Debunking the Million Dollar Typo

WaPo ran an article yesterday on typosquatting implying that Google is improperly profiting from running ads on parked domains. The article leads with:

Google Inc., which runs the largest ad network on the Internet, is making millions of dollars a year by filling otherwise unused Web sites with ads. In many instances, these ad-filled pages appear when users mistype an Internet address, such as "BistBuy.com."

This new form of advertising is turning into a booming business that some say is cluttering the Internet and could be violating trademark rules. It also has sparked a speculative frenzy of investment in domain names, pushing the value of some beyond the $1 million mark.

First off, what WaPo characterizes as a "new form of advertising" isn't all that new. ZDNet reported in-depth on the problem way back in 2000, saying even then the issue wasn't new. Even better, WaPo itself sued a typosquatter who claimed the domain washingtonpos.com back in 2001. Quality control missed this one, which is too bad since the article exudes an alarmist tone and tries to label Google as a nogoodnik for its complicity in this sort of business.

Google, along with its popular AdSense program for websites, also runs AdSense for domains, which provides ads to domain name registrars and large domain name holders, but Google's policy is to not allow web addresses that infringe upon trademarks to use their ad service. What happens is that Google will remove participating parked sites from its AdSense for domains program if a trademark owner complains of a site with a confusingly similar URL. Google defends its policy of leaving it up to URL owners to take the initiative and contact them, rather than investigating these things itself, because close misspellings don't necessarily equate to trademark infringement:

"Unless it is confusing to somebody, trademark law doesn't apply," said Rose Hagan, Google's chief trademark lawyer.

To say that it is Google's job to vet every site on the Internet to determine whether it's confusing people (a) is absurd because of the vagueries of trademark law, (b) would require Google to make a legal determination about every URL, which would negate the benefit of having an algorithm do all the work thus requiring an army of workers to scour the net, and (c) is not required by trademark law.

This is not to say that complaints of typosquatting aren't serious, because they can be, but even WaPo is unsure of the real trouble (which we don't learn until paragraph 10):

Opinion is split on whether these type of ad pages are good or bad. Some say they are nothing more than junk pages that frustrate people. But others, including those who speculate on potential traffic of a specific domain name, argue that the pages are helping people find information related to what they're looking for.

If anything, it is more a problem of who is liable under the law. Or to put it another way: can I sue the Daddy Warbucks that is Google?

I still remember when Whitehouse.com was a porn site whose traffic rivaled that of Whitehouse.gov, but the advertising money angle of this story made me curious. Using the WaPo example of earthlink.com misspellings, I tried the two mentioned in the story: dearthlink.com and rearthlink.com. Both come up page unavailable (Google is capable of flexing its muscles and acting fast to avoid bad publicity and legal troubles I suppose), but warthlink.com (W instead of E is a common typo) comes up showing a parked page running ads by a Google-run service called Oingo (as in Oingo-Boingo I wonder?). Click on any of those ads or type a query in the search bar and Google gets a taste from your slip of the finger.

WaPo quotes Ron Jackson, publisher of DNJournal.com, an online publication that covers the industry, saying that the typosquatting business is good:

"It's like a 24-hour money-printing machine."

Of course it may not be fair that someone who owns thousands of misspelled variations of earthlink.com can make tons of money, but again, the question comes down to whose responsibility is it to deal with the problem. Is it Google, or any other ad server, that should be on the lookout for typosquatters? Or, in this case, should earthlink be the one trolling the Internet for trademark infringers?

Practically speaking, Google has taken the wisest position and the one more in line with the mandates of trademark law. First, a little bit about the law.

Trademark only exists to protect consumers from confusion in the marketplace and, generally speaking, if it doesn't confuse anyone it's not trademark infringement. There are two kinds of confusion at issue in trademark: initial confusion and post-initial confusion. Initial confusion was at issue in Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999) where the court held that it was infringement if another's mark was used in a way that drew traffic to one's own site, despite the fact that once people got there they realized they were not at the site they intended to reach (the case dealt with misleading metatags). The court analogized with Blockbuster putting up a highway sign that said "West Coast Video, Exit 7" when West Coast Video was really at Exit 8 and Blockbuster was at Exit 7. The thinking is that people can figure this out easily enough, but are too lazy to get back on the highway and instead they will just rent at Blockbuster instead of going to West Coast Video as they originally intended. Following this reasoning, it's possible a court could apply Brookfield to typosquatting to say that warthlink.com is capitalizing on earthlink.com's mark.

Post-initial confusion comes into play once a user gets to warthlink.com. Upon arriving at a similarly named site, the nature of that site may lead the consumer to be confused as to who is running the place. If warthlink.com offered Internet service, with links to earthlink.com and other service providers, if it used earthlink's logo, or if it engaged in enough similarly activity as that happening on earthlink.com, then the consumer would be confused at a point after which initial confusion sets in (hence the name). There would definitely be no post-interest confusion when a person visited Whitehouse.com back in the day if they were trying to find out the time of the White House Easter Egg Hunt on Whitehouse.gov. Similarly, there should be little confusion when a person arrives at warthlink.com because it looks like a typical parked site. I would think everyone could recognize one of those, but since 97% of people have trouble spotting spyware, I could see how reasonable (?) minds could differ. Take this test to see if you're in the 97%.

