By: Charles Mombo
For: http://www.chocolatecity.cc/blog
Whether you know this or not, domain names have become the new gold mine or online real estate, now put that in your pipe and smoke it.
The highest amount ever paid for a domain name was $12 million for the domain Sex.com. Porn.com domain name was sold for an amazing $9.5 million. The third highest amount was $7.5 million for Business.com. The domain CreditCards.com was sold for $2.75 million. Despite these ridiculous and high prices, participants say these are fair prices and the sale may signal a new gold rush for Internet address speculators.
Domain monetization and domain tasting
Domain Monetization is the business of buying domains and running advertising on a landing page to earn ad revenue from traffic. The traffic to these domains comes from a variety of sources: old bookmarks, people typing in the domain ie "direct navigation", residual traffic from the previous web site or search engine results. Domain tasting on the other hand is the practice of buying a domain and using it for five-day "grace period" (the Add Grace Period or AGP) and testing the marketability of it. The trick is to sign up for hundreds of domain names; set up pages and run ads on them; after 2 day delete the domains that have no traffic; after 3 days delete those with fewer traffic; after 5 days delete domains with marginal traffic; keep those that have enough traffic. Google’s Analytics is a great and free way to monitor a site’s traffic. Some domain tasters also tried to sell the domain for a higher price within the five day grace period. The good thing about domain tasting is the refund policy. Domains deleted before the 5 day grace period are refunded in full and the "monetizer" gets to keep the ad revenue generated over those 5 days.
A long-term investment
As the economic becomes more and more ramshackle, people are looking for an alternative stream of income and are snapping up scores of generic domains, like ThatOneMcCain.com, EasyInterment.com, and ReligiousBuddy.com.The purchasing of domains is a long-term investment, like owning a home until an individual or a brokerage firm comes along with a big offer. While waiting and hoping for that prospective buyer, most placed text ads on their “parked site.” Domainers load the parked domain with pay-per-click advertisements by using services from Google, Yahoo, Adbrite or other providers. Visitors to these Web sites see little more than a list of text ads for products or services related to the domain name. According to the New York Times, contextual ads generated about $2 billion in revenue in 2007, or 13 percent of online ad spending.
Like a lottery ticket
The purchase of domain can be like buying a lottery ticket, except the odds of winning are much better. All you gotta do is hit the right niche, and you’re well on your way to being a
millionaire. When a technology is about to take off, some buy a domain name that pertains to it. The more generic the name, the better its value and at times the payoff is huge. Such was the case of Sex.com etc.
Sometimes, it lands the owner in legal hot water, hence Anti-Cybersquatting Consumer Protection Act and Laches.
Anti-Cybersquatting Consumer Protection Act (ACPA)
The Anti-Cybersquatting Consumer Protection Act (ACPA) is a federal law, amending the Lanham Act, that was enacted on November 29, 1999. It makes people who register domain names that are either trademarks or individual’s names with the sole intent of selling the rights of the domain name to the trademark holder or individual for a profit liable to civil action. ACPA targets cybersquatting, the registration of Internet domain names that are identical or confusingly similar to protected marks or the names of individuals. It is a response to the increasing incidence of registering such names to prevent the use of a name by others or to profit by selling a name to the owner of the mark or individual.
Laches
Laches is an equitable defense, or doctrine. The person invoking laches is asserting that an opposing party has "slept on its rights", and that, as a result of this delay, that other party is no longer entitled to its original claim. Put another way, laches rewards those who diligently assert their claim and penalizes those who procrastinate when avowing their rights to registering that domain regardless of having the copyrights to that name. Failure to assert one’s rights in a timely manner can result in claims being barred by laches. Laches is also a form of estoppel for delay.
A defense lawyer raising the defense of laches against a motion for injunctive relief could argue that the plaintiff “sat on his behind” and finally comes "dragging his feet at the eleventh hour" when it is now too late to grant the relief sought, at least not without causing great harm that the plaintiff could have avoided.
That reminds me of a recent case from the state of Washington involving The Wailers. Two bands have shared a common name, the "Wailers," for many years. One band is famous, and the other is not. One is an American rock band from Tacoma, Washington and the other is the “most famous Wailers” – Bob Marley & The Wailers, a reggae band created in 1974 by Bob Marley, after Peter Tosh, Bunny Wailer and Ronald 9F Jauculan left the precursor band.
The American Wailers (Plaintiffs) has been using the name since 1959. The famous band has been using variants on the name since 1964. The Bob Marley’s Wailers registered the domain name "Wailers.com" in 1998, but never sought to register the mark with the United States Patent and Trademark Office. The American Wailers sought registration of the name "Wailers" with the USPTO in 1999. In 2007 the American Wailers sued for trademark infringement and cybersquatting. The court ruled there was no cybersquatting because the reggae band acted in good faith to get the domain name. The American Wailers of Tacoma lost its trademark claim on the basis of laches. To simply put, they waited too long or "slept on their rights," in legal parlance. The American Wailers subsequently went ahead and registered the domain www.thefabulouswailers.com.
Another case that comes to mind and appears to be brewing an olympic magnitude storm is the issue with the domain Chicago2016.com. Stephen Frayne Jr. registered Chicago2016.com in August 28, 2004, about two years before the Chicago Olympic bid was launched. Chicago is in the running for the 2016 Olympics and the Chicago 2016’s United States Olympic Committee (USOC) uses Chicago2016.org as its web site. It wants to get Chicago2016.com and has filed for arbitration with World Intellectual Property Organization (WIPO) to get the domain name.
Stephen, a 29-year-old MBA student is studying entrepreneurship at Northwestern University’s Kellogg School of Management. The city of Chicago along with the U.S. Olympic Committee are trying to wrest the domain from Stephen.
This will be an interesting case to watch as it pertains to the Anti-Cybersquatting Consumer Protection Act and Laches.
More and more courts are now granting Defendants motion for summary judgment, based on the fact (1) that Plaintiffs had waited too long to invoke any exclusive rights they might have once had, (2) Plaintiffs’ trademark registration did not “wipe out” Defendants’ prior, non-registered common law rights, and (3) Defendants’ registration of the domain name falling within the “safe harbor” provisions under the Anti-Cybersquatting Consumer Protection Act afforded to good faith registrants.
Regardless of the outcome of the Chicago2016.com case, there’s a lesson here for the City of Chicago and all other organizations, large or small. Before going public about an ad campaign or a product, etc., one must be proactive and register related domain names. Domain names are important and MUST be considered as an on-line real estate.
About the author: Charles Mombo is the CEO of Burnedbrass Technologies, Inc. He holds degrees in computer science, management Information systems and business administrations. He also is an Adjunct professor at a Junior College and teaches Computer Information Systems and Small Business Management.
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It is about time the City of Chicago start hiring more qualified MIS/IT majors as opposed to political hiring. Some may not agree with me, as was noted recently. Commissioner Earlean Collins (D-Chicago) has argue that political hirings do not necessarily lead to inferior employees. “Let’s be real here. After you leave, political interference in hiring will still be here,” she said. Chicago has a Federal monitoring program that seems to be ineffective at its best. The 20-year-old Shakman decree, which bans political hiring practices in Chicago, came back into the limelight recently when Mayor Richard M. Daley moved to overturn the ruling.
The City of Chicago acted irresponsible, naive and incompetent in not obtaining Chicago2016.com and now they want to arm wrestle the young man. I wonder what is their legal defense.