The mysteries of the typosquatters
OUT-LAW Radio, 09/08/2007
We investigate one of the web's dirty secrets: typosquatting,
and ask just how bad it is for established business.
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome back to OUT-LAW Radio; the weekly broadcast
that keeps you up to date on all the twists and turns in the world
of technology law.
Every week we bring you the latest news and in-depth features
that help you to make sense of the ever changing laws that govern
technology today.
My name is Matthew Magee, and this week we investigate the world
of typosquatting where your fat fingered browser errors and
secretive trade mark busting earns millions of dollars a year.
But first, the news:
- JK Rowling judge should have made allowances for her fame says
expert; and
- ad ban for overseas web casinos
The judge in the JK Rowling privacy case should have taken
account of the fact that celebrities ought to be entitled to
stronger privacy protection than other people a leading legal
expert has said. Rowling lost a case in the high court over a
picture of her then 20 month old son David which appeared in the
Sunday Express. Privacy law expert Rosemary Jay says that the judge
did not take into account that celebrities may be more vulnerable
to invasions of privacy than other people. Rowling who took the
case under her married name of Murray was walking with her husband
and son who was in a buggy when the picture was taken from a
distance with a long lens. They may be rich, they may be famous but
nevertheless these people are vulnerable said Jay and I think there
is a question of principle there that says is the law prepared to
give them additional protection because of that vulnerability.
Justice Patten struck out Rowling’s claim. He said that the case
was so similar to a previous one that it had no realistic prospect
of success. He said in his ruling that to grant Rowling’s child
protection under privacy or breach of confidence laws would define
privacy too widely.
Online gambling companies based outside of the European economic
area are to be banned from advertising in the UK. The
Gambling Act will be used to bar the advertising of over 1,000
websites. The Secretary of State at the Department of Culture,
Media and Sport, James Purnell has laid the proposal before
Parliament today in a bid to crack down on rogue gambling
operators.
That was this week's OUT-LAW news
There are certain immutable laws of human nature. People will
always strive for progress. Conflict is inevitable. Christmas is
always an anti-climax and people make mistakes. A smart business is
one that learns to make money out of one of these. Engineering
companies and arms manufacturers pretty much have progress and
conflict sewn up but the new breed of aggressive mysterious
entrepreneur is now making millions from our mistakes.
Typosquatters are raking in staggering sums from the fact that
we type the wrong web address into our browser every now and then.
Typosquatting is the business of buying a domain and putting
adverts on it which earn you money. The domains you buy are ones
that are close to but not quite famous names. So you might buy
gooogle.com with three letter O’s or microsift.com.
Typosquatters earn millions from a seemingly innocent harvest of
our fat finger idiocy but brand owners do not see it as that
innocent. They say that the activity violates their trade mark
rights and makes a mockery of the investment they put behind their
brand.
OUT-LAW magazine reveals today that every single one of the
Fortune 500 world’s biggest companies suffers from typo squatting.
Big pharmaceutical companies are amongst the hardest hit. As well
as being on the typo squatting committee of the Intellectual
Property Owners Association, Christopher Bolinger Bolinger is a
Corporate Counsel for trade marks at Pfizer owner of one of the
world’s biggest brand, Viagra.
Bolinger: I think any confusingly similar
variant of your brand in a domain name you know is infringement
that dilutes your brand and really ultimately left unchecked
undermines revenue and undermines your brand equity and weakens
your brand. I think even though it is not the direct use of your
brand in the domain name if you are typosquatting. You know that
types of confusingly similar uses can also lead to dilution of your
brand.
In many cases the activity is trade mark infringement says Lee
Curtis a trade mark specialist at Pinsent Masons the law firm
behind OUT-LAW.
Curtis: If someone is trading under a name
which is similar to the name you have got rights in providing they
are trading in a sort of a similar area then yes it would be trade
mark infringement and if you had a typosquatter who was
operating a website whether via a domain name which was one or two
letters different to the trade mark owner’s site and was obtaining
advertising revenue that way on the back of that typosquatting
domain then I think you could argue yes they were trading and using
the brand in the course of trade and it would be even stronger if
they were actually stupid enough to operate in the same sort of
sector as the trade mark owner.
Graham MacRobie runs Citizen Hawk which helps companies to
combat typosquatting. He says advertisers as well as brand owners
lose out.
