Dell Inc. is pursuing a major “cybersquatting” lawsuit against several companies that buy and sell Web site addresses, alleging that the entities earned millions of dollars from Internet traffic intended for Dell and dozens of other Fortune 500 companies.

The complaint, filed in Florida,  details how the companies use ICANN’s domain-tasting provisions, whereby registrars can ‘test ‘ domains free for 5 days before purchasing. The companies cycled the domains to avoid having to pay for them, all the while profiting from pay-per-click ads on the sites that often served visitors with ads for Dell’s competitors. David Steele, an attorney representing Dell in the case, said the defendants tasted on average between 30 million and 60 million domains each month. In any given month, Steele said, the registrars collectively purchased between 50,000 and 200,000 of the domains they tasted.

It is said that the ownership of the companies is obscure and it will be difficult to prove collusion.

However, Dell has also filed counterfeiting charges. This led to sealing of court records, seizure of equipment, and freezing of funds.

Under federal cybersquatting laws, the minimum a court could award Dell would be $1,000 per infringed domain name, up to a maximum of $100,000 per domain. If considered a violation of federal counterfeiting law, each violation could bring damages up to one million dollars.

Law professor Michael Froomkin considers that a long shot.

[Source:Washington Post]