February 2008                 DNJournal.com               The Domain Industry News Magazine

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D-Day For Domain Owners?: New Bill Underlines Urgency to Put Up a Fight or Start Kissing Your Assets Goodbye

Only one topic this month as this one is too important to share the stage with anything else. 

Earlier this week three U.S. Senators, sponsor Olympia Snowe (R-Maine) and co-sponsors Bill Nelson (D-Florida) and Ted Stevens (R-Alaska) introduced a new bill in Congress called The Anti-Phishing Consumer Protection Act of 2008. Now, who wouldn't be in favor of a bill aimed at stamping out the phishing scourge that makes the Internet a truly dangerous neighborhood to hang out in if you don't know what you are doing? 

Here's the problem. As we have been telling you for well over a year now, there are well-financed people out there who are trying to change laws so they can more easily take away your domain assets without paying for them. The easiest way to do that is to get language favoring their agenda slipped into an otherwise well-intentioned bill like this one that would normally sail through the legislative process with little scrutiny. 

The dangerous language gets inserted in such a bill (often without the bill's sponsors understanding the ramifications of that language) through lobbying efforts by those who want to remove the barriers that keep them from taking domains they are not entitled to. Unfortunately, this new bill is a prime example of that kind of legislative sleight of hand. 

Sen. Olympia Snowe

Sponsor of a new bill 
that could have disastrous consequences for domain owners.


Fighting this kind of subterfuge aimed at domain owners is one of the key reasons that the Internet Commerce Association (InternetCommerce.org) was formed and why we have repeatedly urged domain owners to wake up and act in their own best interests by supporting the non-profit trade group (I serve on the organization's board as an independent director). Regrettably, only a tiny fraction of industry companies and concerned individuals have stepped up thus far but those who have taken up positions on the front line have already made a difference, because if they had not done so it's likely this bill would have gone through unnoticed

Instead, the ICA's Washington D.C. based Legal Counsel and lobbyist Phil Corwin spotted the trojan horse hidden within this bill and sounded the alarm. The ICA response to the proposed bill was posted at InternetCommerce.org today. The opening paragraphs from that statement are especially important for understanding what is at stake with the Snowe bill (S.2661):

"Internet Commerce Association strongly supports efforts to thwart trademark infringement, criminal phishing schemes, and the furnishing of inaccurate WHOIS database information. S. 2661, however, contains provisions that are largely unrelated to these objectives and that radically and unnecessarily expand the rights of trademark owners to essentially provide them with monopoly rights on registered trademarks

ICA Legal Counsel Phil Corwin

to the detriment of millions of individuals and businesses engaged in lawful and legitimate Internet commerce. 

Moreover, the proposal goes far beyond protecting trademarks to covering brand names and business names that might otherwise not be entitled to trademark protection. Such an expansion flies in the face of established trademark law, poses significant risks to Internet commerce, and would be burdensome on our justice system. ICA believes that the legislation can be perfected to eliminate these risks without hindering its ability to achieve the goal of preventing phishing and other fraudulent schemes that plague Internet commerce.

ICA is firmly opposed to the criminal activity of financial data phishing and will carefully review the portions of this legislation relevant to eradicating that activity with a view toward supporting those provisions that fill essential gaps in existing law.

However, ICA is also firmly opposed to the establishment of a parallel domain name infringement enforcement scheme that is more expansive and more onerous than the existing, highly effective remedies available to trademark owners through ICANN’s UDRP process and U.S. trademark law. Trademark owners already prevail in 85% of all UDRP complaints and nearly 100% of all ACPA cases. Yet some apparently now wish to establish a new regime for contesting allegedly “infringing” domains that is tilted even more in their favor by denying basic due process and substantive protections to domain name registrants – and that provides the possibility that they can use their power and influence to sway public officials to expend taxpayer dollars in defense of private intellectual property rights.

The overbroad and unnecessary trademark-like provisions of this bill are a recipe for massive reverse domain name hijacking by large corporations and are therefore a direct threat to the more than $10 billion in asset value created by the entrepreneurial ranks of professional domain name investors and developers, and to the beneficial goods, services, and information provided to consumers through their websites. 

ICA will work with the bill’s sponsors and other members of the Senate Commerce Committee with an eye toward eliminating or narrowing these unnecessary and duplicative provisions and assuring that any final legislation is focused solely on the criminal financial fraud of true phishing schemes".

In another key passage, the ICA response notes "This legislation was endorsed at

introduction by the Coalition Against Domain Name Abuse (CADNA), an organization of major brand owners that has consistently exaggerated the extent and negative effects of “cybersquatting” and has advocated a hyper-expansive view of the rights of trademark owners vis-à-vis domain name registrants. 

If enacted this bill would allow trademark and brand owners to encourage state and federal officials to bring what are in essence trademark infringement suits on their behalf without any need to allege, much less prove, that the targeted domain names were in any way involved with criminal phishing activities. It would also allow trademark owners to abandon use of the UDRP process and the ACPA since alleged “cybersquatting” could be targeted with lawsuits brought under this proposed law, with a lower burden of proof and the coercive power of far more substantial monetary penalties."

The introduction of this bill underscores how critical it is for domain owners to be represented in Washington. If you don't have a presence to look out for your interests there you are essentially invisible. Do the smart people who recognized the domain opportunity when everyone else missed it really want to remain invisible? Do you want to let latecomers walk in now and take away your assets? 

The fact is the small handful of people and companies who formed the Internet Commerce Association are not going to keep paying the freight for everyone else who is content to sit on their hands and hope the problem goes away. It is time to join the fight and protect what you have earned through your foresight and sizeable investment in this space, or accept the consequences and say "oh well, it was fun while it lasted". 

There is much more in the full ICA response, including a detailed summary of the legislation, so I urge to read it in its entirety. You can also find the full text of the bill in  this .pdf document. The challenge for everyone in the domain business now is to contact the bill's sponsors and their own congressional representatives (as the ICA and its members will do) to get the language in this bill rectified so that the legislation can target the phishing epidemic without killing innocent bystanders like generic domain owners.

Being invisible might be cool in the 
movies, but in Washington, D.C.
 - not so good.

I love to write about domains but I don't have much interest in writing obituaries. I hope the last story I write about this industry doesn't become one. 

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Ron Jackson

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