ICANN refers to the Internet Corporation for Assigned Names and Numbers. ICANN allows a five-day grace period during which registrars of a domain name may test out the popularity of domains as well as correct misspellings and other mistakes. However, if a domain isn't profitable as anticipated, or another reason, one can cancel the domain and receive a refund.
Domain tasting is the practice of using the Grace Period to test the marketable nature of a domain name. Registrants try on variations of domain names and test them for profitability, keeping track of the visits to the site. Then, if a domain is not profitable, registrants may simply cancel the domain.
The practice of domain tasting has become controversial. People register names and derive income from them by placing pay per click advertisements on the sites. Before the five-day period ends, the registrants cancel the domain names. Therefore, registrants never pay for owning the domains.
Domain Tasting in the Courts
The U.S. District Court for the Central District of California addressed the issue of domain tasting. See the decision of Verizon California Inc. v. Navigation Catalyst Systems, Inc., 568 F. Supp. 2d 1088 (C.D. Cal. 2008). Defendant Navigation Catalyst Systems had registered some 1,392 domain names that were confusingly similar to Plaintiff’s marks. For example, they registered names including ve3rizon.com, veri8zon.net, and veri9zonwireless.com. So, they were hoping to profit from consumers’ misspellings of the Plaintiff’s domain names. However, the Court stated that it was clear from the evidence that Defendants’ intent was to profit from the poor typing abilities of consumers and that there can be no clear value in a name like ve3rizon.com.
As of June 26, 2008, the ICANN Board has adopted a new policy targeted at the problems faced with domain tasting. Once implemented, the new policy will prohibit registry operators from offering refunds to registrars for domain names that are deleted during the Add Grace Period that exceed a threshold defined by the Policy. The limits defined in the policy are (i) 10% of that Registrar’s net new registrations in that month, or (ii) fifty domain names, whichever is greater. Policy supporters believe adding limits will reduce problems faced when the grace period is abused.
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