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Covington Secures Key Victory for AAA in Domain Name Cybersquatting Dispute

10/21/2009

WASHINGTON, DC, October 21, 2009 — Covington & Burling LLP has secured an important victory for The American Automobile Association, Inc. (AAA) ending a long-standing dispute over the valuable AAA.NET domain name. On October 19, a federal court in Pennsylvania entered a judgment on behalf of AAA transferring the AAA.NET domain name to AAA and permanently enjoining a known cybersquatter from registering, trafficking, or using domain names confusingly similar to AAA’s registered trademarks.

The consent judgment “negated” and made “of no precedential value” a decision by the National Arbitration Forum (NAF) in which a split panel had denied AAA’s request under the Uniform Domain Dispute Resolution Policy (UDRP) for transfer of the AAA.NET domain name. AAA has initiated dozens of UDRP proceedings resulting in the transfer to AAA of more than a hundred identical or confusingly similar domain names, and the split decision concerning AAA.NET had been the only proceeding not resolved in AAA’s favor.

AAA sought transfer of the AAA.NET domain name after it learned that defendants James M. Van Johns and QTK Internet, Inc. (a/k/a Damian Macafee) were using the domain name to host a pay-per-click (PPC) advertising website. PPC, or click-through advertising, is the practice of hosting websites with advertising links tailored to the expected interests of Internet users; often, the links are keyed to the title of the domain name, and the website owner profits every time an Internet user clicks on any of these links. AAA contended that the defendants used the AAA.NET domain name to profit from its association with AAA.

Although the split NAF panel had held that the defendants’ registration and use of the AAA.NET domain name to host a PPC website did not constitute illegitimate or bad faith use, it did so without the benefit of discovery, cross-examination, and other mechanisms for evaluating the credibility of the defendants’ statements in that proceeding, including statements by the defendants that they had no control over the content on the website affiliated with AAA.NET. AAA’s federal complaint alleged that the defendants were engaged in a willful and elaborate cybersquatting and PPC advertising scheme involving more than 1,300 domain names, many of which include other well-known and famous trademarks owned by others. AAA further challenged the veracity of assertions made by the defendants in the NAF proceeding.

The Covington team was led by partner Neil Roman, with associates Hope Hamilton and Peter Saharko. All are based in the firm’s Washington office. To learn more about the case, here are copies of AAA’s Complaint and the Court’s Consent Order of Judgment.

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