February 1998 Lead Newsletter Article
Cybersquatting
Three legal cases show that the courts are cracking down on the practice
It's called "cybersquatting." Someone registers a raft of domain names hoping to sell them at huge prices to others who may want the URL or who are prepared to pay to get rid of this potentially confusing domain name. In an earlier day and age, it was called "highway robbery." As the review of the following three recent legal cases from three countries will show, this modern form of "information superhighway robbery" is not being tolerated by the courts.
We'll begin with a look at how the Canadian courts have recently handled the issue. Chapters book stores and The Globe & Mail teamed up to form an on-line book store. Their domain name is www.chaptersglobe.com. The day after the partnership was announced, Richard Morochove, a technology writer, registered the URL chapters-globe.com. When Chapters and The Globe demanded that Morochove stop using the name, Morochove offered to do so if he was paid a percentage of the sales from the Chapters/Globe Website. Chapters/Globe went to court and received a preliminary injunction that prevents Morochove from using his URL until a full trial takes place.
Next, we'll look at how the United States is handling the matter by examining the legal decision of the courts in Panavision versus Toeppen. In this case, Toeppen registered many well-known trademarks as domain names, including panavision.com. When the movie equipment company demanded that Toeppen relinquish the name, Toeppen said he would do so for $13,000. Panavision went to court and was successful, the Court of Appeals calling Toeppen's scheme as being equivalent to "extortion."
Lastly, to England, and a case that is very similar to the Toeppen case in the United States. The famous names that were registered as domain names by a cybersquatter included very "blue-chip" companies--Ladbrokes (the famous bookmaker), Sainsbury (the famous grocery store chain), Marks and Spencer (the famous department store chain), and British Telecom. The Court of Appeal decided in favour of the famous trademark owners. The following statement made by the lower court is worth quoting in full:
"Any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organization must expect to find himself on the receiving end of an injunction to restrain the threat of passing off, and the injunction will be in terms that will make the name commercially useless to the dealer."
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