Congress Okays Hatch-Leahy Bill To Crack Down On Web Site Address Thieves

November 18, 1999

WASHINGTON (November 18) -- Congress has given its final approval to 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." The anti-cybersquatting legislation was included in the final budget bill approved by the House today and expected to be cleared by the Senate in the next few days.

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 thriving 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 Sen. Orrin Hatch (R-Utah) authored the "Domain Name Piracy Prevention Act," which was introduced in July. The Senate Judiciary Committee approved the Hatch-Leahy alternative bill, which was offered as an amendment to similar pending legislation originally introduced by Sen. 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.

The bill 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 a burgeoning field, 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 arms on-line merchants and consumers with new tools to derail these ‘squatters' who try to create bad waves for honest cybersurfers."

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 Hatch-Leahy 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.