Looks like yesterday's post was quite timely.

The Information Technology Association of America (ITTA) put on a seminar in Washington D.C. today the theme of which was: 

"Internet "Click Fraud" Tricks: Domain Name Tasting, Joy Riding, Parking, Kiting and Other Dirty Tricks ".

The press release for the event read in part:

"A new kind of trademark exploitation is emerging online through practices known as domain name “joy riding,” “tasting,” “parking,” “kiting” and “spying.” Cyber squatters are exploiting technical and legal loopholes and using sophisticated technology to automatically generate, register and misuse thousands of variations on well known brand names. These practices are a part of the problem of the Internet advertising “click fraud” problem that Business Week estimates cost advertisers more than billion dollars per year while netting a click-fraud industry $300 million to $500 million a year. 

At an ITAA webcast and in-person meeting being held at AT&T's offices at 1120 20th St. NW, Ste. 1000 N, Washington DC on Thursday, April 26 at 2pm ET, experts will provide the most up-to-date information on the phenomenon, explore its causes and discuss potential solutions. Speakers will also discuss deficiencies in U.S. law, including the U.S. Anti Cybersquatting Consumer Protection Act, international regulations and existing trademark search-protection services for addressing the issue and will offer solutions to this emerging crisis for trademark holders."

The presenters for the event were: 

Sarah Deutsch

"Sarah Deutsch is Vice President and Associate General Counsel for Verizon on global Internet policy issues, including liability, privacy, intellectual property policy and Internet jurisdiction. She currently represents Verizon on a host of domestic and international Internet issues ranging from digital rights management, privacy, the Hague Convention, European Directives, ICANN, domain name issues, and U.S. Internet legislation.

Sarah was selected by U.S. Commissioner of Patents and Trademarks to serve as Private Sector Advisor to the U.S. Delegation to the World Intellectual Property Organization 1996 Conference on the WIPO Copyright Treaties. She served as one of five negotiators for the U.S. telecommunications industry in negotiations, which resulted in the passage of the Digital Millennium Copyright Act.

David J. Steele

David J. Steele is a Special Counsel with the law firm Christie, Parker & Hale. He was admitted to bar 2000 (California); U.S. District Court, Central District of California; registered to practice before U.S. Patent and Trademark Office. Adjunct Professor, Trademark and Internet Law, Loyola Law School, Los Angeles, 2001 to present. Education: California State Polytechnic University, Pomona (B.S., Electrical and Computer Eng., 1996); Loyola Law School, Los Angeles (J.D. 2000). Author: "At the Crossroads of Law and Technology," Loyola of Los Angeles Law Review, Vol. 33, No. 3, 1033. Author: "Closed Corp. v. Open Sesame: A Simulated Infringement Case Arising in Cyberspace," Loyola of Los Angeles Law Review, Vol. 33, No. 3, 1055. Formerly, Engineering Manager, Fibertron Corporation working on design and implementation of high speed computer networks and Internet engineering. Technical Advisor and member of the Network Advisor Board for Networld+Interop. Member of the Internet Engineering Task Force. Member of the Boston Working Group, helping the U.S. Government transfer control of the Internet to ICANN.

Marilyn Cade

Marilyn Cade is an independent consultant focused on the nexus of Internet and technology issues and public policy, and the implications for the Internet, online services, and Internet Governance, following a distinguished career at AT&T. She was involved in organizing and directing industry’s involvement in the processes that led to the founding of ICANN, and has been an active participant in many of the policy initiatives in ICANN’s Generic Names Supporting Organization, including WHOIS, Transfers, and the creation of new gTLD policy. She is an active participant in numerous international fora, including ICANN, ITU, WIPO, the World Summit on the Information Society (WSIS) and the resulting Internet Governance Forum. For several years, she served on a private sector advisory council for the Director General of WIPO, with a focus on creating a balanced approach to IPR in the online world.

She is recognized both domestically and globally for her expertise in policy issues involving the Internet and domain name issues, as well as the broader issues of Internet Governance.

Given Verizon's pending cybersquatting claim against iReit one might expect  Sarah to have strong opinions on the subject. She does. Here is Sarah's powerpoint presentation.

She paints a picture of an industry in disarry, in need of regulation. The picture she painted of domain parking was not flattering to say the least. I agree with much of what she has to say. While I will most certainly not defend the behaviour of those she uncovers because I believe their behaviour to be indefensable, I have to say,  the picture Sarah paints is incomplete. It is incomplete in two ways.

It is incomplete in that it points to problems yet offers no solutions; and it is incomplete in that it is incomplete, I mean omissive; in a material way.

Let's take a look at the problem and I'll give you the solution!

Sarah states that domain tasting, kiting et al exploits a loophole in the ICANN domain name registration process. Solution, close the loophole. The solution to tasting, to a large extent, and to kiting in its entirety is so utterly simple that the fact it has not been implemented calls into question the effectiveness and motives of ICANN itself. 

There can be no question that tasters and kiters have abused the refund period process. Truth be told they are likely the only ones using that provision of the policy. Registerfly wasn't even registering the domain names their customers paid for! Can you imagine a registrant calling them up and saying "I registered the wrong name by mistake. Can I get a refund? You can charge it back to ICANN." Hardly! In truth, very few registrars, if any, would grant refunds for names registered in error. Some state as much on their sites! 

ELIMINATE THE TASTING PERIOD: ELIMINATE REFUNDS.

Make everyone pay for the domain names they register in full at the time of registration. This change would by definition eliminate kiting. It would also make large scale tasting a very costly proposition, which should reduce its incidence.

If Joe Blow messes up and buys the wrong domain, he's out $10, no big deal.

PROSECUTE DON'T SETTLE

Sue but don't settle. Until the message is sent that the behaviour we're alluding to will not only not be tolerated, but that it will no longer be profitable, the problem is relegated to a financial decision based on cost, benefit and associated risk. Every time a Neiman Marcus settles with a Dotster it does nothing but perpetuate the problem Sarah details. If the perpetrater is making  millions a month, what is an out of court settlement for 10-20 million? Its called a bargain. Squatters have been paying 3-5 years revenue for typo portfolios, trademark holders are settling for several months of revenue! America gave you laws; use them.  

FOLLOW THE MONEY

Why is the focus always on the domain name owner? What about the parking companies serving tens of thousand of domainers? What about the search engines that feed them? The domain owners are at the bottom of the food chain, not the top, follow the money. What is the source of iReit's revenue? Google and Yahoo are the largest Internet advertisers in the world. They buy and sell domain traffic, they populate the ad pages. The controls they have in place are obviously insufficient. Look at their role in this; they're party to this and profit from it. They too take money off of the tables of rights owners, many of whom are their largest customers I might ad. Their role, and motives need to be examined and their business practices challenged. I suppose that the harsh reality is, they're too big to tackle. Someone has to do it otherwise corporate America will run around like firemen trying to put out an endless number of brush fires when they could and should be attacking the source of the flames.  

Having said that, I agree with Sarah in principal. There is a problem and it is serious. The problems with the pay per click industry simply must be addressed. The answer may well be regulation but ICANN must act not just examine.

Sarah great minds think alike! Now, about slide number 10: