Register.com Wins Stay Against Domain Reseller

In a case of deceptive marketing, Register.com scored a victory Monday
after a district court issued a stay against reseller Domain Registry of America from committing
any acts likely to dupe Register.com customers into erroneously thinking the
Domain Registry of America is their registrar.


The issue, commonly known as “domain slamming,” had New York’s Register.com
infuriated that the Canadian domain name reseller was piggybacking, or
trading off of, its name, and now the United States District Court for the
Southern District of New York has agreed the Domain Registry of America was
engaging in deceptive marketing practices. The court also enjoined Domain
Registry of America from making representations which are calculated or
likely to lead customers to believe that the company was affiliated with
Register.com.


The term “domain slamming” is borrowed from an aggressive tactic used by phone
carriers to persuade subscribers to transfer their service without realizing
they are doing so, a trend that is prompting ISPs to warn clients to read
invoices carefully before paying the annual fees for registering their Web
sites.


Register.com CEO Richard Forman was pleased with the ruling, saying in a company statement that: “We see the court’s
decision today as a victory for our customers, who were the victims of
Domain Registry of America’s deceptive marketing tactics. “We hope that this
outcome sends a clear message to those who attempt to trade off of
Register.com’s brand and reputation.”


Register.com filed suit in
August 2002, alleging the Domain Registry of America used deceptive
marketing tactics, including misusing the Register.com name and trademark
and employing misleading marketing materials to confuse Register.com
customers into believing they were renewing their domain names with
Register.com, when they were actually transferring their domain names to
Domain Registry of America.


The complaint also alleged the use of misleading and deceptive e-mails, Web
pages, and misrepresentations by Domain Registry of America customer service
workers.


The deceptive marketing case wasn’t the first such allegation the Domain
Registry of America has been accused of, according to presiding Judge Naomi
Reice Buchwald, who noted the concern’s executives had been previously
convicted of various unlawful activities, and went on to state that the
company’s deceptive tactics were “neither accidental nor innocuous, but
calculated and intended to confuse and mislead consumers.”


Officially, Judge Buchwald mandated Domain Registry of America is enjoined from
the following activities: committing any act which is calculated to or
likely to cause third parties to believe that Domain Registry of America is
their existing Internet domain name registrar or registration provider when
it isn’t; and committing any act which is calculated to or likely to cause
third parties to believe that Domain Registry of America and/or Domain
Registry of America’s services are sponsored by, affiliated with, assisting,
or have the endorsement or approval of Register.com.


To be sure, such scams are common in the cutthroat domain name and registrar
business, where firms are seeking to lure more customers to their services.
Evidence of trickery exists many places on the Web, where businesses who feel they have been unlawfully treated post alleged false notices as warnings.


Even the U.S. government has gotten involved, as the Federal Trade Commission went after VeriSign in August for similar deceptive marketing practices. That inquiry stemmed from a campaign launched this spring that saw VeriSign allegedly sending direct mail to the users of rival registrars.


At issue is the way customer information is acquired and the Whois directory, which provides domain-name customer data. Almost anyone can use a Whois directory to find out the registrar attached to a particular domain name and the domain-name owner’s name, physical and e-mail address, and phone number. Using that information for spamming is prohibited, but registrars are required to sell that information to competitors, who are allowed to use it for marketing purposes.

News Around the Web