Typosquatter Plays Innocent By Casting Microsoft As Big And Mean

from the pot-meet-the-kettle dept

Last month, Microsoft sued typosquatter Alf Temme for redirecting mistyped domains like "ho0tmail.com" and "hot5mail.com" to his own website, which sells ridiculously expensive exercise machines. Typosquatting has been going on since the early days of the internet, and the practice eventually resulted in the passage of the Anti-Cybersquatting Consumer Protection Act (ACPA), which essentially makes typosquatting illegal. That said, Temme is complaining that the $500,000 settlement offer that Microsoft has requested from him amounts to "extortion" in his eyes. Microsoft originally sued for $2.4 million, or about $100,000 in statutory damages for each of the 24 domains named.

Typosquatting seems to attract persistently slippery individuals. For example, even after typosquatter John Zuccharini served time and was fined for his typosquatting behavior in 2003, it was not long before he returned right back to his typosquatting behavior in 2007, earning him another $164k in fines.

Temme claims that Microsoft's $500,000 settlement offer is "in effect trying to do is put a small company of eight employees out of business." While the David & Goliath angle might play well, digging a little more deeply into the story casts a different light. Considering that Temme has registered around 1,000 domains that could be considered typosquatting, it's clear that he has made a habit of this deceptive practice. Furthermore, Temme has already lost $130,000 to Dell in a similar lawsuit. So, while Temme claims that he would happily turn over the domains in question, to do so would merely make typosquatting even more profitable than it already seems to be. Likening mistyped domains to prime real estate, Temme equates the practice to buying "some property next to Disneyland."

Though this case may have some slight similarities to the pre-settlement groups that have been set up to deal with copyright infringement, the difference is clear: in this case, unlike the copyright "criminals," not only is Temme in clear violation of typosquatting laws, he has made it an integral part of his business practice to do so. So, whereas the pre-settlement groups use a shotgun approach in an extortion-like shakedown, Microsoft's offer is specific to the Temme case only. Settling potential lawsuits, by themselves, is not a form of extortion. It's just when the potential viability of the actual lawsuits are suspect that questions of extortion-like actions begin.

That said, Temme must be selling a good number of $14,000 exercise machines if he considers these fines to be just a part of his cost of doing business.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    Shola Abidoye, Apr 13th, 2010 @ 2:09am

    Domain Names are Legitimate Alternative Assetts

    Typo-squatting is a problem and it should be addressed. However, one should realize that this practice is not in the same class as legitimate domain investing. Domain names have emerged as solid alternative assets. These assets have a hybrid nature and carry the cash flow potential of income yielding investments with similar qualities associated with equity plays as well - think of convertible securities. Unfortunately, the market is not at all efficient and proper classification and valuation of assets is key. But if one thinks of domain names as virtual real estate, one can quickly see the potential for the asset class and its eventual role in asset allocation for institutional investment in the long run - IMHO.... Proper asset pricing is crucial for all stakeholders and we are endeavoring to play our part in the creation and sustainability of the investment landscape over the long run...proper education for end-users, portfolio holders and those who cover the industry as well. Anyone interested in sharing best practice research or quantitatively rigorous analyses should feel free to connect. Thank you for the story…. Shola Abidoye VRE Capital Group http://www.vrecapgroup.com

     

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      Michial Thompson, Apr 13th, 2010 @ 4:15am

      Re: Domain Names are Legitimate Alternative Assetts

      Shola;

      It's thinking like this that has pretty much RUINED the .com domains. It is nearly impossible to find an available domain that even comes close to representing a company because of domain squatting.

      Even with Trademarks it is nearly impossible to get your trademarked domain back without some ridiculous amount of extortion fees.

      With e-commerce growing day in and day you, Laws need to be passed preventing domain squatting to protect those of us that really do earn our living from jackasses that do nothing more than register domains all day for pennies at a time.

       

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        BBT, Apr 13th, 2010 @ 6:40am

        Re: Re: Domain Names are Legitimate Alternative Assetts

        Simple problem with a simple solution. Require a significant annual fee for domain registration. It will no longer be economically feasible to hold every domain name under the sun. Allow some small number of domains to be held by an individual for a low cost, but charge the high rate for domains past that number. That way, individuals still have easy access to set up a domain cheaply, but domain hoarders can't continue.

        Even better would be if we could work out a "use it or lose it" kind of system, where you would have to actively use a domain...but I'm not sure how you would establish a useful set of rules to determine what constituted real "use". Best to stick to a strict economic deincentive and let the market work it out.

