Key Senate Panel Approves Leahy Legislation To Crack Down On Web Site Address Thieves

July 30, 1999

WASHINGTON (July 30) -- A key Senate panel Thursday approved legislation co-authored by Sen. Patrick Leahy that would help protect the online trademarks of merchants and consumers from Web site address thieves -- so-called "cybersquatters."

Cybersquatters purposely register website addresses identical or confusingly similar to a company's trademark to divert business, confuse customers or stymie a company's ability to establish an easy-to-find online location. A recent report by an international intellectual property organization characterized cybersquatting as a "predatory and parasitical practices by a minority of domain registrants acting in bad faith."

Internet commerce is a burgeoning field, particularly in Vermont, as a recent report commissioned by Leahy attests. But one obstacle identified in the report to achieving the full potential offered by Internet commerce is that "merchants are anxious about not being able to control whether their names and brands are being displayed." One reason online merchants remain concerned are so-called "cybersquatters" or "cybyerpirates" who register Web site addresses (known as domain names) similar to a company's trademark to intentionally defraud the firm or confuse customers.

Aiming to crack down on those "cybersquatters," Leahy and several others senators authored the "Domain Name Piracy Prevention Act," which was introduced on Thursday. The Senate Judiciary Committee unanimously approved Leahy's alternative bill, which was offered as an amendment to similar pending legislation originally introduced by Spencer Abraham, R-Mich., and others. Leahy, who has long supported strengthening online trademark laws, had voiced concerns that the Abraham legislation would hurt rather than foster electronic commerce and trample First Amendment rights online. Working with Sen. Orrin Hatch, R-Utah, and others, Leahy won unanimous Judiciary Committee approval of the alternative bill on Thursday. The revised legislation would hold anyone liable for civil damages (no less than $1,000 and up to $100,000 per domain name, as determined by a court) due to a bad-faith intent to profit from an online trademark by registering or trafficking in a domain name that is identical or similar to -- or dilutive of -- that trademark.

"Internet commerce is thriving in Vermont, but to truly open the on-line flood gates, merchants must know that their Internet trademarks are safe from these cybersquatters," said Leahy, the Democratic Leader of the Judiciary Committee. "This bill brings a measure of order to the Internet frontier."

Leahy cited the example of the legitimate Web site, www.BenJerry.com. A cybersquatter could intentionally and maliciously register a similar Web site address -- for example, www.BenandJerry.com -- having nothing to do with the real company but designed to deliberately mislead, defraud or confuse honest Web surfers who are looking for online information about the Vermont ice cream company. The legislation approved yesterday would allow the owners of the real Ben & Jerry's to sue the "cybersquatter" for civil damages due to trademark infringement or for suspension of the fraudulent Web site.