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Verizon Sues DirectNIC for Parking Expired Domain Names

Suit claims registrar parked trademarked domain names for the period between expiration and deletion.

Verizon has a filed a lawsuit (pdf) against domain name registrar DirectNIC and related companies, alleging that the defendants parked expired domain names infringing on Verizon’s trademarks in the period between expiration and deletion.

The lawsuit also names directors of DirectNIC and related companies as defendants, and uses a gripe site and UDRP decisions as part of the basis for linking together the company with a number of other entities, which the suit calls “shell companies”.

Verizon claims that the defendants have registered 288 domain names that infringe on its marks. But the crux of its argument is that DirectNIC became, in effect, the registrant of these domain names for the period between when the domain names expired and were deleted. The Verizon lawsuit also claims that the defendants then transferred some of these expired domains to other entities for a fee prior to deletion.

Most major registrars replace the whois information for expired domain names with their own information or domain privacy, and often times display some sort of message about the domain being expired. During this period, the registrar places a parked page on the domain name. The domains are later auctioned off or transferred to other entities.

For example, Network Solutions places a notice and parked page on expired domain names. It then sends the domain name to an auction on NameJet. If there’s a buyer, the domain is then transferred to the new owner. Some domain registrars also have deals with buyers to sell domains to them outside of the auction process.

It’s not clear why Verizon sued DirectNIC and related other companies rather than a competitor. Verizon makes a lot of allegations in the lawsuit linking the defendants together, even though the point of the lawsuit doesn’t seem to address these linked entities and instead goes after the practice of parking expired domain names.

Depending on the outcome, this suit could have ramifications for most major domain name registrars and their expired domain parking practices, let alone “coming soon” placeholder pages.

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  1. Greg says

    Is Verizon just a law firm or do they do something else other than sue people?

    Oh, wait, I forgot, they are one of the biggest cybersquatters in the world through their ISP business.

    I will never be a Verizon customer. They make the worst trademark domainers look like saints.

    Keep pulling on this thread, Verizon. I can’t wait until you create a legal precedent that costs you dearly. Scumbags.

  2. Tim says

    This is going to have insane ramifications in the parking realm.

    I think CADNA and Verizion is on the attack. If they can’t get the domainers who are operating legally or otherwise, then they seemingly have decided it is better to go after one of the revenue sources…..DirectNic.

    It’s all so ironic, seeing how Verizon is probably the largest cybersquatter on the planet.

    The TM infringements are not what they are after…..CADNA/Verizon want to put DirectNic out of business. That is the ultimate goal…IMO.

  3. Sunday quarterbacking says

    Lets not forget about Comcast as a trademark infringer/cybersquatter.

    For the people that don’t know. When you incorrectly type a domain (ie., ford.com, corvette.com) into the url bar, the isp supplier will display a ppc type page in which they profit from the typo.
    It will also happen if the website is slow to open, might require a cookie, might require www typed into the url, server resetting, bandwidth or website very busy, and many other reasons.

    I use comcast and verizon. I’m surprised how often the redirect happens.

    Do they realize they are cybersquatters?
    YES. But, they believe they are offering a service. ???

  4. Sunday quarterbacking says

    Haven’t you questioned why the registrars don’t remove the former whois from expired domains but put up their own ppc landing page?

    Even though the former domain owner doesn’t control the domain, the TM owners could only go after the former owner and not the registrar. Plus, the registrar profits when he auctions it off.
    I’m happy to see the registrars being accountable for their actions.

    Enom and Godaddy are the biggest cybersquatters of the group.

    Why do you think the registrars keep the profit margin low on renewals?

    Years ago when the domain expired, the dns was turned off. The site went down.
    Today, if they did that the isp page will be displayed.

  5. Danny Pryor says

    Well, I can see we have a long, long way to go with settling some domain legal problems.

    Verizon’s resources, and their other, recent lawsuits seem to demonstrate a clear pattern of corporate bullying, using the Internet and domain names as their whip.

    Without knowing any more than what is here and on other domainers’ sites, I can say I have a really bad taste for this company.

  6. Kevin says

    Is it not possible that Verizon believes that the defendants are the “registrants” as well as the “registrars” of the infringing domains?

    The complaint seems to have a lot of similarities to the 2007 Dell vs DirectNIC case, which tried to connect DirectNIC to Kenyatech (which *was* a typosquatter).

    There was quite a bit of hypocrisy alleged, successfully it seems, in that case too.

  7. Sunday quarterbacking says

    “Kenyatech (which *was* a typosquatter).”

    Wow !!! Down memory road.
    I hadn’t heard that company name in years.
    I had forgotten about them.

  8. Shorty says

    @Abadrienne……I think that is the million dollar question.

    I’m surprised how little everyone is talking about this.

