Retailer Land's End will get a trial in its case against defendants accused of profiting from the company's online affiliate program through a scheme that gave "typosquatting" a new twist.
What is Typosquatting?
"Typosquatting" is the practice of registering misspellings of famous trademarks as domain names. Most typosquatters do this to divert Internet users who are seeking the trademark owner's Web site or to attempt to sell the domain name to the trademark owner.
In this case, though, the defendants sent users to the real Land's End site, but only after funneling them through "affiliate" sites so that the defendants could collect commissions on any purchases the users made from the Land's End site.
The Anticybersquatting Consumer Protection Act
Land's End filed the suit in the U.S. District Court for the Western District of Wisconsin against Thinkspin Inc., Braderax Inc. and Michael Seale, alleging cybersquatting, fraud and breach of contract.
A fourth defendant, Eric Remy, is also named, but he was not involved in the motions that led to the current court ruling.
The suit alleges violations of the federal Anticybersquatting Consumer Protection Act, false advertising in violation of federal and state law, fraud, and breach of contract.
The ACPA prohibits registration of another's trademark as a domain name if it is done with "bad faith" intent to profit. Typosquatting falls within the ACPA.
Defendants' Alleged "Misspelling" Scheme
According to the complaint, the defendants applied for and were accepted into the Land's End affiliate program, which allows Web site owners to post links on their sites to the Land's End Web site. When an Internet user reaches the Land's End site through the link on the affiliate site and makes a purchase, the affiliate gets a commission on that sale.
According to the complaint, the defendants claimed to operate several Web sites —savingsfinder.com, poshshops.com and shoppersguide.com — that attracted hundreds of thousands of visitors every month. The defendants told Land's End that these sites would contain the links to landsend.com.
However, the retailer alleges, the defendants failed to disclose that they had also registered as domain names dozens of misspellings of the Land's End trademark. When Internet users typed in one of those misspellings, they would appear to be taken directly to the real Land's End site.
According to the complaint, the user's request was really funneled through one of the three "legitimate" affiliate sites so that the defendants could increase their commissions.
The defendants moved for summary judgment on all claims, asking the court to rule in their favor without a full trial.
U.S. District Judge Barbara B. Crabb denied the motion with respect to the cybersquatting, fraud and breach-of-contract claims, saying Land's End had presented enough evidence for a jury to find in its favor on these allegations.
The defendants argued they should not be held liable because their scheme actually helped Land's End by sending more people to the retailer's real Web site. Without the defendants' setup, they argued, people who mistyped the landsend.com address would likely have given up and gone elsewhere.
Judge Crabb called that argument "specious at best" and said most people would have noticed their mistake and typed the correct address.
The judge did grant summary judgment to the defendants on the false-advertising allegations. Those claims fail, she said, because they require public dissemination of the alleged falsehood, and the defendants here concealed their scheme.
Land's End Inc. v. Remy et al., No. 05-C-368-C, 2006 WL 2521321 (W.D. Wis. Sept. 1, 2006).
Computer & Internet Litigation Reporter
Volume 24, Issue 08