Bell Atlantic has reached back into the 19th Century for a weapon to fight high-tech piracy on the Internet that is threatening our good name.
This new breed of pirates – sometimes called “cybersquatters” – is plundering the equity we’ve built for our brand – and doing the same to other companies – by registering similar Internet domain names and using them for corrupt purposes.
In just the past year, we’ve found more than 1,000 instances of trademark infringements of this type involving variations of our Bell and Bell Atlantic domain names (for example BelAtlantic.com, BellAtlantics.com, Bellgte.com, belltelephone.net).
The cybersquatters include unscrupulous telecom companies attempting to sell products under our name; those who register variations of our name and then attempt to sell them back to us for an exorbitant price; and those who use our name to lure Web users to sites featuring everything from pornography to satanic cults.
“When cybersquatters steal our name and register it as theirs, it just confuses customers who are looking to do business with us,” said Sarah Deutsch, senior intellectual property counsel. “It’s really a consumer fraud issue, and in some cases it’s nothing more than theft or a transparent attempt to extort money from us.”
In an ironic and innovative legal strategy, Bell Atlantic is leading the fight against these modern-day buccaneers using a tactic that merchants in the 1800s used against pirates who plundered their ships.
Called “in rem” – Latin for “against the thing” —the legal maneuver enables us to dispense with suing the individual or company responsible and go after the name itself. Just as 19th-century merchants realized the futility of suing pirates who were unlikely to show up in court, Bell Atlantic realizes that Internet pirates often use false names and addresses and cannot be found.
By suing the ship and winning, the merchants were able to have ownership of the ship transferred to them. Today, by suing the domain names, we’re winning in court and having the pirated names handed over to us.
“We’ve been very successful with this,” said Deutsch. She cited a recent court victory in which we sued nearly 100 domain names and were able to get more than two-thirds of them transferred back to us.
Deutsch said the in rem approach is a welcome solution because there are considerable legal obstacles that prevent companies from successfully suing cybersquatters, including First Amendment (free speech) issues and how the courts interpret the use of a trademarked name.
Unfortunately, with costs as low as $70 to register a domain name and a possible resale value in five figures, the problem keeps growing.
Deutsch noted that there has been an explosion in domain name registrations, growing from several hundred thousand a few years ago to nearly 3 million this year. And now the
problem is a global issue, with people able to register domain names in more than 250 country codes.
“We’ve had one instance where someone was doing business in Great Britain under our name without authorization,” Deutsch said. “And in another instance, the crown prince of a country called Tonga took our name and registered it using Tonga’s country code. The crown prince said he was just reserving it for us and agreed to sell it for $1,000.”
Deutsch said that when Bell Atlantic and GTE announced their merger, cybersquatters immediately registered more than 50 variations of the name and then attempted to sell them to us.
To strengthen our legal standing against cybersquatters, we’re lobbying Congress for legislation through a coalition of famous brand holders known as the Private Sector Working Group (PSWG). Deutsch serves as co-chairperson for the group, which includes Microsoft, Disney, Porsche, and AT&T among its members.
A bill currently before the House would make it illegal for people with no legitimate claim to a trademarked name to register it as a domain name, or to register a name that is similar in a misleading way.
The in rem tactic we’ve used so successfully has been written into the bill, along with provisions for penalties of up to $300,000.
Deutsch said the PSWG has found a sympathetic audience in Congress, not only because of the trademark issues involved. A number of congressional members have been victims of cybersquatters themselves, with people registering Web sites using variations on the member’s name and then holding the name for ransom.
