Internet tactics raise concern.
Broker David Brimlow worked many nights and weekends over several months to design and develop his own general real estate web site, which he expected to call brimlow.com, along with a proprietary office leasing service he called Predator '99.
Since December, in fact, he ran ads to alert both the industry and potential clients that his web sites were coming. But at the end of March, when he finally finished designing and asked his web service to upload the web sites, they informed him the Internet domain names had already been taken.
But to his chagrin, not only had the names and several variations been registered, they had been registered by another New York office leasing broker, Jeffrey Landers.
Stunned, Brimlow called Landers, and was allegedly told I'm not giving you your name back.'"
Landers told REW he has registered more than 500 sites, including his main site, offices2share.com, and the more generic longislandrealestate.com and findofficespace.com - some of which he may or may not use in the future.
As for the sites "brimlowrealty," "brimlow," "brimlowrealtycorp," "Predator99," "Predator 1999," "Predator2000" and others that were similarly worded, which he has also registered, Landers said he does not intend to necessarily use the names, but is simply trying to make it more difficult for a competitor to benefit from the otherwise easily accessible and lucrative Internet marketplace.
"I'm creating a barrier for entry," Landers explained, determined to fend off competition. In an analogy also used by his attorney Debra Kelly, Landers described a prime retail site that would be perfect for use as a real estate office.
"If I get there first and rent it, Brimlow can't rent it," Landers said of both the Internet and real office sites.
Kelly, a partner with Povich Kelly/Associates, which provides legal and business solutions for technology, media and digital communications companies, said Internet domain names such as those that end in .com, .net and .org, are
registered on a "first-come, first-served" basis.
What Landers is not doing, however, is trying to sell back the domain names. "If you want to register domain names and hold them for ransom, you are taking a [legal] risk," said Kelly. "We're not taking that risk. We are not holding [them] for ransom."
She likened Landers to a ticket buyer who doesn't try to scalp or sell them, but simply holds them and doesn't use them.
"Jeff has paid to take a domain name off the market. It's a defensive measure and the court does not recognize that as improper," she said, adding she believes any case brought on that point "would be thrown out because there is no legal issue."
Situations that involve ownership of domain names are not unusual in the business world, and there is already a body of case law developing around so-called Internet domain name hijackers and pirates.
Kelly says there is a tremendous amount of debate that has been ongoing since about 1995, when graphics were first introduced to the Internet and domain names became an asset that people recognized had value.
"This debate rages between trademark owners and organizations that represent trademark owners, and non-trademark owners and registrants of names that include words that are included in trademarks owned by others," she said.
Last week, a group of real estate service companies purchased the domain RealEstate.com from a Columbia, SC realtor for an undisclosed price. RESICOM Analytic, which is changing its name to Property Analysis, MortgageAuction.com and Equitran.com, will provide maps, demographics, equity analysis and other features. They are also creating business partnerships with real estate service providers, including LoanWorks.com, CyberHomes.com and Homes.com, to provide listings and take advantage of the valuable first shot at real estate buyers.
So-called "cyber squatters" and "cyber pirates" typically hold domain names for ransom with the expectation that they will receive some benefit in exchange for the trade or sale of name, Kelly explained.
But while a cyber squatter says "I will give it to you, but I will charge you a premium over what I paid," Kelly explained, "The pirate takes it, and knows there is a trademark owner out there who will eventually discover they don't have easy access to that domain name."
The pirate's game, however, is "just to infuriate the trademark owner."
Kelly said the law recognizes "through a narrow group of cases" that the domain name registrant will have to give the name to the trademark owner.
Several of these cases involve an individual that the courts dubbed a "domain name hijacker," who registered domain names incorporating the trademarks and trade names of many companies in an apparent effort to profit from re-selling the registrations.
Peter Brown, a partner with Brown Rayman Millstein Felder & Steiner, a firm that represents real estate clients and has an active intellectual property practice, litigated at least two of the cases, American Standard, Inc. v. Toeppen, and Panavision v. Toeppen, and also helped Equitable get equitable.com.
"The prerequisite for winning one of these is to obtain a registered trademark," said Brown.
"In general, trademark protection will help," agreed Kelly, "but courts are only forcing domain name registrants to transfer domain names to trademark owners in cases where they are cyber pirates and cyber squatters."
In his corner, Brimlow does have a trademark pending for Predator '99, and is looking into his legal options.
There is also at least one case, Juno Online Services v. Juno Lighting Inc., pitting a trademark owner in one kind of business against a trademark owner in another kind of business, both fighting over juno.com.
The Juno Lighting Co. had an older trademark, and recognizing juno.com's value to the online service, allegedly attempted to "reverse hijack" the juno.com domain by claiming an earlier mark and asking that the online service's domain name be cancelled and awarded to them.
They were eventually paid off and went away, but not before another court ruled the use of a domain name does not, in and of itself, satisfy the Lanham Act's requirement that a trademark be used in interstate commerce.
That would mean having a web site and even advertising in a local community paper alone may not be enough to obtain a trademark.
Brimlow advertises in several real estate publications, including Real Estate Weekly, which is sent by subscription to many states, and in national editions of at least one New York daily.
He has learned a lesson too late, but wanted to make sure others don't make the same mistake. "Don't advertise your web name before you own it," he advised.
Brown said even if you don't own the trademark, but you have a "weil-established" business name, "you still may win, but it's a more complicated issue."