         

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        Shola Abidoye, Apr 16th, 2010 @ 11:18am

        Re: Re: Domain Names are Legitimate Alternative Assetts

        I'm sorry but I beg to differ. It almost as if you are lambasting good old fashioned ethical capitalism here and begrudging smart risk takers. ANYONE COULD HAVE BOUGHT THESE DOMAINS. Should I or any other legit investor be blamed because I applied my graduate school education to the detailed study of domain assets while everyone else laughed and were all excited about running off to grab that sexy job at Goldman or Mckinsey? Respectable domainers spend thousands of hours pouring over keyword data, looking at market prices and may register 1 out over every 500 domains they come across. Why should we be blamed by people who weren't sagacious enough to go out and buy them themselves. Even today people don't take the asset class as seriously as they should. I give people advice all the time about buying the domains. For instance, I tell people, don't be cheap and go out and buy a domain, then redirect it to your twitter or facebook page. Don't build an asset (say a social following) on a domain you don't own. What if you awaken one day and after spending months or years building up a twitter or facebook or [insert name of content built on a domain you don't own] someone else decides they don't want you on "their virtual land". It only costs $9.95 to buy a domain. If you owned the domain, you have the freedom to redirect that traffic. Still such advice isn't listened. to. The term "domain squatting" is a term used for people who weren't smart enough or risk taking enough to use their own resources to buy assets available to EVERYONE. If one person chooses to buy a hamburger while another chooses to take their college stipend money and buy domains - or work an extra work study job, or create a student investment club and pool their resources - you name it...why should they be blamed.

        Information about domains is readily available online. In a capitalistic economy, it is correct and proper that those who do the work, and take on the risk should be rewarded for their efforts. There are people who will read this right now and instead of going out and using their resources to buy valuable domains, will go out tonight and buy a pizza or a couple of bloody marys (lol) instead of taking some extra time to sit down, do some research and study the asset class. So a year or two from now, should I or someone like me be blamed because I spent a Friday night searching for valuable assets, while they hung out? No, I don't think so....thank God this is not how we still do it in the good ole US of A....

         

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    Ronald J Riley (profile), Apr 13th, 2010 @ 2:42am

    Microsoft needs the money to pay for their misdeeds

    Look at how many times Microsoft has been caught squatting on others patent turf. They are just trying to offset their losses:) I think that Microsoft reap what they sow.

    Ronald J. Riley,

    Speaking only on my own behalf.
    President - www.PIAUSA.org - RJR at PIAUSA.org
    Executive Director - www.InventorEd.org - RJR at InvEd.org
    Senior Fellow - www.PatentPolicy.org
    President - Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (810) 597-0194 - (202) 318-1595 - 9 am to 8 pm EST.

     

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      identicon
      Anonymous Coward, Apr 13th, 2010 @ 3:12am

      Re: Microsoft needs the money to pay for their misdeeds

      Is that long sig really necessary?

       

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      Anonymous Coward, Apr 13th, 2010 @ 5:19am

      Re: Microsoft needs the money to pay for their misdeeds

      Low signal to noise ratio and off-topic. Give this man a cookie!

       

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      Michael, Apr 13th, 2010 @ 6:04am

      Re: Microsoft needs the money to pay for their misdeeds

      Do you have some examples?

       

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      identicon
      Anonymous Coward, Apr 13th, 2010 @ 12:14pm

      Re: Microsoft needs the money to pay for their misdeeds

      I think you're an idiot.

      John F. Doe

      Speaking only on my own behalf.
      President www.youareanidiot.com - JFD at youareanidiot.com
      Executive Director - www.stfu.org - JFD at stfu.org
      Senior Fellow - www.ihatemicrosoft.com
      President - Alliance for Neckbeards against M$
      Caretaker for Neckbeards on behalf of deceased founder nobody cares about
      Washington, DC
      Direct (810) 555-5555 - (202) 555-5555 - 9 am to 8 pm EST.

       

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    Griff (profile), Apr 13th, 2010 @ 3:07am

    What's the problem exactly ?

    Did someone buy an exercise bike by accident while trying to read their mail ?

    If noone owned the hot5mail domain at all, then the person would type hot5mail, get an error, and realise they had mistyped and try again.
    As it is, they see an exercise machine ad and they try again.
    Unless they want an exercise machine in which case he is offering a service.

    Obviously if he had a website pretending to be hotmail that would be different. And if he had a website offering a competing email service, that would


    I am far more bothered about the fact that I could register ford.info when the new .info domains came out and then be pretty much forced to hand it over to Ford because they are large and it causes confusion for the domain not to lead to them.

    Is the problem just sour grapes because he's making money ?
    If he had a link saying "did you mean 'hotmail' ? click here" then would that make it any better ?

    This (to me) is like putting a furniture shop in the alley before the alley with the Starbucks in. Some people looking for Starbucks turn down the wrong alley by mistake, and most realised their error but a small few see the furniture shop and end up buying a sofa. If we all know that they'd never have gone down the alley if they had not been looking for Starbucks, does that give Starbucks the right to close down the furniture shop ? It's not like they lost any real business.


    I can't see the issue here if the guy is not competing.
    If the gripe is "the person wasn't looking for exercise machines when he landed on that hot5mail website" then that would be true of most advertsing in history pre-adwords. We just try to catch passing eyeballs the best we can, be it on a bus shelter, the side of a taxicab, whatever.

    This guy went out and bought a piece of real estate to hang his banners on and people pass by (albeit by accident) and see his ads. Just like the alley in the analogy above.

    I say good luck to him. Microsoft can always make him an offer for the alley.

     

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      identicon
      Anonymous Coward, Apr 13th, 2010 @ 5:04am

      Re: What's the problem exactly ?

      Yeah, I dont get it either.

