December 24, 2008, 12:00 AM

Verizon claims record $33 million win in suit over domain cybersquatting

Verizon says domain name registrar OnlineNIC registered 663 domains that were identical or confusingly similar to Verizon trademarks. Cybersquatters often register web addresses close to those of retailers and other companies, hoping to lure traffic.

Telecom company Verizon Communications Inc. announced today what it says is the largest court judgment against cybersquatters, a $33.15 award from a federal court against domain registrar OnlineNIC.

Verizon claimed OnlineNIC had registered 663 domain names that were either identical or confusingly similar to Verizon trademarks. For instance, some of the domains registered spelled Verizon with an “s” instead of a “z” or with transposed letters, a Verizon spokesman says. The court awarded Verizon $50,000 for each domain registered by OnlineNIC.

"This case should send a clear message and serve to deter cybersquatters who continue to run businesses for the primary purpose of misleading consumers," says Sarah Deutsch, Verizon vice president and associate general counsel. "Verizon intends to continue to take all steps necessary to protect our brand and consumers from Internet frauds and abuses."

Cybersquatters often register web addresses close to those of leading retailers and other companies, hoping to lure unwitting consumers and make money by serving them pay-per-click ads. For instance, a consumer who, instead of typing the web address llbean.com, enters llbeen.com is taken to a site that offers links to travel, credit and clothing sites unrelated to apparel retailer L.L. Bean.

There were 428,617 instances of cybersquatting in the second quarter of 2008 alone, a 38% increase from a year earlier, according to MarkMonitor, a company specialized in helping companies protect their brands on the Internet. MarkMonitor defines cybersquatting as registration of domain names containing a brand, slogan or trademark to which the registrant has no right.

The legal victory in the Northern District of California is the latest win for Verizon against cybersquatters, according to the mobile phone carrier and broadband Internet access provider. In three previous cases, courts granted injunctions against violators.

According to Verizon, OnlineNIC did not appear in court nor send lawyers to defend itself against the charges. OnlineNIC did not immediately respond to a request for comment.

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