  9. joe says

    What in the world, Verizon pay your bill, how can you let a domain go expired and expect to sue someone. If anything directnic should be counting sue verizon for defermanation of character. All domain registrars have terms and conditions. Verizon really weak for going after directnic for copyright, if anything they should be keeping up with their bills. Also how long has Verizon known about this? Also yeah right to the person who said you could sue, they would eat you alive. Also this means nothing for directnic. They know the rules and so does verizon, they are just mad because directnic understands the rules and keeps in order with the terms and conditions. And if you know anything about the domain industry you know that people are constantly creating domain names and can do so and will keep on doing so. Verizon needs to focus their money on building their company to surpass t-mobile instead of a company monopolizing on their names. They should find a better company to sue, because Directnic stands a chance against any company. They have been around way before Verizon even knew what domains were. Also Directnic needs to find people who have no money and register their names as the transferred owners, so that big companies have no idea who to sue. When they do they realize that person has no money to get. This another waste of time and money for both companies. Like the mentioned above post, sue the owners not the registrars. Actually fire the person at Verizon who wants to waste the money on lawsuits, They are looking for more money that is why they are sueing. Maybe come of this post didnt make sense, but I hate hearing about big companies constantly going after registrars. Why don’t they be up front and ask them. How much to get the domain name point blank, if it is a crazy amount, use those sales skills that is why you are the ceo or coo or cfo? Come on big time knowledge hippos. Use that brain not the court system. Which is another waste on our civil resources. About 99% of every issue can be legimately handled outside the court system and this also includes criminal court. You can talk to both parties tell them they need to resolve or start paying the court fees until they both come to an agreement. maybe a 6 month term to come to an arrangment for some sort. For crying out loud, Verizon and Directnic and those owners, just put those domains through a recycled computer and back on the market andpay directnic the fees you have forced them to pay just to prove they did not do you wrong!

  10. Oh That's Going to Leave A Mark says

    Dub-A (and Joe)

    With the excellent “typosquatting” Verizon link provided by ” Joe”, are you going to follow up with an interpretive and potentially groundbreaking “Gotcha!” on these corporations who have 100 attorneys sitting around looking for something to do to charge their clients?

    This link is so “Jon Stewart – The Daily Show” joke material, where Jon rips idiotically self-righteous companies who hypocritically sue domainers without first looking at whether they have toilet paper hanging out of their pants after a Number Two.

    Looks like Verizon has a long toilet paper trail that will be hard for them to “clean up”. They will have a very hard time talking their way out of this one. I am anxiously waiting for a followup to your story here.

    thanks Dub and good work! Now, take some stomach upset pills, and lower the boom on Verizon and Comcast and any other company attacking domainers for doing what these companies are doing and making millions monthly from these very same techniques they’re trying to sue domainers for using.

  11. VoiceOfReason says

    With the excellent “typosquatting” Verizon link provided by ” Joe”, are you going to follow up with an interpretive and potentially groundbreaking “Gotcha!” on these corporations who have 100 attorneys sitting around looking for something to do to charge their clients?

    ————————————–

    Gotcha?

    A Yahoo Search feed showing ads on behalf of Verizon with Verizon exercising zero control over the process, is hardly the same as someone taking possession of a trademarked domain and monetizing it.

    How’s this for a “gotcha”? Lets assume this pathetic argument is used. Directnic.com tries to make the argument that Verizon is doing this same. But of course, it’s not the same at all. It’s a childish response which essentially says “oh yeah, well look what they do over here”.

    Verizon, one of the largest companies in the world is obviously going to counter. What argument do you think they will counter with? Well, lets assume they are presented with piles of “evidence” (screenshots) showing that they are benefiting from such alleged typo’s. First of all, these typos haven’t been proven to have existed or to have occurred. So it can’t be proven that Verizon knowingly or intentionally benefited from this behavior at the direct cost of Directnic.com.

    Assume the court is presented with a pallet load of screenshots like that above with the intent to make this VERY weak argument which has no bearing whatsoever on Verizon’s claims. The judge might rightfully ask whether or not the parents of Directnic.com’s counsel are present in the courtroom, reasonably assuming Directnic.com’s attorneys are probably underage. Verizon then might respond to that argument. They might present screenshots of every parked domain YOU own or that Directnic.com or Parked.com controls, showing 10’s of millions of similar examples. They might even sue you personally since you have made it quite clear that you perfectly understand that benefiting from Verizon typos on your parked page in such a manner is wrong, actionable or illegal.

    Then what happens? Well, then both Verizon and Directnic.com and Parked.com all have to rely on the same argument. That argument being that Yahoo! is the one serving the ads and that no other party exercises direct control over the ads. Now Yahoo!, much to their surprise and displeasure finds themselves in the middle of a lawsuit between two people it can live without. Yahoo! can live without Verizon. Verizon can live without Yahoo!. Can parked.com? Can Directnic.com? Do you think Yahoo! isn’t going to have an itchy trigger finger while they are in the middle of a merger with MSN? I’m sure they will be happy to discharge any liabilities as quickly as possible. In fact, they may be required to by MSN. No one knows how they might respond.

