The term ‘domain grabbing’ refers to the process of the abusive registration reservation of a large amount of domain names on the Internet. The purpose of domain grabbing is to maximize profits. Also known as domain warehousing, domain grabbing is a highly controversial tactic. In this article, we will discuss the process of domain grabbing, including how and why it is done, and the reasons why it is considered a controversial practice.
Domain grabbing, also known as domain warehousing, refers to a practice that involves registering domains on the Internet. The intention of domain grabbing is to sell the rights of ownership to the domains rather than keeping the domains for personal use. The person who grabs the domains has plans to make a profit by selling off popular high-level domains.
How Domain Grabbing Works
Typically, the names of specific services or products are avoided when domain grabbing occurs, as the hope is that the practice will prevent conflicts with the rights holders from arising. In this way, domain grabbing does not violate trademarks laws. In other words, the domains that are grabbed are usually associated with generic terms. Those who are registering domains are looking for specific terms and domains that exactly match those terms. They also look for expired domains.
Once obtained, the person who purchases the rights for the domains can sell them, or the domains can be “parked.” When a domain is parked, the intention is to place ad links on the domain and earn commissions on clicks, thus advertising revenue is generated.
The History of Domain Grabbing
When the Internet was first introduced, domain grabbing was a very standard practice. A lot of companied did not register their brand names as a domain, or they failed to search relevant terms that were associated with their brand. People became aware of this, especially agencies and hosts, and as such, they “grabbed” the domains and sold them to the actual rights holders of the brand names, or they sold domains that had generic names to other companies that were interested in creating a better position for themselves in their industry.
Thanks to the advances of technology, the practice of domain grabbing has changed. Previously, case law for digital products was not identified; however, today, it has been identified and differentiated. This lead to a clear differentiation between domain trading and domain grabbing. If the intended purpose of purchasing a registration is to harm the rights of the party that owns a trademark, it can be considered unlawful domain grabbing and can be punishable by the law. If that happens, legal damages and financial repercussions could result.
If a domain is registered with a generic term, it is not automatically considered infringement; rather, it is often considered a standard business action. As such, trading of domains, even those that have similar generic terms, is not exactly illegal. However, domains that contain specific keywords can be registered and sold, as long as those keywords are not a registered trade name or trademark, or are protected in any other way.
Domain Grabbing and Online Marketing
Registration of domain names is a very common practice in online marketing. Initially, this practice was done without very much consideration. A lot of agencies have registered domain names, parked them, and advertised on the websites for the purpose of making revenue.
Typically, Internet service providers have portfolios of Internet addresses, which include domains. Only if the intention of domain grabbing is seen as unlawful can a company file a legal claim. As such, the legalities that surround domain grabbing are based on individual cases, and can therefore only be judged in light of other areas of the law, such as trademark law, competition law, and law that governs naming rights.) With that said, it is advisable for marketers to seek legal advice before purchasing a domain, especially if the domains of interest are not automatically extended.