Trademark has a policing element where the owner of a mark must combat infringing uses to preserve the power of their mark. Policing means that the owner of a mark has to prevent others from trading on the good will of the mark through lawsuits under the trademark law or by complaining to ICANN under the Uniform Domain Name Dispute Resolution Policy (UDRP). The danger is that once the public no longer associates a mark with a particular good or service, the mark is considered "abandoned" and anyone can make use of it. This is what happened to Xerox and Kleenex. I used to think it could happen to Google, but I think its foray into areas other than search will ensure that Google is perceived as a unique company and not a generic term for search. Does this happen with typosquatting? Will someone think that warthlink.com is somehow related to earthlink.com and thus confuse them to the point that earthlink.com becomes almost indistinguishable from warthlink.com in the mind of a web surfer? This is highly unlikely, especially when talking about initial confusion. If there is post-initial confusion, however, then the owner of a mark should seriously consider policing the use of that mark to be safe. In this case, earthlink.com may lose traffic, and thus revenue, from the existence of warthlink.com and its extended family, but that doesn't necessarily harm the mark itself. Though it may be an extreme example, it does highlight a weakness in a potential claim.

Intellectual property law is never that easy and in the case of typosquatting the law is complicated by the Anticybersquatting Consumer Protection Act (ACPA) passed in 1999, which basically makes typosquatting illegal. The 3rd Circuit held in Shields v. Zuccarini, 254 F.3d 476 (3d Cir. 2001) that typosquatting violated the ACPA and thus constituted trademark infringement. Mr. John Zuccarini really is a spunky fellow who has had his share of lawsuits over typosquatting, taking a leading role in shaping this area of the law. One key part to the ACPA is that it requires the "bad intent" to profit from a domain name and coming to that determination involves a nine (9!) part test that looks at the person's intent, acts, and purpose in registering, using, and trafficking in a domain name. However, if the purpose of trademark is to reduce customer confusion, it is then easy to tell how the ACPA changes the way we think of trademark rights and how to enforce them.

To throw some more kindling on the fire, the House of Representatives is working on a new trademark bill called "The Trademark Dillution Revision Act" that may or may not erase free speech exceptions to trademark dilution claims. Though different from confusion, stronger dilution laws that favor mark owners would give them more tools to combat potential infringement, just as the ACPA gives mark owners more tools to fight confusion.

So is Google aiding, or at least complicit in trademark infringement by doing business with typosquatters? Who knows. As I've tried to show, it's never all that clear whether a given URL could be considered an infringement and the analysis is all about the context of each particular URL. There are no rules for how many letters need be changed or how similar a URL need be to trigger infringement. Darthlink.com, based on another common typo, could be a trademark infringer, but what about an enterprising Star Wars fan using it as a rally point for his Star Wars Galaxies MMORP guild members. Or perhaps you're familiar with my personal favorite fallwell.com. It's a clever little parody of falwell.com, so clever in fact that the Reverend brought the boy to court and lost. In Lamparello v. Falwell, the court held that the use of fallwell.com did not create confusion as to source or initial confusion, and was thus not a violation of trademark. Read about it here and here. Based on these two examples alone it is doubtful that an algorithm would be able to distinguish those URLs that do in fact infringe from those that don't. Google's seemingly untenable position is to be either extra aggressive in removing potentially infringing URLs from its services and be sued when they are wrong, or to let trademark holders ask them to remove infringing sites and be sued for doing business with such sites.

Now, whether Google engages in shady behavior by working with the multitude of parked sites is also a difficult question. Those who manage these sites will find a way to monetize their assets and if it's not through Google it will be through another source. I imagine, however, that if earthlink.com owned all the typo variations of its URL and Google helped it monetize them no one would have a problem.

One point about the revenue that Google gets from these parked sites is how it floats the AdSense dollars generated from a given site. For those unfamiliar with AdSense, Google doesn't cut checks to participants on a regular basis; it cuts checks only when the AdSense hits $100. There's a great post on this from Nicholas Carr at RoughType describing how Google floats all this money until an AdSense account hits $100, pocketing all the interest. This could be a week, it could be years, but when you think of all the parked pages running Google ads on top of active sites in AdSense, the scheme makes up a major chunk of Google's earnings. Carr provides an enlightened description of an AdSense participant:

He struggles on, earning a penny here and a penny there, waiting month after month for the $100 mark to arrive. He becomes another Google sharecropper, one of the thousands working the rocky soil of the AdSense plantation. And all the while Google gets to hold onto the poor sap's meager earnings, using them for its own purposes. In many cases, I'm sure, the less-than-$100 balances never get collected, and Google gets to pocket them for good.

To be fair, if someone wants to make a stink about how Google makes money this makes for a much better attack and it doesn't rely on erroneous claims about trademark law.

This issue of typosquatting seems to be catching on as the WSJ follows up with a typosquatting article of its own today. In the end, Google's approach is a carefully planned one since it is under no legal obligation to police typosquatters and its hands off approach doesn't create situations where it is removing legitimate sites. Were Google too aggressive in this regard it could run into even worse publicity for abridging free speech rights by removing non-infringing URLs from AdSense. Everyone has their own understanding of evil when they decry Google's motto of "Don't Be Evil," but being smart and erring on the side of empowering the small guy instead of catering to the wishes of Best Buy doesn't strike me as being evil at all.