A Canadian Company doing business as Domain Name registrars
has been forced to pay back $375,000 collected by falsely inducing public to
register domain names in different TLD extensions.
The modus operandi was as follows.
The Company would send a fax to the registrant of a domain
name such as xyz.com captioned
"URGENT NOTICE OF IDENTICAL DOMAIN NAME APPLICATION BY
A THIRD PARTY." and warning that "An application for a domain name almost
identical to your's has been submitted to the National Domain Name Registry
(NDNR) for registration by an unidentified third party. Consequently, it is our
opinion that this application may have been submitted in bad faith ...
" The solicitation listed four reasons someone might want a
copy-cat domain name, including "disrupting the business of a competitor," or
intentionally attempting to lure the customers of another business by creating a
confusingly similar Web address.
The fax solicitation offered to block the application by
obtaining the copy-cat domain name for the fax recipient for a fee of $70.
It warned that, if the consumer fails to act, "NDNR WILL NOT
BE LIABLE FOR THE LOSS OF DOMAIN NAME LICENSE, IDENTICAL OR CONFUSINGLY SIMILAR
USE OF YOUR COMPANY'S NAME; OR INTERRUPTION OF BUSINESS ACTIVITY OR BUSINESS
LOSSES."
No doubt several registrants felt the necessity to block the
.net extensions also.
It has now been proved that the alarm was false and devised
to defraud the public. In a settlement reached with the Federal trade Commission
the company has agreed to pay the compensation to the registrants and also
adhere to some strict marketing norms in future.
While the fraud has been adequately dealt with for the time
being, it is necessary to observe that the main reason why such a fraud could be
committed was because of the perception that web surfers could be mislead with
the similar names. One remedy suggested for this problem by the IPR enthusiasts
is that UDRP can be made stricter so that once a Trade mark right is available
to one person, he may be given undisputed rights over all domain names that are
similar to it.
naavi.org feels that this solution even if supported by WIPO
and ICANN is not the ideal solution. What is required is to devise a scheme for
"Co-Existence" and not "Trade Mark Monopoly" over domain names.
naavi.org strongly recommends that the service enumerated in
www.verfy4lookalikes.com should be used in all cases where potential for
confusion exists. This is a free service proposed by Naavi under a pending
Patent application. Visitors are requested to peruse the site and send their
feedback.
Naavi
April 27, 2002
Related Articles:
http://www.ftc.gov/opa/2002/04/morgenstern.htm
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