Google has become a well known name in the world of IP lawsuits. Just before Google got a chance to settle the huge lawsuit over ‘book scanning’, it was faced with yet another one. This recent lawsuit comes from the marketing professor at the Harvard School of Business, Benjamin G. Edelman, who is suing with regards to Google’s profit making strategies in the field of typosquatting.
So what is typosquatting? Typosquatting is the practice of registering domain names that are typographical variants of the names of real companies’ websites. Such a URL usually falls under one of the following categories:
- A common misspelling, or foreign language spelling, of the intended site: exemple.com
- A misspelling based on typing errors: xample.com or examlpe.com
- A differently phrased domain name: examples.com
- A different top-level domain: example.org
Typical typosquatting methods include “mousetrapping” and “redirecting”. Mousetrapping refers to the phenomenon where the visit to the mistyped domain name prevents the user form escaping the website. Redirecting refers to taking users to a competitor’s website and exposing the users to competitive brands or opposing ideas. Professor Edelman, in his recently published study with McAfee, found more than 80,000 domains typosquatting on the top 2,000 websites. The top ten websites targeted by typosquatters include freecreditreport.com, cartoonnetwork.com, youtube.com, craigslist.org, blogspot.com etc.
One might wonder what kinds of profits are possible from such seemingly unimportant and insignificant activity. Kelly M. Slavitt of Thelen Reid Brown Raysman & Steiner LLP gives a good indication of the extremely profitable side of typosquatting in her article Protecting Your Intellectual Property from Domain Name Typosquatters. Users clicking on advertisements create profit for web site owners (who are paid by the advertisers). Typically, the benefit is 10-25 cents for each ad click. Mousetrapping can lead to even greater profits since it’s usually a multiple number of clicks later that a user realizes he is trapped and exits the site by closing the browser. With respect to Google, the accusation is that the advertiser pays Google whenever someone clicks on the Google supplied advertisement on one of these typosquatting sites. In Professor Edelman’s words, Google and typosquatting companies are profiting from the misuse of other companies’ trademark. According to him, Google has potentially been grossing revenue of 32 to 50 million dollars owing to its millions of domains.
Google was faced with a typosquatting related lawsuit earlier this year as well. That time it was attorney Hal Levitte, Google’s customer from June 1, 2007 through August 18, 2007, who accused Google of unjustly enriching itself from profiting from typo domains. Google’s practise of putting ads on error sites and parked domains, resulted in Levitte spending almost 15.3 % of his ad campaign on law quality ad placements. Levitte pointed out that while promising high-quality ad placements, Google resorted to placing the ads in a variety of low quality sites. After March 2008, Google provided a way for advertisers to opt out of error sites and parked domains, but according to Levitte, the provisions are not apparent to advertisers.
In contrast with the Levitte suit, the lawsuit by Edelman focuses on the exploitation of existing trademarks by Google and companies engaging in typosquatting. Google, by placing ads on these sites using Google AdSense, makes money for the squatters and itself when users enter the web sites by mistake. Under the 1999 Anti-cybersquatting Consumer Protection Act, 15 U.S.C. sec. 1125(d) typosquatting is illegal and the law prohibits registering or using domain names that are confusingly similar to a trademark or a famous name. It is commendable that Professor Edelman is bringing such issues to the surface. At the same time, one has to consider carefully what (and why) Google should be legally liable for (some thought provoking questions are posted on Slaw here).
I have suffered the inconveniences associated with typosquatting on occasion and I do sympathize with Prof. Edelman. However, I am more persuaded by the perspectives posted on the Slaw website. The writer there queries whether Google should be asked to consider questions of trade mark law and I think this is a legitimate question. As a business in the free market, at what point should Google be required to consider the legal liabilities of a website where it places ads? With respect to the Levitte lawsuit, I understand Google was promising a product of a certain quality, while delivering a lower one. In that regard, consumers were arguably being misled. But the Edelman lawsuit seems different: Google doesn’t appear to be “exploiting” a trademark in a morally-blameworthy sense. It is just treating all domain names the same when they apply for Google ads.
Jonathan, you do make an interesting point about where the line should be drawn in terms of Google considering the legal liability of a website where it places ads.
The Edelman report at (http://www.mcafee.com/us/local_content/misc/threat_center/msj_unintended_adventures_browsing.pdf)
indicates that “typosquatters sell their inventory to ad networks, which in turn recruit advertisers, and the largest network in this space is Google, whose AdSense for Domains product and other domain-syndication products serve ads on more than 80 percent of the typosquatting sites recently uncovered by SiteAdvisor technology.” This indicates to me how typsquatting business is really hugely dependent on Google.
Although it doesn’t appear that Google is ‘exploiting’ a trademark per se, I believe that by supporting typosquatters in ‘capitalizing’ on registered trademarks by registering domain names that are variants of popular websites is not morally correct either. Also, one of the major concerns of typosquatting is the redirecting of traffic to porn sites, the ramifications of which do not need any explanation. Edelman’s report also says that if Google ceases the funding of typosquatters, the typosquatting activities may decrease since no other ad network is likely to pay them as much as Google does. In this regard, I do believe that Google ought to be liable. At the end of the day, while it is commendable how Google identified a profitable business option to profit from common spelling mistakes, the moral blameworthiness and fault, and the degree of liability on Google is really open to perception.
Typosquatting has been around since long before Google Adwords and will continue long after Google is knocked out of the game. Other advertising solutions will take it’s place just as Google has taken the place of previous solutions.
If Google should be liable for placing ads on these sites, should registrars be liable for allowing these url’s to be registered in the first place? What about the advertisers themselves whose ads end up on these pages? What about the web hosts? The list goes on and on.
Google is likely being targeted because a) they have deep pockets and can pay; and b) they are more easily identifiable and easier to sue. However the person doing the greater wrong is clearly the typosquatter – shouldn’t we really be looking at ways to encourage parties to go after them instead?
While we can’t really change (a), this does raise the ongoing debate of how we should make reforms to tackle (b), to make domain name owners easier to identify, locate and sue?
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