CADNA expects the corporate cost for anti-cybersquatting of the new gTLD program to be $2 billion

The Coalition Against Domain Name Abuse, Inc. (CADNA), a 501(c)(6) not-for-profit corporation founded in 2007, and it’s President Josh Bourne say that Cybersquatting is a serious issue in the current domain name space, and with the launch of new gTLDs, the opportunity for cybersquatting will only increase. Bourne described the first launches as “the chickens coming home to roost.” The cost of defensive registrations in total, he continued, will be – conservatively – $2 billion. He also said that “That’s money companies won’t spend on jobs, expansion, or investment. Some companies will simply decide to throw up their hands and decline to defensively register, leaving themselves and consumers exposed to the cyber crooks.”

Josh Bourne is requesting increased penalties against cybesquatting and expanding the parties to PPC companies (and even Google or Yahoo?) that are held responsible for cybersquatting. I don’t see Josh Bourne or anyone else requesting penalties for reverse domain name hijacking.

Bourne’s proposed solution is updating and strengthening the ACPA by:

1.  Increasing penalties against cybersquatting. 

Under current law, cybersquatters face statutory damages of between $1,000 and $100,000 per domain name. The courts have, however, generally awarded limited damages closer to $1,000 per domain name. For cybersquatters that monetize hundreds of thousands, or even millions, of Internet domain names through automated programs, this is not a lot of skin in the game. Cybersquatters know that, for brand owners, the cost of filing and pursuing legal action far exceed the potential damages the mark owner is likely to be awarded, and are therefore unlikely to use the ACPA as a weapon. Amping up the risks associated with cybersquatting by increasing the damages (and implementing a “loser pays” system for the associated legal fees) would make more bad actors opt out of the business.

2. Expanding the parties that are held responsible for cybersquatting.

Certain parties profit from revenue-sharing arrangements with cybersquatting entities through Internet parking pages, pay-per-click advertising, and other monetization schemes.  ACPA should be expanded liability to cover those in active concert or participation with the registrant. This isn’t about pursuing third parties that act in good faith and support a safe and flourishing Internet – this is about discouraging third parties who purposefully shield bad actors and turn a profit because of it.