is no guarantee. As you will see if you read the cases, how you use the domain can be a critical factor.

Right on, Barry.

Cybersquatter Makes Good

The Bush library team seems as incompetent as… well, as incompetent as you would imagine anyone involved with such a project would be. They procured the domain name http://www.GeorgeWBushLibrary.com, then they forgot to renew the registration. It got picked up by a cybersquatter, Illuminati Karate.

“It worked out very well,” said George Huger, lead Web developer for Illuminati Karate in Raleigh, N.C. (source)

It worked out well indeed.

The Bush team could have picked the domain up for a $1,500 filing fee with WIPO. Even though the Bush team was careless, that doesn’t mean that Illuminati Karate had a superior claim to the domain. See “Finders Keepers” is not a legitimate defense to a cybersquatting claim. Alternatively, they could have filed a claim under 15 U.S.C. § 1125(d) and pounded Illuminati Karate for up to $100,000 in statutory damages and reimbursement of their attorneys fees.

My hat goes off to Illuminati Karate. While I find their actions to be, on one level, a bit repugnant. On another, I say good for them. Ol’ Dubya scammed us all for the past 8 years and Illuminati Karate scammed him back.

HT: Enrico Schaefer

Kentucky v. 141 Domain Names Order

The order in Kentucky v. 141 Domain Names has been issued. As my firm is involved in this case, I can not comment too deeply on it. However, here is an outline of notable points in the ruling.

1. Domain names are “property” subject to seizure. The court relied on the holding in Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003). See Order at 12-15.
2. The Kentucky Court has jurisdiction over the domain names by virtue of the Court’s holding that the domains have a “presence” in Kentucky. See Order at 15-22.
3. The domain names are “gambling devices” as defined under KRS 520.010(4)(a) & (b) since they allow Kentuckians to access gambling services. See Order at 22-25.
4. Poker, despite having significant elements of skill, is still “gambling” and a game of chance. See Order at 25-26.
5. Any domain names that block access to Kentucky residents are to be relieved of the forfeiture order. See Order at 39-40.

Kentucky Seizes 141 Domain Names

A Kentucky state court judge has issued an order seizing 141 domain names that Kentucky claims “are being used in connection with illegal gambling activity.” (source)

The Order states that “The Domain names shall be immediately transferred by their respective registrars to an account of the Commonwealth of Kentucky.”

This is unprecedented. A review of the 141 domain names in question reveals that some are not for gambling sites at all, but are merely pay per click sites. Some are also for free gaming sites (no money involved). Others are for sites that merely discuss gambling.

My commentary on this will be limited, as my law firm represents a number of affected entities, and we are in the midst of taking action to rectify the situation.

UDRP Decision Discusses Privacy Services and Bad Faith

A recent UDRP case gave one of the harshest criticisms of domain registration privacy services rendered to date. See Ustream.TV, Inc. v. Vertical Axis, Inc., WIPO Case No. D2008-0598.

The majority of the Panel also finds that the use of a privacy shield in this case further supports its finding of bad faith registration. Although privacy shields might be legitimate in some cases – such as protecting the identity of a critic against reprisal – it is difficult to see why a PPC advertiser needs to protect its identity except to frustrate the purposes of the Policy or make it difficult for a brand owner to protect its trademarks against infringement, dilution and cybersquatting. In circumstances like this, the privacy shield may also allow registrants to transfer domain name registrations amongst themselves without any public record that there has been a transfer, thus allowing them to evade enforcement of legitimate third-party rights or to obstruct proceedings commenced under the Policy (see Sermo, Inc. v. CatalystMD, LLC, WIPO Case No. D2008-0647, which held that use of privacy shield can be “treated as evidence of bad faith . . . when serial registrants use privacy shields to mask each registrant’s actual date of registration”). Such use defies the Policy’s overriding objectives to preserve accountability for unlawful acts on the Internet and to curb the abusive registration of domain names and cybersquatting (see, e.g., Fifth Third Bancorp v. Secure Whois Information Service, WIPO Case No. D2006-0696; HSBC Finance Corporation v. Clear Blue Sky Inc., WIPO Case No. D2007-0062).

It didn’t help that the Respondent in this case seems to have pretty clearly provided perjurious testimony. Unfortunately, that kind of thing is not rare. See If you are going to lie in a UDRP case – at least be smart about it! Hydentra, LP. v. Xedoc Holding SA.

Despite the clear perjury and apparent bad faith, panelist David Sorkin dissented. No big surprise there given the hundreds of thousands of dollars he has made by being selected by respondents as one of their panelists-of-choice.

GoDaddy Gives Certified Appraisals for Cybersquatting Domain Names

The Domains Blog gives a report on how GoDaddy is not only selling domain names that clearly infringe on trademark rights, but selling certified appraisals of those domains. The Domains Blog, a domainer-industry source is deeply disturbed at this turn of events and proposes a domain parking code of conduct:

A. Parking companies must refuse to park any domain that infringes on a trademark. If parking companies need to hire a full time person to police this, then that’s the cost of doing business. If trademark domain holders (I will not call these people domainers) can’t make money on parking trademarked domains, the incentive for registering and holding them is gone.

B. Google and Yahoo have to block trademark domains from their system. Not all domains go through parking companies. Many go to Google directly through ad sense pages. Neither Google nor Yahoo can make money on trademark domains anymore. Game over.

C. Auction companies must not allow trademark domains to be sold on their platform. If a trademark domain holder cannot sell their domains on any of the auction platforms, then their incentive to register and hold such domains is greatly diminished.

D. Domain registrars have to peel off domains that violate trademarks and not allow them to be dropped and auctioned off. Registrars now regularly peel off the best expired domains for their own benefit, so they can remove the trademark domains at the same time for the benefit of the industry.

E. Registries upon releasing a new extension must allow all trademark holders to apply for their trademark domains for free (see out post of last week) and in any event not allow trademarked domains to be auctioned off. We all see what an embarrassment the industry suffered that the highest selling .me domain was a trademark infringing domain. This cannot be allowed to continue or be repeated when new extensions are released.

(Source)