Huge Settlement Upheld in Verizon Domain Squatting Case

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A federal court in Northern California had ordered a cybersquatter, OnlineNIC, to pay $33.15 million in damages to Verizon in December, 2008. The award was made in a default judgment after OnlineNIC employees eluded all attempts to summon them to court. OnlineNIC had registered more than 600 domains that contained Verizon's name and trademarks. It earned money through ads hosted on these domains, which appeared to be associated with Verizon.

The cybersquatter finally appeared before the court in February 2009. It filed a motion to set aside the default judgment. The burden of OnlineNIC’s argument was that the damages awarded by the court gave an exaggerated account of the harm its activities had caused to Verizon. It claimed to have only earned a trivial sum of $1,468.60 in profit from the 663 Verizon-related domains at issue. On August 25, the court upheld the default order while dismissing OnlineNIC’s arguments.

"OnlineNIC's reference to its alleged profit fails to take any account of the damages suffered by Verizon in the form of a likelihood of confusion surrounding Verizon's marks and the diversion of internet traffic to websites selling rival products," Judge Jeremy Fogel wrote in his verdict, making it clear that harm caused to Verizon should not be confused with OnlineNIC’s profit.

Image Credit: Phatrat92 (Photobucket)

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