Domain name parking of gTLDs

Introduction

Over the past ten years, there has been a steady increase in the number of generic top-level domain names (gTLD). As a result, people can currently register various gTLDs such as .asia, .pro, .tel, or even .xxx. In the near future, even more gTLDs will be available for registration. The new gTLDs will include .academy, .adult, .antivirus, .are, .auction, .art, .actor, .baby, .baseball, .cab, .dad, .earth, and many more domain names. The increased number of new gTLDs gives cybersquatters more options to register domain names and offer them for sale to companies owning trademarks contained within the domain names.

A cybersquatter is a person who registers a domain name with the intent to profit from the goodwill of a trademark belonging to someone else. The cybersquatter may also offer to sell the domain to another person or company who owns a trademark contained within the name at an inflated price.

The purpose of this article is to briefly discuss domain name parking (Section 2), examine two cases of domain name parking of gTLDs (Section 3) and explain how the owner of a trademark can take control over a parked domain name (Section 4). Finally, a conclusion is drawn at the end of the article(Section 4).

Domain name parking

Domain name parking is a term referring to the registration of an Internet domain name without the objective of using it for offering services, but to reserve the domain name for a future website, to protect the registered domain against cybersquatting, or to use the registered domain for cybersquatting.

Domain name parking can be either monetized or non-monetized. If the domain name parking is monetized, the registrant gains revenue from advertisements shown on the website referring to the domain name. If it is non-monetized however, an empty page or a page stating "Coming soon" may appear on the website referring to the domain name.

The proponents of domain name parking argue that it is beneficial for internet users because parked domains may deliver relevant advertising instead of serving Internet users with an error page, often referred to as "404 file not found".

It should be noted that the term domain name parking is closely related to another term, namely, domain name tasting. Domain name tasting is the practice whereby a party registers a domain name to test whether it is worth enough to pay the required registration fees. If the registrant finds that the cost of the registration would outweigh the projected profit value of the domain name by using it for a parking page, he/she drops the registration before the registrar's five-day grace period expires.

The difference between domain name parking and domain name testing is that domain name parking refers to the registration of the domain and keeping it parked over the course of a long period of time. On the other hand, domain name tasting refers to a registration of the domain name and keeping it for a very short time (the grace period).

Cases of domain parking of gTLDs

This section discusses two cases of domain name parking of gTLDs, namely, the "godrej.tel" case (Subsection 2.1) and the "heb.xxx" case (Subsection 2.2). In this regard, it should be noted that the gTLDs .tel and .xxx were introduced in 2005 and 2011, respectively. There were long discussions regarding whether or not .xxx should be launched. The two main arguments stated against the launch of .xxx were (1) more porn domains means more porn on the Internet, and (2) non-porn companies, schools, bloggers, and individuals will be scammed into buying "protection" on each new porn registry in order to safeguard their good name.

However, the proponents of .xxx domain name stated that .xxx might be used to protect children because .xxx websites may be easily detected and filtered.

3.1 "Godrej.tel" case

Godrej Consumer Products Private Limited ("Godrej") is a member of the Godrej Group of Companies, which is one of India's largest conglomerates, based in Mumbai, India. Godrej is involved in various industries, and the group's turnover is USD 2.6 billion. Godrej registered the GODREJ mark, but on March 24, 2009, a person registered the domain name Godrej.tel.

Subsequently, Godrej submitted a Uniform Domain-Name Dispute-Resolution Policy (UDRP) complaint to the WIPO Dispute resolution center alleging that the disputed domain name is identical to the trademark "Godrej" in which it has exclusive rights. Godrej noted in the complaint that the registrant of the domain was not, either as an individual, business or other organization, commonly known by the name "Godrej."

The arbitrator found that the domain name Godrej.tel was used by the registrant in such a way that a potential consumer accessing the website referring to the disputed domain name would have the legitimate expectation that he was communicating with Godrej. In the end, the Panel ordered that the domain name <godrej.tel> be transferred to Godrej.

3.2 heb.xxx

HEB Grocery Company, L.P. ("HEB"), is a grocery store chain with more than 329 stores, 76,000 employees, and over $15 billion in annual sales, based in Texas, U.S. HEB has been using the HEB marks in association with its grocery store services for decades. Moreover, HEB obtained the U.S. trademark registrations for its marks.

HEB and the registrant of heb.xxx, an individual located in the U.S. state of Georgia, had a discussion on the potential for HEB's registration of the domain name heb.xxx. On 29 December, 2011, HEB submitted a UDRP complaint to the National Arbitration Forum requesting the ownership of the domain name heb.xxx. The arbitrator found that the registrant of heb.xxx registered the domain in bad faith and ordered a transfer of the domain to HEB.

The possible ways that the owner of a trademark can take control over a parked domain name

Generally, there is nothing wrong in the use of domain name parking. However, if a domain is parked with the aim of profiting from the goodwill of a trademark belonging to someone else, the holder of the trademark may obtain the ownership over the parked domain. In order to do so, the holder of the trademark may either use litigation (Subsection 4.1) or the Uniform Domain-Name Dispute-Resolution Procedure (UDRP) (Subsection 4.2).

