by Traverse Legal, reviewed by Enrico Schaefer - October 28, 2008 - d. Domain Name Cybersquatting Law, Lawsuits & Cases
Despite the cybersquatting lawsuit brought by Verizon, Navigation Catalyst Systems, Inc. continues to target and register trademark protected domains and famous brands, as noted below in a recent panel decision against it under the UDRP wherein it was found to have engaged in bad faith cybersquatting on 41 domains of another famous brand. Is it time Navigation Catalyst Systems automated registration software, which clearly targets high traffic and likely trademark protected brands, be enjoined for the good of the domainer community?
Before getting to this important question, we are apparently the first to report that Navigation Catalyst has settled the lawsuit brought against it by Verizon, as well as its counterclaims against Verizon arising out of cross-allegations of Cybersquatting under the Lanham Act and Anti-Cybersquatting Protection Act (ACPA). The Court had previously ruled in favor of Verizon on its Motion for a Preliminary Injunction in a strongly worded opinion questioning Navigation Catalysts alleged trademark scrubbing methods and specifically finding a likelihood that Verizon would prevail in establishing bad faith registration and use by Navigation Catalyst Systems, Inc. The terms of the settlement of "all claims" are simple; Navigation Catalyst Systems, Inc. agreed not to register or assist in the registration of any of Verizon's trademark protected brands. The stipulated order of settlement required nothing of Verizon concerning the counterclaims of cybersquatting filed against it by Navigation Catalyst Systems for Verizon's DNS wildcarding practices which clearly infringed on 21 of Navigation Catalyst Systems' registered trademarks. However, these cybersquatting and trademark infringement counter-claims diminished Verizon's 'victim status' and likely provided the leverage needed by Navigation Catalyst Systems to resolve this matter without paying millions in damages for 'bad faith' statutory damages and attorney fees as provided under the ACPA.
But did Navigation Catalyst Systems get off easy? Are they the institutional 'mass cybersquatter' that so many recent domainers have indicated are giving the industry a black eye? Traverse Legal's domain dispute attorneys recently won a Uniform Dispute Resolution Policy (UDRP) cybersquatting arbitration at the National Arbitration Forum which raises serious questions about Navigation Catalyst Systems' alleged 'scrubbing' policies. This cybersquatting matter involving 41 trademark protected domains registered by Navigation Catalyst Systems as noted in this panel decision. A large number of these registrations were original registrations and must have targeted the subject trademarks, seriously undermining navigation Catalyst Systems' "whoops" defense to the bad faith cybersquatting allegations. Moreover, many were held for long periods, well beyond the 'tasting period' where Navigation Catalyst Systems alleged in Court that it purged its automated registrations for trademark protected domain names. Unlike the Verizon lawsuit where only 7% of the trademarked domains were held beyond the AGP, all 41 of the above noted domains were held beyond the AGP.
As previously reported at Eric Goldman's Technology & marketing blog, Navigation Catalyst Systems, Inc., and Basic Fusion, its registrar engaged in various cybersquatting practices, including:
* high volume automated domain name tasting. Many of the registered domains have nothing to do with anyone's trademark, but some were typographical error versions of Verizon's trademarks (allegedly, nearly 1400 were variations of Verizon's trademarks)
* trademark "scrubbing" of domain names during the tasting period (both an automated blacklist and a manual review)
* disabling ads on any challenged domains and offering to transfer those domain names to the trademark owner
Despite the alleged scrubbing, Navigation Catalyst Systems registered and kept 126 domain names that Verizon alleged infringed its trademark. Navigation Catalyst Systems also tasted nearly 1300 other trademark protected domains during the tasting period.
Navigation Catalyst Systems takes the untenable position that it is not a bad faith cybersquatter because: (a) it has automated software which registers domains without initial human involvement and (b) it turns over trademark protected domains on request of trademark holders. Navigation Catalyst Systems seems to miss the point. Anti-cybersquatting laws preclude an automated system of registration which registers famous trademarks and obvious trademark protected brands. These are not 'grey area' or defensible domain registrations.
Navigation Catalyst Systems, Inc. fails to answer the fundamental question of how their software code registers these trademark protected brands in the first instance when they are neither dictionary words, nor derivations of dictionary words. It is clear that their automated software is identifying high traffic web sites, generating a list of typographical derivations of the domain names for those sites and registering those domains. Obviously, most of those high traffic domains are going to be trademark protected brands. This is the essence of bad faith domain name cybersquatting which is hurting all legitimate domainers and the industry as a whole.
Here are some additional resources concerning the Verizon v Navigation Catalyst System lawsuit:
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.