The arguments would then entail "the likelihood of confusion," and if there was "a confusion of source."
Landers, however, says he does not intend to have a web surfer that clicks to brimlow .com, for instance, to be diverted to one of Lander's own active web sites.
Actually, those clicking to the brimlow.com site will find a web page with wording that says the site is coming, but is in effect really an ad for the Internet company that reserved the domain name for Landers.
"I'm not using the name. All I've done is taken it off the table," said Landers, who is very conscious of the legal issues. "I'm not attempting to operate under his [Brimlow's] name or confuse the public."
In a matter that alleges confusion by Internet users, Credit.com, a partner with Mortgage.com, is requesting an injunction, lost profits and damages of $1 million against CreditComm Holdings, a unit of Loeb Holdings, which uses the domain site creditcomm.com. They both offer credit-related services. That suit was filed in a California Federal District Court.
Another issue that Kelly said could enlist "hours of conversation" has to do with whether or not a domain name is property.
The domain name has been thought of simply as a two-year license granted by Network Solutions, which operates the top domain name registry in the United States. But in a proceeding begun after Umbro vs. 3263851 Canada Inc., a Federal Court recently ruled domain names are property, and allowed the plaintiff to obtain rights to 27 domain names owned by the defendant. Here, the Canadian company had registered Umbro.com, but didn't appear to contest the claim by the trademark holder. This triggered a default judgement, and while the judge granted the domain name and $25,000 in damages, there were no U.S. assets to attach.
Umbro then looked to Network Solutions in a garnishment proceeding, and obtained the rights to the domain names, just as if they were property that could be seized.
Although he doesn't know if he will get the use of his surname and company name back for use in cyberspace, Brimlow also expects to file a complaint with the New York State Secretary of State, which is the licensing body for real estate salespersons and brokers.
"I'm very ethical," Landers insisted. "What I did on my part was good business judgement. I saw a competitor coming and threw up a roadblock."
He also noted that someone has already registered landers.com, and that a surname was no different than any other business name.
Kelly said she could register weiss.com, or take a vanity license plate with that name, but since there are "100,000 other Weiss's" why should one Weiss be entitled to get the name or the license plate "over the other 99,999?"
Although neither of the brokers in this matter is a current member of the Real Estate Board of New York (REBNY), that industry group has its own Code of Ethics. Its rules, however, are something that only members are bound to follow. Those rules, along with various real estate-related laws and regulations, are printed in the back of the yearly diary and worth a reading - for the first time, or as a refresher.
The REBNY Code includes provisions that "Members... abide by... all applicable federal, state and municipal laws and regulations; follow the highest moral and ethical standards of courtesy, integrity, proficiency, professionalism and honesty... and seek no unfair advantage over other Members and conduct their business so as to avoid controversies with other Members."
"No one has brought a complaint to the Ethics Committee yet on an Internet issue," said Warren Wechsler, first senior vice president. While they don't have an Internet Committee, he said "after this call," one may have to be formed.
Earlier in March, REW uncovered an Internet advertising situation in which one REBNY member played off another's web ad. That event took place on the gabrielsrex.com web site and involved two "click through" ads, i.e. small ads that could be 'clicked on' with the viewer's mouse pointer and would then take the clicker directly to that company's own web site.
In one such ad banner, placed in the top right corner of the web page, Barbara Corcoran is depicted with a milk mustache and the phrase "Got Rentals?" appears. This ad changes every few seconds to simply the words "The Corcoran Group."
One day, the ad beneath Corcoran became a photo of a competitor, Citi Habitat's Andrew Heiberger. In the picture he is lifting a full glass of milk, and it is tagged with the words "Yes we do."
Within hours, sources said the host site, Gabriel's Guides, which publishes yearly paper updates of buildings for apartment renters and buyers, got a tongue-lashing from Corcoran, and the Citi Habitat ad was banished.
The competitor's parody simply wasn't a joke to the Corcoran Group.
There are other pitfalls brokers have discovered when researching the availability of web domain names.
Jonathan Rudes, a vice president of Newmark, is actively involved in creating and leasing office space for web companies, and is an enterprising web spinner when it comes to luring these small and growing businesses.
When Rudes researched web site names that were takeoffs on Silicon Alley, he discovered a pornographer had been as equally creative. "If I used siliconcity.net, but they had siliconcity.com, my customers could accidently end up at the porn site," he recalled.
Rather than worrying about confusing or embarrassing his customers, he dropped the idea of using that domain.
Until recently, the ending .org had been reserved for organizations and not-for-profits, but the crunch for web names has caused that rule to change. Soon more top domain names ending with .bus, for instance, will be made available through several new competing registries.
Additionally, many service and web hosting companies can register names for your company with the primary top domain registry held by Network Solutions. Be aware that other countries also have different top level domain endings. A two-year registration will cost up to about $250, depending on the services offered by the company, and if the site will be hosted or merely reserved for later usage.
"If you go to the registry sites, they will tell you to buy .net and .org to protect yourself," said Landers, who advises also buying any new primary domain names as they become available.
"As soon as there are additional top level domain names, the supply and the demand will increase," said Kelly. "I have seen businesses regret that they haven't done it years earlier."
Network Solutions can be reached by phone at (888) 642-4675 and (703) 742- 4884, or on the net at network-solutions.com.
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|Title Annotation:||strategy of reserving several domain names to make it harder for competitors to use the Internet|
|Publication:||Real Estate Weekly|
|Date:||Apr 7, 1999|
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