      How was Microsoft harmed, financially or otherwise, by the squatting upon hotmail by someone selling exercise equipment?

       

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      identicon
      Michael, Apr 13th, 2010 @ 6:09am

      Re: What's the problem exactly ?

      What if it was a hard-code porn site? Would it bother you that a mis-typed hotmail URL would send your kid to that?

      Now if your answer is yes, the difference between his site and the porn site is a matter of taste. Since we cannot litigate taste (according to the supreme court in the US, at least), we have to prevent the deceptive practice entirely.

      I don't think this is actually as big of a deal as domain name squatting (which I think is a problem that makes the internet less useful), but I can see why there are laws against it.

       

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        Griff (profile), Apr 13th, 2010 @ 2:01pm

        Re: Re: What's the problem exactly ?

        == we have to prevent the deceptive practice entirely. ==

        What deceptive practice ?
        Did they pretend to be microsoft ?
        Who exactly was deceived. Did someone think that you can misspell a website and get there anyway ?

        This is like having a phone number almost the same as the X Factor voting line and when someone calls you answer "half price pizza for one night only". Most will hang up and redial, some might fancy a pizza.

        And if there was a legitimate gay porn site called hotmale.com, (there might be for all I know) whose fault is it that your kid went there by mistake ? Perhaps MS's fault for having such a daft name as "hotmail".

         

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          Michael, Apr 14th, 2010 @ 6:11am

          Re: Re: Re: What's the problem exactly ?

          Good points all.

          Like I said - I don't think this is that big of a deal. I can follow the logic people have with porn sites or other (possibly) undesirable content.

          Let me be clear - I don't think the mis-type URL use like this guy has done is really a problem that there should be a law for. However, there is a law, so MS asking that it be enforced does not seem out-of-hand.

           

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    Big_Mike (profile), Apr 13th, 2010 @ 4:59am

    I'm sorry, but if I type hot5mail and I don't see what I expect I retype it. If I dial the wrong number and don't hear what I expect I hang up. Sometimes I have been known to talk to the person on the wrong number for a while before I realize it wasn't who I though it was. Does that mean the person I was calling could sue them for having a number that is close to their number? I use BigMike as a user name a lot, sometimes Big-Mike or Big_Mike. I'm a big guy and my name is Mike can I sue little guys who post with my name? The only thing I think should be labeled differently is Porn sites. They should only be aloud .xxx and if they own a .com it should link to their .xxx only with no more then an "R" rated picture. I only bring that up so because I shouldn't be able to visit an unwanted porn site by fat fingering microsoft or yahoo. IMO

     

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    SoapBox Speaker, Apr 13th, 2010 @ 6:21am

    Who mis-types 5 for o

    Usually a mis-typed URL is off by one letter or with letters transposed. I can't see how o0 or 5 for o is a mis-type.

    Maybe, if there was a link with o0 and I thought it was o I might be fooled; until I saw the $14K exercise machine and realize I didn't go to the correct site.

    Registering possible mis-typed domains is different than domain squatting. If I have a company ZXY selling wiggets and someone registers ZXY.com/.net/.biz, and they don't have a company named ZXY, but are advertising wiggets on the site(s), they are domain squatting. If they are ZXY Ice Cream Cakes however, they are not domain squatting and I should have been faster at registering the domain I wanted.

    Trademark and domain are different and the Internet have made the lines blurry. In trademark, two companies can have the same name as long as there is no confusion between the two. You can have Nissan Computers and Nissan Autos (Internet famous domain squatting case - look it up) but you can only have ONE nissan.com registered domain. So we get nissanusa.com for the US Nissan auto dealer. Look at nissanauto.com for a typical case of domain squatting.

    The problem is, if companies don't go after domain squatters, registrars don't enforce the domain squatting laws and Google (and other SE's) didn't make such sites profitable, there would be no incentive to domain squat.

     

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    Computer guy, Apr 13th, 2010 @ 7:04am

    Re:

    just begs the question about many times MS squatted on someone elses idea and were forced to pay up.

     

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    David Johnson (profile), Apr 13th, 2010 @ 8:39am

    it's always too easy to pick apart an argument

    "Likening mistyped domains to prime real estate, Temme equates the practice to buying 'some property next to Disneyland.'"

    The trouble is that it's like opening a gym next door and putting up an equally sized, shaped, colored, etc. sign that says "D1sneyland" even though it's "Carl's Gym" but putting it a mile off the road so you don't know until you drive up on it that there is no magic and fairy dust just smelly dudes.

     

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    Nastybutler77 (profile), Apr 13th, 2010 @ 11:15am

    Probably shouldn't say anything, but...

    My parents bought one of those machines for $14K. They swear by the thing, but I still can't see how you can spend more on an exercise machine than some people spend on their car.

    I'll have to ask them if they found the website by misspelling hotmail.com.

     

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    identicon
    alina orozco, Apr 13th, 2010 @ 11:17am

    hacker for hire

    i hired a hacker to find out if my husband is cheating me. he hacked the email and gave me evidence that my husband is a real pain in my ***. i can recommend to you his email. his email is hacker4hire@hackermail.com

     

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