by Traverse Legal, reviewed by Enrico Schaefer - November 18, 2011 - d. Domain Name Cybersquatting Law, Lawsuits & Cases
Domain name disputes typically occur between trademark owners and domain name registrants over allegations of cybersquatting or between trademark owners and website developers, employees, partners over domain name theft and hijacking. And this first of its kind litigation case, the pornography industry attorneys have filed a lawsuit directly against ICANN alleging monopolistic conduct, price gouging, anticompetitive behavior and unfair business practices for establishing the .XXX top-level domain name (“TLD”), which is supposed to be the new home of adult content. Trademark owners are bemoaning the .XXX TLD because of the exorbitant price being charged in order to defensively register your trademarks on the XXX TLD in order to avoid pornographic sites engaged in trademark cybersquatting. The whole thing smells like a money grab by ICANN. If a trademark owner fails to register its trademark as a .XXX TLD, the risk of brand harm is real and significant.
Domain owners are already cashing in on registering solid, generic .XXX domains, and then reselling them for tens or hundreds of thousands of dollars.
The lawsuit filed in the United States District Court for the Central District of California is included in full below. Note the antitrust (Sherman Act) violations alleged in addition to unfair competition.
The defendants include ICM Registry, LLC, d/b/a .XXX, and Internet Corporation for Assigned Names and Numbers (ICANN), as well as a number of John Doe defendants.
One of the most interesting aspects of this lawsuit is that it is being brought by prominent members of the porn industry such as Manwin Licensing International and Digital Playground, Inc. These are entities that control the Playboy brand, YouPorn.com and others. These porn behemoths allege violation of antitrust laws because of the business model essentially requiring them to defensively register their own porn brands on the .XXX TLD. One allegation states:
“The creation of the .XXX TLD is forcing owners of trademarks and domain names in other TLDs to purchase from ICM expensive “defensive registrations” (or the right to block or prevent the use by others) of those same names in .XXX. Such defensive registrations are necessary to preclude others from registering and using the owners’ names in .XXX, and prevents the confusion or dilution in value of those names that would otherwise result.”
The ironic thing here is that major members of the porn industry, for whom .XXX was allegedly created, have no interest in abandoning their .COM domains in favor of .XXX. And they are clearly insulted by the business model of .XXX, which effectively requires them to register .XXX domains. At the core of this complaint is the fundamental premise that the entire .XXX business model was created in order to force the millions of trademark owners in the world to register .XXX domains which they will not likely ever use. Since ICANN has a monopoly over DNS, there are no alternatives available in order to handle the .XXX Trademark and brand issue (i.e. cybersquatting). All of this could be big trouble for ICANN as it gets ready to offer new TLDs early next year on virtually infinite top-level domain extensions. Will trademark owners be arguing that these new TLDs also require defensive registrations while providing no independent value to the trademark owner who lives and breathes his or her .COM domain?
As a founding partner of Traverse Legal, PLC, he has more than thirty years of experience as an attorney for both established companies and emerging start-ups. His extensive experience includes navigating technology law matters and complex litigation throughout the United States.
This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.
