Verizon’s dogged chase of faceless cyber squatters nets $33.2 million

Verizon communications, an US broadband and telecommunications company has been awarded $33.2 million by a court in California after it won a lawsuit against an Internet domain registration company for trademark infringement and illegal cyber squatting.

In one of the largest ever awards given in a cyber squatting case by a US court, Verizon communications doggedly pursued and filed a case against OnlineNIC, an Internet domain registration company based in San Francisco in June this year for unlawfully registering at least 663 domain names that were either identical to or similar to Verizon trademarks, to confuse Verizon customers by taking advantage of Verizon's name.

According to Verizon, OnlineNic diverted traffic away from the Verizon sites with some of the domains registered spelled Verison with an ''s'' instead of a ''z'' or with transposed letters. OnlineNIC used online automated process to register the addresses and concealed its true identity.

Verizon claimed that OnlineNic had illegally registered more than 900,000 domain names with most of them either identical to or confusingly similar to some of the world's biggest companies, such as Wal-Mart, Yahoo, Google, Adidas and MySpace.

Verizon had asked for $66.3 million in damages as OnlineNic had used the names like, iphoneverizonplans.com, myverizonwireless.com and verizon-cellular.com.

According to the OnlineNic's Web site, the company is an accredited registrar for the organisation that oversees the functioning of the internet, Internet Corporation for Assigned Names and Numbers (ICANN) since 1996 and the site provides a mailing address in Oakland, California, not San Francisco.

Even after investigation by Verizon, the company could not serve summons as it could not find the physical address of OnlineNic, with one of their addresses being a body shop. Verizon said it suspects that the company may have its offices offshore.

OnlineNic did not appoint lawyers to defend itself in court. The federal court judge granted an ex-parte order ruling that OnlineNIC, was in breach of cyber squatting laws and awarded Verizon $50,000 for each of the 663 addresses that OnlineNIC had hijacked, totaling up to $33.2 million and froze OnlineNic's assets and ordered the company to transfer all identical or confusingly similar to Verizon's.

"This case should send a clear message and serve to deter cybersquatters who continue to run businesses for the primary purpose of misleading consumers," said Sarah Deutsch, Verizon vice president and associate general counsel. "Verizon intends to continue to take all steps necessary to protect our brand and consumers from Internet frauds and abuses."

Cybersquatters often register web addresses close to well known companies and retailers, where consumers making typo errors will land up in sites where the illegal cyber squatter will make money by serving them pay-per-click ads. 

Verizon, had won similar cases in the past such as with Houston-based iREIT and Navigation Catalyst among others and is a member of Coalition Against Domain Name Abuse (CADNA), a non-profit coalition founded last year to fight cyber squatting.

During the just concluded US presidential elections, cybersquatters had registered more than 1,800 domain names, where people would surf for information regarding the elections and would be diverted to sites for pay-to-click ads.

Microsoft had also filed cases against cybersquatters who had illegally filed domain names on its popular Xbox 360 and Hotmail products.