    The point is that you can’t expect to push, without getting pushed back. Thats how confrontation works. You don’t wage war by mindlessly reacting to your opponent.

  12. VoiceOfReason says

    @Andrew

    If I understand this correctly, you are suggesting that this argument has been used successfully against Verizon previously? You are also suggesting that Verizon is well aware of it and all of its intimate details?

    One could then further assume that your reasoning must be that Verizon has either forgotten about it completely or that they haven’t given any consideration into how to counter it, or are not certain of their legal position on the issue? Those do not seem like very reasonable assumptions on which to place a 28,000,000.00 bet.

  13. VoiceofReason says

    @Andrew – I think that’s debatable. In this example, “hypocrisy” would require Verizon to be registering trademarked domains or otherwise taking possession of them in bad faith and attempting to profit that traffic of users looking for the products and services of the trademark holder.

    I think it can be safely argued that Verizon is protecting its marks. When someone types in a URL in their browser incorrectly and ends up on a page that first, presents a link to the correct URL (a reasonable guess presented for the benefit and convenience of the user) and then displays ads and a search form, that cannot be argued to be an act of infringement. That would be the exact same as saying “Bob and Helen started to drive to Mcdonalds, they really wanted a Big Mac. They took a wrong turn and ended up at a destination that first showed them how to get to McDonalds and then offered them other restaurant choices for their convenience”. There is no intent to deceive Bob or Helen. There is no intent to deveive Bob or Helen causing them to believe they are at McDonalds when they aren’t. There is no intent to use, or actual use of the McDonalds trademark to deceive Bob or Helen. There is no intent to use or actually use the McDonalds trademark to deceive Bob or Helen and benefit unfairly. No offerings were wrongly presented as, or made confusingly similar to those of McDonalds with intent to cause such confusion and so on and so on.

    I was drawn to this argument and the constant ranting about typosquatting. I am not the expert of course. You are the expert. You report domain news. But I started to wonder… can there be an act of typosquatting without a domain first being registered or otherwise to be in possession of the offender? My understanding is that typosquatting and cybersquatting deal with domains registered in bad faith. If there cannot be typosquatting… then could your remarks be considered to be defamatory, libelous or actionable by Verizon? You are and have been, by your own admission, accusing them of breaking the law.

    Another point you seem to be unaware of. Your argument for “typosquatting” (agreeing to disagree on the definitions and relying on your usage of the term) was previously rejected in court – Verizon California, Inc. v. Navigation Catalyst Systems

    So again, I would assert that this both an extraneous and failed argument with no bearing on the facts of the complaint.

    People may not like it but it could be argued that any domainer that parks domains is benefiting in the exact same way. People end up at a domain through a variety of means (bought traffic, typin, old orphaned links to the site etc) with expectations of finding information, products or services and get shown advertisements, with the domain owner knowing and understanding that showing those ads is more profitable than showing them the actual content.

    • Andrew Allemann says

      @ VoiceofReason – this screenshot looks a lot like a parked page full of ads to me. Adding a link to a possible web site and organic listings doesn’t excuse what’s happening.

      Whether or not they actually registered the domain or not is merely a legal technicality. It’s what they’re doing.

      Given that just about every generic domain name that receives traffic is registered, that means that most of what Verizon monetizes is a trademark typo.

  14. VoiceofReason says

    Whether or not they actually registered the domain or not is merely a legal technicality. It’s what they’re doing.
    ————

    Registering a domain or not is not a legal technicality if thats the basis for typosquatting argument which is covered by the Anticybersquatting Consumer Protection Act.

    You are arguing that grand theft auto might occur without a car in the equation.

    And sure. We agree. It’s what they are doing. However, what you’ve failed to explain is where the law is being broken. Verizon HAS explained where the law is being broken and where they are entitled to damages and why.

    Your argument has also already been thrown out of court previously.

    You don’t like what Verizon is doing. I understand these points which might be viewed as being hypocritical. However, I don’t like broccoli. The world is imperfect. Until I can prove broccoli is breaking the law or until I can find a legitimate cause for action and sue broccoli for damages, I have to live with the fact that this nasty green weed is everywhere and sometimes makes its way into my food or onto my plate.

  15. Voiceofreason says

    You can search “Verizon + Unclean Hands” to find considerable commentary on the case in question. You are talking about relying on the Unclean Hands Doctrine as a legal defense which is what Navigation Catalyst Systems attempted.

    The judges comment:

    “Nothing presented by Navigation Catalyst Systems suggests that Verizon has engaged in any illicit or prohibited behavior.”

  16. Louise says

    People, just get rid of your icky, trademark names. I can’t believe the defense of trademark-squatting in these comments!

    Thanx for the pdf file of the court documents – it’s funny on another plane when you reach page 19 and see the start of the list, which goes on pages!

    Go Verizon!

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