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07 Dec 2008

Dell's Anti-Tasting Suit ICANN

Dell filed a suit in Florida in early October against a nest of domain tasters in Miami, widely reported in the press last week. The suit was just unsealed, after giving the court time to approve a restraining order and serve it on the defendants. The primary defendant is a Miami resident named Juan Vasquez, doing business as several registrars called BelgiumDomains, CapitolDomains, and DomainDoorman, as well as a whole bunch of tiny companies of unknown authenticity in the Bahamas, various small Caribbean islands, Panama, Argentina, and even Indian Ocean tax haven Mauritius.

Those registrars have an egregious history of domain churning. I gave a talk on domain tasting at MAAWG in October in which I picked out the registrars who churned the most domains from the May registrar reports, and those three were the worst, each having registered about 500,000 domains, refunded over 10 million (presumably from the last few days of the prior month) and kept only 23,000. In his blog entry on the suit, Jay Westerdal estimated that those registrars were responsible for 185 million of the 255 million domains tasted in the past six months. The total number of domains in .COM is about 70 million, so that's a lot of tasting.

Dell's suit is a straightforward trademark suit, arguing that several thousand of Vasquez' domains infringed Dell's trademarks on Dell and on Alienware, their gaming computer subsidiary which happens by coincidence also to be in Miami. In the most recent case filing on the 29th, Vasquez says he won't fight the restraining order. The evidence is overwhelming so there's no way he can win this suit, leading to some interesting questions about what his plans are.

If he were planning to flee, he'd be gone already. He lives in a house (see picture) in a not particularly fancy part of Miami, and his wife answered the door when the marshals served the complaint, which suggests that someone else is funding this venture. (Domain tasting is capital intensive, since you need enough money on deposit with the registries for all the domains you're tasting, which in this case would be several million dollars.) Will he take the fall for the funders? Cut a deal in exchange for testimony? Something else?

Also, it's interesting to note what other parties are and are not named in this suit. Verisign is mentioned in passing in the request for a restraining order, to have them freeze the defendants' domains so they can't refund them and obscure the evidence, which Verisign presumably did.

ICANN is not mentioned at all. Since domain tasting and kiting exist solely because of Add Grace Period language added to the registrar agreement a few years ago that has (debatably) little other use, and ICANN is aware of tasting since there has been extensive discussion about it at recent meetings, they clearly are an interested party, and it's reasonable to assume that even if these particular registrars are shut down, new tasting registrars will pop up other places, most likely outside the U.S., enabled by the language in ICANN's registrar agreement. They weren't named in this suit, but I'd be surprised if they avoided the next one.

  posted at: 10:12 :: permanent link to this entry :: 0 comments
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