Verizon Wireless Wins Cybersquatting Judgement

By: Jennifer Hong
Staff Writer
Published: Mar 23, 2009

Verizon Wireless won a $33 million judgement against a technology firm that was registering Internet domain names after company trademarks. It is the largest cybersquatting case ever awarded.

Verizon Wireless, a unit of Verizon Communications Inc, has been awarded $33.15 million over an Internet domain cybersquatting suit. OnlineNIC, a San Francisco technology company, had registered over 663 Internet domains that were named after Verizon's trademarks.

"This case should send a clear message and serve to deter cybersquatters who continue to run businesses for the primary purpose of misleading consumers," Verizon vice president Sarah Deutsch said in a statement.

OnlineNIC failed to appear in court which resulted in a default ruling in Verizon's favor. The court also concluded that OnlineNIC acted had acted in bad faith. The telecommunications firm received $50,000 for each domain name, totaling $33.15 million.

"Verizon intends to continue to take all steps necessary to protect our brand and consumers from Internet frauds and abuses," Deutsch said.

OnlineNIC registered the trademark names expecting to cash in on Verizon Wireless.

Cybersquatting is when a person or company registers a domain name with intent to profit from a trademark belonging to someone else. The recent case marks the largest Internet cybersquatting case ever awarded.

When registering domain names, it's always a good idea to make sure; there's not a trademark already similar to it. In most cases, it doesn't represent cybersquatting if the intent and descriptions are totally different than what the trademark represents.

What is cybersquatting? Web sites which are named after trademarks are usually owned by people hoping to earn a profit. The profit comes by selling the trademark name back to the company. In this case, there were several domain names registered after Verizon trademarks, which were intended to be sold to the cell phone carrier for profit.

For example, if you register a similar name of a trademark but the intent is totally different than what the trademark represents, it is not cybersquatting. Especially, if its just one similar name and the Web site content has nothing to do with trademark description. Companies that already have a trademark for the name usually contact the domain owner to work out a payment that's agreed by both parties.

However, those are rare cases and not something that happens all the time. It is also not something to suggest doing as new cybersquatting laws are getting comprehensive.

OnlineNIC got in trouble because they registered similar names to become deceptive. This was misleading consumers while they were demanding $50,000 for each domain name.