Buying negative domain names can protect corporate identity
Kansas City Business Journal - by Stacy Cohen Contributing Writer
American Century Investments of Kansas City considered itself on top of the World Wide Web five years ago when it registered its domain name three ways: .com, .net and .org. Last year, it registered americancenturysucks.com, .org and .net.
"Buying site names that are similar to our name or make our company look bad protect our name and our company image," said Beth Randolph Taylor, spokeswoman for American Century. "It's a smart business strategy to keep your pulse on that type of stuff."
For companies in Kansas City and throughout the country, keeping a watchful eye on Web trademark infringements and negative domains is serious business. The waters will become murkier this fall when .biz and .info become available, potentially creating new headaches for businesses trying to keep a step ahead of cybersquatters and disgruntled customers.
The legal department at American Century searches the Web for cyberproblems, but Taylor wouldn't say how many domain names the company owns. However, she said it continues to monitor and explore new combinations of names that could be potential problems for the future, including whether to register names under .biz.
Companies have the same trademark rights in cyberspace as they do on terra firma, said Jill Singer, senior associate with Hovey Williams Timmons & Collins, an intellectual property law firm in Kansas City.
"This is a current area of the law in a state of development," Singer said.
The confusion stems from whether some domain names infringe on trademarks or are protected free speech. Under trademark law, individuals cannot use a company's trademark to create confusion with that company's name or products.
"If there's no confusion going, then it might be deemed freedom of speech," Singer said. "It comes down to a judge, and oftentimes he has to make very difficult decisions."
The federal anti-cybersquatting act of 1999 gave companies the right to have their name in their domain. Singer said companies now are protected from cybersquatters -- people who buy domain names and try to sell them for a profit.
Registering domain names used to cost at least $100 a year, but now some registration companies offer the service for as little as $9 a year, opening the field to more small businesses and individuals, said Herman Maes, director of sales and Marketing for AZC, a domain registration company in Mountain View, Calif. He said the company warns customers about infringing on trademarks.
"Domain names can be very valuable for companies," Maes said. "It's the main identity for some companies, and they need to protect them."
Although Westwood-based Sprint Corp. owns ihatesprint.com, .net, and .org., the company was too late to claim sprintsucks.com. Cybermultimedia Inc. in New York registered it in 1999. The company has been in the news during the past few years for high-profile lawsuits stemming from the rights to domain names.
Partners Eric Steurken, Rich Preisig and Thomas Kaplan pooled nearly $40,000 to buy Internet domain names and then sold them for as much as $10 million. Cybermultimedia's Web site no longer is active, and the company's phones are disconnected.
David Metson, a lawyer with Sprint, said he has no knowledge of Cybermultimedia trying to sell sprintsucks.com to Sprint. However, he said the company wouldn't pay an inflated price for the domain name.
Metson said the company follows various sites that try to use the Sprint name or logo.
"We try to determine if it warrants contacting the site," Metson said. "They don't really impact us that much, but it's a fact of life with the Internet."
Hallmark Cards Inc. has adopted a two-part strategy to addressing cyberproblems: prevention and cooperation, said Kathi Mishek, spokeswoman for the Kansas City company. The company registers potentially damaging names, such as hallmarksucks.com, .net, and .org. Mishek wouldn't disclose how many names the company has registered.
"We don't take an aggressive legal approach like some companies," Mishek said. "You have to look at the intent of the site. Oftentimes, it's just a parody poking a little fun."
However, Mishek said the company would take legal action if the parody seriously compromised the company's reputation.
Stacy Cohen is a free-lance writer in the Kansas City area.
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