Confusing New Law on Domain Names in New York State

By Mike Maddaloni on Sunday, August 12, 2007 at 06:24 PM with 1 comments

New York State sealA new law signed on August 1 in New York State will surely lead to much confusion, and much profiting by the attorneys who have to spend their clients’ money to understand and see if this law holds up.

Note that I am not a lawyer nor do I play one on YouTube. Please read the text of the law on the State Of New York’s Web site and search on bill S3814-B. More information is available from the Web site of New York State Senator Betty Little who sponsored the legislation, and the news report the bill is now law.

As I have talked about before, there is a process for registering and disputing the ownership of domain names. There is cybersquatting, where a person registers a domain name of a person, business or entity with the intent to profit from it. Then there are people who buy domain names comprised of generic terms that are descriptive of a product or service, and could apply to an entire industry segment. As a domain name has value and if a registrant decides to sell it, who is to say they cannot?

The New York law appears to offer an avenue around the ICANN process for disputing domain name ownership. This also imposes cash penalties of $1,000.00 a day! But where the law is confusing is in its opening language:

“Relates to cyber piracy protections and the unlawful registration of domain names; prohibits the registration of a domain name that consists of the name of another living person, or a name substantially and confusingly similar thereto, without that person's consent, with the specific intent to profit from such name by selling the domain name for financial gain to that person or any third party; provides for injunctive relief and other civil remedies.”

What defines intent to profit? What if I hold a domain name and do not sell it, or develop a Web site around it or simply park it – who is to determine intent?

Here’s a potential example – say I buy every possible domain name around my name, including misspellings. I may decide to sell some of them, perhaps some of the less desirable top-level domains like .ws. If there is another person with the same name as myself, can they then sue me under this law? And can they sue for the .com name and not the .ws I want to sell? Yes, there are other people out there named Mike Maddaloni, and I am sure Betty Little as well.

It is also murky as to jurisdiction of this law. What if the registrant and domain name registrar are not based in New York? Needless to say, I have warned my clients and colleagues in New York State about the potential issues with this law.

Again, I am not a lawyer, and with all legal matters you should consult one. If you don’t have one – get one. Especially if you are worried about New Yorkers suing you within a few months.

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