4.1 Using litigation

If the trademark holder uses litigation, he may obtain monetary damages, attorney's fees and costs, and/or an injunction, in addition to the cancellation or transfer of the improper web domain name to the original owner. Furthermore, under some acts, such as the US Anticybersquatting Consumer Protection Act (ACPA), the holder of the mark has the option of suing for statutory damages for $1,000 to $100,000.

The main limitation of using litigation is that it can be used only for domain names registered in the country where the claim is made. For instance, claims under ACPA can be made only for domain names registered in the United States. If the disputed domain name is registered with a foreign registrar, the plaintiff must obtain personal jurisdiction over the domain name owner or use another dispute resolution procedure, such as the UDRP.

Panavision Int'l L.P. v. Toeppen is an illustration of a case brought under ACPA. In this case the domain name Panavision.com was registered by Dennis Toeppen. Toeppen used the website referring to the domain name to display photographs of Pana, Illinois. The trademark owner, Panavision, asked Toeppen to cease using the domain name. In response, Toeppen offered to sell the domain name to Panavision for $13,000 but Panavision refused to pay the requested price. Toeppen then registered Panaflex, another mark owned by Panavision. The district court in California granted a judgment in favor of Panavision and prohibited Toeppen from further use of the marks PANAVISION and PANAFLEX as domain names. Finally, the court ordered Toeppen to transfer the domain names to Panavision.

4.2 Using the UDRP

UDRP is a dispute resolution procedure offered by ICANN accredited dispute resolution providers. UDRP is an administrative procedure allowing trademark holders to submit complaints to accredited ICANN dispute resolution providers for disputes involving domain names that have been registered by an ICANN-accredited registrar. Approximately 75% of UDRP cases result in the cancellation of the cybersquatter's domain name registration. UDRP proceedings are usually quicker and cheaper compared to the use of litigation. An important advantage of UDRP is that it is specifically designed for international domain name disputes. The reason is that the procedure is based only on filed documents without the need of oral hearings and attendance of the parties. UDRP has two main disadvantages though. Firstly, the decisions are not legally binding. Secondly, it is not possible to obtain monetary damages, attorney's fees and costs.

Conclusion

FREE role-guided training plans

Get 12 cybersecurity training plans — one for each of the most common roles requested by employers.

Download Now

The present contribution defined domain name parking, discussed some notable cases of domain name parking of gTLDs, and explained how a trademark holder can take control over a domain name parked with the aim of profiting from the goodwill of a trademark belonging to him.

The article clearly stated that domain name parking is not in itself an illegitimate activity. There are many legitimate websites selling parked domain names. Anyone is entitled to register a domain name and park it in order to use or sell it later. However, domain name parking may become an illegal activity if a person registers a domain name with the intent to profit from the goodwill of a trademark belonging to someone else and/or offer to sell the domain to another person or company who owns a trademark contained within the name at an inflated price. This act is called cybersquatting and is prohibited by laws in many countries.

On the basis of these national laws, trademark holders may commence litigation proceedings against cybersquatters. Litigation allows the trademark holder to receive monetary and statutory damages, attorney's fees and costs, and/or an injunction, and obtain control over the domain name.

A trademark holder willing to recover a domain name parked with the aim of profiting from the goodwill of a trademark belonging to him may also use UDRP. This procedure is not only cheaper and quicker than litigation, it also allows the trademark holder to challenge domains registered in any registrar around the world. As a result of these attractive features of UDRP, more and more people rely on UDRP for resolving their domain name disputes.

Finally, it is worth mentioning that the introduction of new gTLDs by the ICANN will probably lead to an increase in the number of cybersquatting cases. The reason is that a cybersquatter may use the new gTLDs for registering domain names that are identical or similar to an existent trademark.

References

1. Baranowski, J., 'Domain Names for Profit', Bad Cat Publishing, 2012.
2. Flores, A., 'To Each Country, Its Own Law and Domain: The Legal Structures of CcTLD's in Comparative Perspective', ProQuest, 2008.
3. Halpern, S., Nard, C., Port, K., 'Fundamentals of United States Intellectual Property Law: Copyright, Patent, and Trademark, 3rd Edition', Kluwer Law International, 2011.
4. Jennings, M, 'Business: Its Legal, Ethical, and Global Environment', Cengage Learning, 2010.
5. Lipton, J., 'Internet Domain Names, Trademarks and Free Speech', Edward Elgar Publishing, 2010.
6. Mambi, A., 'ICT Law Book: Cyber Law in Tanzania & East African Community', African Books Collective, 2010.
7. Manz, W., 'Anticybersquatting Consumer Protection Act: a legislative history of Public Law no. 106-113 : appendix I, 113 Stat. 1501A-545', 2002.
8. Miller, R., and Jentz, G., 'Business Law Today: The Essentials', Cengage Learning, 2010.
9. Richardson, T., and Williams, M., 'Child Abuse and Violence', Nova Publishers, 2008.
10. Scott, M., 'Internet & Technology Law Desk Reference, 9E', Aspen Publishers Online, 2009.
11. Smith, G., 'Internet Law and Regulation 4th Edition', Sweet & Maxwell, 2007.