MacRobie: I would say the most obvious party
that is harmed is the owner of the trade mark. When somebody types
the name of a company into their URL bar in an attempt to visit
that company; let us say we are talking about Wal-Mart. So somebody
types wal-mart.com into their browser. Wal-Mart has achieved some
degree of brand recognition. They have acquired a customer. They
have paid a very specific and finite amount of money to acquire
that customer. The person was on their way there and because they
misspelled Wal-Mart now instead of going to Wal-Mart’s page they
will get a page full of ads or something along that line. The
problem with that is that although the person may realise that they
have not wound up where they were hoping to go they may also be
presented with a list of competitors on that page that they did not
necessarily even know existed. Wal-Mart has kind of taken a step
backwards in this example because instead of just having the person
right on their site now they have to contend with new competitors.
You know trade mark law as I understand it is designed to protect
the owners of large trade marks from consumer confusion and I think
that typo squatting leads to exactly that kind of consumer
confusion.
Suppose in my Wal-Mart example you misspell one word, you get a
page full of ads. On that page maybe the first link is back to
Wal-Mart and so the person goes great, that is what I wanted. I
wanted Wal-Mart so they click that link and everybody thinks
everything is fine except that behind the scenes Wal-Mart just had
to pay twice for the traffic. They had to pay once to get you to
type that name in the beginning so whatever marketing money they
spent to get that name recognition and they had to pay again for
that ad that you just clicked on. So even if the traffic winds up
on their site eventually it is still not necessarily you know good
for them.
So how is so much money made when each ad that a surfer sees
earns just a few cents? Well what makes the business work is
its scale. We now use the internet in such vast numbers and for so
much of the day that the sites receive enough traffic to cover
their costs. The other factor is that the costs have never been
lower. It costs just $6 a year to keep a domain. Some domains are
even free for a while. ICANN allows people to hand back a domain at
no charge after 5 days to help people who register a domain by
mistake. This though allows typosquatters to try a domain, work out
if it will earn more than its $6 a year cost and discard it if it
does not. Called domain tasting, this practice is conducted on a
huge scale while typo squatters test the market. At any given time
6 million domains are tied up in tasting.
The biggest problem facing the typosquatters is that the
activity involves thousands of tiny trade mark infringements, each
one costing potentially hundreds or even thousands of dollars to
fix. John MacKenzie an Intellectual Property Litigation Specialist
at Pinsent Masons explains.
MacKenzie: It used to be that trade mark
infringement was relatively rare. Rarely would another company
deliberately set out to copy another brand but when it happened the
cases were usually lengthy and complex. Now there are thousands of
incidents each using a very deliberate and carefully calculated
approach. If you were to analyse each case on a traditional basis
you would find that you would carefully identify the infringer. You
spend time investigating them and your legal costs were
substantial. When the cases came along only occasionally that was
acceptable in a sense but when you have got tens if not hundreds or
thousands of cases it makes no sense to deal with all of them.
It is a problem that Pfizer’s Bolinger is all too familiar
with.
Bolinger: Again you cannot go after everything
because you know unfortunately your trade mark rights and domain
names can quickly become an extremely costly matter because you
know typosquatters can always think if new variants.
So what can companies do about it? MacKenzie says that action
has to be taken in a systematic way to make it economic for big
brand holders.
MacKenzie: The company needs to understand the
importance of this type of infringement to its brand and once they
have decided as a matter of strategy whether or not their brand is
important to them they then budget for the enforcement action that
is needed. Just as the domainers are organised and systematic in
their approach to infringement so the brand owners need to be
organised and systematic in their approach to enforcement.
MacRobie sells a technological solution. He says the mass scale
automation of the typosquatting must be met with an equally
sophisticated approach from brand holders.
Behind the labyrinth of names and companies lie a small number
of prolific typosquatters and MacKenzie and MacRobie both advocate
chasing those small numbers of highly active people.
MacRobie: Where a system does analysis on each
one of these pages and what we frequently discover is that even
though the registrant appears to be all different people that the
money is all being paid to a single individual and so when we can
trace the money all back to one source like that then we can start
to aggregate domains together into larger groups and what that
means is that instead of filing for one and two at a time we can
file for 20 or 30 at a time.
The problem is a difficult one and brand owners do not yet have
a complete solution. While typosquatters snap up yachts and sports
cars with the fruits of all our browsing errors brand owners will
have to fight to put a stop to the web’s newest robber barons.
That's all we have time for this week, thanks for listening.
Why not get in touch with OUT-LAW Radio? Do you know of a
technology law story? We'd love to hear from you on radio@out-law.com.
Make sure you tune in next week; for now, goodbye.
OUT-LAW radio was produced and presented by Matthew
Magee for international law firm Pinsent Masons.
