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Google Sued in Domainer Lawsuit: Vulcan Golf v. Google

Vulcan Golf, LLC v. Google, Inc., No. 07CV3371 (N.D. Ill. complaint filed June 15, 2007) [WARNING! the complaint is a 4.3MB PDF]

Domainer litigation is heating up, and this lawsuit may be the most ambitious anti-domainer lawsuit to date. First, it is a putative class action lawsuit. Second, in addition to naming four leading domainer firms, the plaintiffs provocatively go after Google for providing ads to domainer sites. I believe this is the first lawsuit against Google for its domainer relationships.

The complaint itself is a 121 page, 638 paragraph (with one paragraph enumerating 47 defined terms), 4.3MB behemoth alleging trademark infringement and dilution, ACPA violations, RICO and other claims.

Much of the lawsuit focuses on Google’s “AdSense for Domains” program specifically catering to domainers and domain name parkers. Google’s program is somewhat obscure and unusual. It is only available to domain names that don’t have any content (other than the ads provided by Google), and Google effectively takes control of the pages itself. As the program’s FAQ says, “AdSense for domains customers redirect traffic from parked domains to the AdSense for domains service. When Google receives the request, it processes the domain name and returns formatted HTML that includes contextual ads and related searches. Customers can either display the full page HTML or include it in a frame.” The plaintiffs argue that, as a result, Google is effectively the domain name licensee, which enables plaintiffs to assert an ACPA claim against Google.

Functionally, the complaint says that a “domain name is not a search query” (para. 312). However, from my perspective, Google in fact treats the domain name exactly like a search query; the domain name acts like a keyword to trigger ads, no different from the way Google treats a searcher’s keywords as a trigger for ads on its website. (I explain my view of the interrelationship between domain names and keyword triggers in much more depth here).

Whether domaining is a good or bad thing policy-wise depends on your view:

Con: Trademark owners complain about the typosquatting nature of most domainer pages. Indeed, Google is uncharacteristically solicitous of trademark owners upset by parked domains—in contrast to Google’s normal policy that it won’t disable trademarked keywords, Google will completely disable ads on parked domain names at the trademark owner’s request. This raises the lurking issue about whether search engines can impose opt-out obligations on IP owners [PDF]. At the same time, it makes me wonder if the class could get its desired results simply from following the complaint procedures. (The complaint rejects this approach, calling the trademark complaint procedures “audacious” and “illusory.”)

Pro: Google and the domainers could point out that consumers who access these domain names are either going to see a 404 or a page of putatively relevant paid links, and the latter is more useful to them. In fact, according to this study, ads on parked automotive-related domains convert at 2X ads on search engines. So, perhaps these ad pages are more helpful to consumers than 404 pages.

There is a lot of interesting detail in the complaint, but I’ll just point to one more tidbit. The complaint notes that Google has repeatedly gone after typosquatters on the Google mark. It says “Defendant Google…has engaged in precisely the same illegal conduct ... that Google itself complained of… In fact, Defendant Google has taken the illegal conduct to a new and more egregious level” because (among other things) it profits from hundreds of thousands of illegitimate domain names and uses a “sham” and “illusory” trademark complaint procedure.

It’s hard to tell if a complaint like this will have legs. The plaintiffs’ attorneys did extensive research and provide a lot of detail, so the complaint lacks some of the deficient elements we often see in lawsuits against search engines. At the same time, the lawsuit could be gutted if the judge rules that none of the parties engaged in a trademark use in commerce-an open legal question that has not been resolved in the domainer context. Further, the lawsuit could effectively fall apart if the judge rejects formation of a class. Trademark class action lawsuits are rare for good reason—trademark owners must establish the validity of their marks, the famousness of their marks (for dilution) and the similarity between their marks and the defendants’ usage. These are all intensely fact-specific questions; none of which seem susceptible to class adjudication.

By Eric Goldman, Professor, Santa Clara University School of Law

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John Berryhill  –  Jun 29, 2007 8:57 PM

Can we all agree not to use “404 error” incorrectly?

A 404 error is “file not found” at an existing address.  It is an HTTP-level error message generated by a web server operating at the domain name in question.

A non-existent domain error (NXDOMAIN) is generated at the DNS level when the requested domain name does not exist.

It is a distinction with several important differences.

Long ago, browsers would return “server not found” in response to NXDOMAIN DNS responses.

They don’t do that anymore.  The Mozilla Foundation collects over 72 million dollars per year by configuring their browser to default to Google search on NXDOMAIN.  Similarly, the default MS IE Explorer browser defaults to MSN Live Search.  Other software publishers, such as Yahoo, produce browser “enhancements” which change the defaults and which produce the same result.

The position that “a domain name is not a search query” is thus more than a little bit disingenuous.  Analysis of the AOL search queries that was inadvertently released by AOL some time ago, shows that more than 1/4 of the terms typed into AOL search were, in fact, domain names.  It turns out that a lot of people don’t really understand how to operate a browser, and a significant portion of users type a domain name into a search bar, and then click on the first search result.  My own mother used to navigate this way for years, and she was astounded when I showed her the difference between the search bar and the address bar.  For a long time, she was mystified by URL’s which seemed to work for everyone else but her.

Why does it matter?  Simple.

Just as the browser publishers have picked up on using NXDOMAIN as a default to paid search systems, the ISP’s - including Verizon - have begun to catch on to the fact that they can detect these errors and present search pages instead of an error page.  As Eric notes, whether one considers a search page to be more useful than an error page is something of a religious question.

Whatever one’s persuasion however, it is utterly clear that if every parked domain name and search page were to disappear overnight, then the very next day internet users would still be getting search pages in response to those addresses.

The only difference would be who gets the money.  What is truly impressive is the strategy that Verizon has taken in order to clear out registered domain names in order to replace the resulting non-existent domain names with their Superpages search system.  It’s brilliant.

Michael VanDeMar  –  Jul 4, 2007 5:04 PM

However, from my perspective, Google in fact treats the domain name exactly like a search query; the domain name acts like a keyword to trigger ads, no different from the way Google treats a searcher’s keywords as a trigger for ads on its website.

Actually, one of the main problems with the AdSense for Domains program is that the ads are not contextually targeted. Yes, perhaps the homepage is, if people happen to reach the domain via direct typed in traffic… but Google makes a point of indexing pages that were generated based on arbitrary keywords in the querystring. I did a writeup of it here not too long ago: Consextual Advertising.

Also, one minor correction to something you said:

In fact, according to this study, ads on parked automotive-related domains convert at 2X ads on search engines.

The article you linked to there stated that “Domain park sites generally convert at a rate of over 5%, while search and content conversion rates are at about half that”... so ads on parked domains convert better than ads on search engines and on all of the other content network combined, not better than search engine ads themselves.

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