Cybersquat Spats Move to Virginia

If you own a domain name resembling the identity of a big, deep-pocketed company, beware, the Electronic Frontier Foundation says--because you could be dragged to Virginia to defend it.

Due to a provision in the 1999 U.S. Anticybersquatting Consumer Protection Act, domain name disputes could be required to be settled in the state of Virginia if the party staking claim to a domain name brings the suit there, regardless of whether the plaintiff or defendant have ties to the state. This is because domain name registry and registrar Network Solutions has its headquarters in Virginia, and a jurisdiction provision in the act allows for a dispute over an intangible property to be brought where the registrar is located.

A cybersquatter is one who registers to own a domain name that is a trademark of another company, or a name similar to a well-known business or product, with hopes of profiting by selling the name to the trademark-holder.

The Electronic Frontier Foundation is heading to Virginia's 4th Circuit Court of Appeals Thursday to fight against a lower court ruling that the case of a Canadian domain name holder who was sued by a large Canadian company for the rights to a domain name could proceed in Virginia due to the provision.

"If the 4th Circuit Court of Appeals doesn't clear this up, we could see a disturbing trend of folks with money and resources taking people to court in Virginia ... hoping the current domain holder won't be able to afford to fight," said EFF Legal Director Cindy Cohn.

Hearing Thursday

The EFF and lead counsel in the appeal, Eric Grimm, will be arguing the case against the U.S. government Thursday morning.

Under the provision, "small companies and hobbyists are getting picked on ... so large companies can have a greater competitive advantage," Cohn said.

What's more, an appellant's brief filed in the case last March warned that U.S. federal courts seated in Virginia could be turned into "a haven for thousands of foreign trademark disputes from all over the world."

Although the EFF argues that the provision could provide a competitive advantage for members of some domain name disputes, government representatives say that having cases proceed in the jurisdiction of the registrar was only meant as a remedy of second resort, given that many cybersquatters are difficult to locate or do not provide their true whereabouts.