New York state passes new anti-cybersquatting law

The Domain Names Cyber Piracy Protections Act, which was sponsored by Senator Betty Little, came into effect in the state of New York in late November 2007. The law is aimed at preventing a person from registering a domain name that is similar or identical to the name of another living person with the specific intent to profit from selling the domain name to that person or a third party.

The new law is quite narrow in scope. First, it applies only when a domain name has been registered with the specific intent of selling it for a profit, and does not seem to cover the situation where such intent is not present at the time of registration but may develop later on (although the actual wording of the law is quite ambiguous). In addition, sale potential is only part of the reason why unscrupulous third parties may wish to acquire a domain name. Making money by pointing a domain name to a website containing 'click-through' links is equally tempting, if not more so, than trying to sell a domain name for profit to its rightful owner. This is particularly so as many legitimate individuals or entities would prefer to recuperate a domain name using the Uniform Domain Name Dispute Resolution Policy rather than handing over money to a cybersquatter.

Secondly, it has been argued that honest registrants which register domain names containing individual names for the purposes of criticism websites may accidentally fall foul of the law should they wish to sell their domain name, which could thus have a negative effect on free speech. Certain critics have commented on the fact that the law may have been motivated by aggrieved politicians, given the number of politicians who suffer from 'name-jacking' - including Little herself, given that 'bettylittle.com' appears to have been registered by a third party.

Thirdly, in a provision that parallels the federal law, the new law appears to limit the power of the courts over registrars, registries and other domain name authorities to those located within the state of New York. Thus, by avoiding New York-based registrars (eg, 'register.com') or certain top-level domain registries, would-be cybersquatters may make it more difficult for affected parties to use the New York law. Incidentally, the registry for '.com', '.net', '.cc' and '.tv' is Verisign Inc, which is based in California. This limitation does not appear to affect the traditional jurisdictional analysis when it comes to violations by the cybersquatters themselves if, for example, they act in New York, cause harm felt in New York or have regular business dealings with New York.

In addition to injunctive relief, the courts may fine the person or entity that registered a domain name in violation of the law $1,000 for each day that the violation occurs. The courts may also order the transfer of the domain name as part of the relief awarded. However, the registrar, domain name registry or other domain name registration authority will not be liable for injunctive or monetary relief except in the case of bad faith or reckless disregard, which includes a wilful failure to comply with any court order.

Other states such as California have already introduced anti-cybersquatting laws, and additional states are considering introducing them, even though the United States has already introduced a comprehensive federal law, the Anti-cybersquatting Consumer Protection Act 1999.

Hillel Parness and Jane Seager, Lovells LLP, New York and Paris