Verizon awarded millions in cyber squatting case

Ruling could prompt US exodus.

Cyber squatters were sent a clear warning yesterday after a US federal court upheld a $33m ($39.3m) ruling against a company accused of registering and monetising web addresses relating to communications giant Verizon.

OnlineNIC was found guilty of registering numerous sites, such as verizononline.com and accountverizonwireless.com, which the judge ruled had infringed Verizon's trademarks.

As is the case with most cyber squatting incidents, OnlineNIC 'parked' advertising on the sites, hoping to drive revenue via click-throughs from unsuspecting users who thought they were going to an official Verizon site.

Verizon is calling the case "the largest cyber squatting judgement ever" despite the fact that it is unlikely to recoup much in the way of damages from OnlineNIC.

However, Philip Carnell, technology lawyer at City law firm CMS Cameron McKenna, argued that the decision could "send shockwaves through the secondary domain name market" and force cyber squatters to relocate outside the US.

"Domain names are truly global in nature, in particular generic top-level domains such as .com, and we may find that, in the light of this decision, brand owners will have to deal more and more with infringing domain names registered to companies based in more obscure jurisdictions," he said.

"Where local court action is not possible, or would not be cost effective, this would require brand owners to place a greater reliance on arbitration action, for example under the Uniform Domain Name Dispute Resolution Policy."

While this avenue is a cheaper and more effective way of recovering small numbers of domains from cyber squatters, it offers no opportunity of recovering damages, Carnell warned.