For the cost of two cups of coffee, one man half a world away held a $25-million empire hostage, in one of the highest-profile domain disputes stemming from a rising tide of cybersquatting originating in India.
The epic conflict involved Brent Oxley, the founder of HostGator (which later sold for close to $300M), who had spent millions of dollars on ultra-premium domain names like Create.com, Give.com, Texas.com and Broker.com (I wish I had that one instead of Broker.xxx, but the minimum offer is $2M) and Indian domainer Puneet Agarwal, who filed a lawsuit claiming that Oxley had commissioned him to broker some premium domains.
The best strategy here is to take the time and register the cheapest domains with your brand name.
To initiate the lawsuit, Agarwal spent a mere 820 rupees (about $12), but the impact was anything but small, as it caused GoDaddy to lock 25 of Oxley’s domain names, including Piano.com. Flute.com, Memo.com, Admirer.com, Advise.com, Message.com, Distribute.com, CIA.com, Item.com and many more.
Oxley denied the claims in the lawsuit; Agarwal never produced any contract or agreement, and even the domain brokers on the other side of those deals denied having dealt with Agarwal at all. None of this stopped Agarwal from demanding amounts ranging from 5 million to 11 million dollars and sending dozens of threatening and violent emails to Oxley. Agarwal may have better used his time by serving Oxley with the legal documents to pursue his case in India, but after a year, that still had not been completed.
Following the wide-reaching publicity of the dispute, the domain locks were released by GoDaddy. Oxley had already moved his entire portfolio to another registrar, been forced to file a lawsuit in Texas to try to obtain a court order to release the domains and lost over $5M in potential domain sales for the locked domains.
The above dispute is a prime example of today’s abuse facing the domain ecosystem. While the good guys are winning (in both small-scale and large-scale disputes), the bad guys are making it expensive and time-consuming. Fortunately, there are a couple of simple ways to avoid being victimized by the most common scams.
REGISTER AS MANY DOMAINS AS POSSIBLE ON YOUR ROOT NAME
Last year, my company JuicyAds was contacted by someone looking to sell the domain “juicyads.online," which they had registered online the previous day for approximately 99 cents. In broken English, they stated that they wanted four figures for a domain that violated our multiple trademarks. There was a maddening back-and-forth where we repeatedly advised the cybersquatter that what they were doing was not only illegal and in bad faith, but that we would seize the domain from them. Their reply was pretty much, “It’s cheaper to pay me than to file with WIPO.”
We took the case to WIPO, and in plain view of WIPO arbitrators, the cybersquatter continued to try to solicit the sale of the domain for amounts ranging from $750 to $3,000. Simultaneously, this individual, “Manas Biswal” aka “Profitz” fabricated a backstory that they were developing “an online juice drink cart store where users can order juice drinks online.”
Even WIPO stated in their written decision that it seriously doubted their use of the term “JuicyAds” for the project, and it “did not fit that narrative.” Even after the domain was seized, Mr. Manas Biswal continued to demand payment of $1,500, but he had already lost the domain in the decision favoring JuicyAds, and it was subsequently transferred. Game over.
Many factors compound the domain-squatting problem. The ever-increasing number of top-level domains (TLDs) makes it difficult for any business to “register everything” and especially not in an economical way. Also, the cheap initial registration price makes certain domains attractive for squatting and extortion attempts.
The best strategy here is to take the time and register the cheapest domains with your brand name. There are many TLDs that cost only a few dollars to register and those are the most attractive for these pseudo-extortion attempts. When domain squatters start looking at domains to purchase to try to squeeze a trademark holder, they don’t want to be shelling out $25 or $50 per domain to do it. It is cost-prohibitive.
BE SELECTIVE AND CREATE A COMPANY POLICY ON WHAT TO PURSUE LEGALLY
JuicyAds wasn’t alone in this fight against domain cybersquatters. MojoHost has also come out swinging against domain holders that violate their trademarks, filing multiple WIPO claims against a series of whack-a-mole-style domain squatters. The most recent was (you guessed it) from India.
An individual by the name of “Maxx” registered the domain “mojohost.tech” containing the “MojoHost” brand name and appeared to use it to try to generate search-engine traffic to a technology or marketing business. When Silverstein Legal filed a WIPO claim for that domain, four days later, Maxx registered “themojohost.tech” and did the same thing all over again. In both cases, WIPO decided it was bad faith and an intentional attempt to disrupt MojoHost’s business and decided to award the domains in their favor. Justice wins again.
Even if you own every TLD for your root brand, all it takes is someone to add “the” or “my” or “shop” onto a domain to potentially infringe on your brand. You should speak with your trademark attorney regarding what you should or should not ignore. However, a good rule of thumb is to prioritize domains that are being actively used (anot just “parked”) and to avoid trying to contact or litigate domains that have added a word or two and are operating outside your trademark class. True squatters won’t provide real “bona fide” goods or services, and people who do may be protected by operating in a significantly different vertical. There are 330 million registered domains on the internet and you can’t chase them all down with flaming pitchforks.
NEVER KEEP ALL YOUR DOMAINS AT ONE REGISTRAR
While most people won’t follow this bit of advice, it would have saved Brent Oxley from complete domain lockup: if you keep collections of your domain portfolio at different registrars, you won’t be at the mercy of just one company. It is convenient to have everything in one place, but from a risk-management standpoint, it’s a mistake.
The amount of damage possible for pennies in foreign jurisdictions is imposing a staggering cost on North American businesses. The solution is unclear, but something is definitely broken. It seems most likely that these companies will start filing Indian lawsuits of their own to recoup the damages caused by these bad actors for the cost of your daily Starbucks coffee trip. I still wonder when Manas will open his juice drink store. I’m thirsty.
Juicy Jay is best known as the CEO and Founder of JuicyAds. His brokerage Broker.xxx “The Dealmaker” helps people buy and sell adult websites, businesses, and domains.
