Daily Domainer

As we’ve reported recently, cybersquatting is attracting increased attention. A report released May 3, 2007 states that it is not just bloggers and business journalists that have taken notice of unsavory practices in domaining.

The telecommunications industry is beginning to grumble about domain tasting, kiting and cybersquatting. This is significant because of the funds and lobbying power available to these companies. Sarah Deutsch, vice president and associate general counsel for Verizon, and Marilyn Cade, former AT&T lobbyist and currently a consultant on Internet and technology issues, say the United States Anti-Cybersquatting Consumer Protection Act (ACPA) is full of loopholes.

The ACPA was enacted in 1999 is also termed the “Truth in Domains Act” and addresses cybersquatting in its simplest form of grabbing a domain name identical or confusing similar to a trademark and trying to sell it to the trademark owner.

Since the Act came into force, ICANN’s Add Grace Period has become the bread and butter of many cybersquatters. The Add Grace Period was created with the best of intentions, to allow registrars to correct domain name entries within a set five day grace period. However, good intentions and good results can often be mutually exclusive.

Domain tasting consists of registering a domain name and returning the name to the registry before the grace period expires, thereby avoiding payment of registration fees. This allows a tasting of the marketability of a domain name. The registrant gets a five day window of actual traffic data for a given domain name. This tasting was further modified by some to constitute domain kiting, a term coined by Bob Parsons. Kiting effectively works the same as tasting with the added twist that the tasted name is automatically re-registered to reset the grace period clock. Throw in a wealth of inaccuracies in WHOIS data and the taster feels an even greater sense of security in this scheme.

While this sounds like a savvy business move to some domainers, others see this as taking advantage of the add grace period to violate the spirit of the United States ACPA and ICANN’s policies. What’s more, this is becoming big business. Sarah Deutsch notes:

These are not people in their basement.

Verizon in recent months brought cases against several tasting companies, including iREIT, a company funded by Perot Investment and Maveron, founded by the chairman of the Starbucks coffee chain, Howard Schultz. This report also indicates WIPO is aware of the new practices.

What is the impact of tasting and kiting on legitimate business, then? John Berryhill, a patent attorney practicing in Philadelphia says :

Measuring loss in advertising is a hard thing to do.

Instead of looking only at the domain name tasters, he recommended a look at what browser software vendors and search engine providers have implemented, a topic discussed here previously.

So, what can be done about this? Deutsch feels a US Congressional hearing is in order to analyze new trends and prepare for an update on the Anti-Cybersquatting Protection Act:

Greater power should be given to the FTC to prosecute deceptive acts. Some of the activities might even be criminal.

At the international level, Deutsch believes the UDRP could act as the framework for a multinational treaty to standardize the enforcement of cybersquatting in its various forms globally.

WIPO Deputy Director General Francis Gurry agrees that a treaty may be a realistic enforcement option but is cautious, “Nobody wants to over-regulate the Internet,” he said. At the same time, he was “not convinced” that there is a benefit to society from tasting practices, and so might be able to be considered for changes.

Should the add grace period be closed entirely? Berryhill says no, adding that…

It would certainly benefit the large search companies, since they would get the revenue from non-existent domain searches directly, instead of having to share the revenue with domain tasters.

So what is the answer? What if a nominal fee is charged for cancellation of a domain name during the Add Grace Period? That may reduce the number of sites being “tasted”, but would that simply reroute that ad revenue to browser and search engine companies?