By: Todd Cooley, www.toddcooley.com
The growth in affiliate marketing has provided enormous benefits for e-commerce businesses and affiliates alike. But the market’s very success has made it an attractive target for those seeking to take advantage of the Internet’s inherent potential for misleading consumers.
Consider typosquatting, a form of online trademark infringement in which shady operators register misspelled versions of popular Internet domains in order to exploit typing mistakes and redirect traffic from its intended destination. Such domains can attract considerable traffic: studies show that a significant number of Internet users—almost 40%—seek websites by manually typing the URL into a web browser, and more than 25% of those efforts result in spelling errors.
Typo domains are sometimes used to sell counterfeit goods or to “phish” for confidential personal information. They more commonly feature pay-per-click advertising, either for the intended site—through an affiliate link—a competing site, or even a site selling completely unrelated products or services. As a result, legitimate brands are unnecessarily paying for traffic that has been re-routed through an affiliate, or losing it completely to competitors and others .
Though it has received relatively little attention, typosquatting is a huge problem, especially for successful e-commerce operations. Benjamin Edelman of Harvard studied the problem and uncovered some 938,000 typo domains targeting the top 3,264 dot-com sites. Approximately 80% of those sites feature pay-per-click advertisements. Another study found that the 250 most highly trafficked sites annually lost 448 million impressions and an estimated $364 million. Those companies most successful in building their brands and stimulating website traffic are the most highly threatened.
How should brands respond to such threats?
Typosquatting is illegal under the 1999 Anticybersquatting Consumer Protection Act. Trademark holders who believe a registered domain name is “identical or confusingly similar” to their trademark and is being used in bad faith have a variety of options for reclaiming it ranging from sending a “cease and desist” letter, to pursuing a UDRP (Uniform Domain-Name Dispute-Resolution Policy) with the World Intellectual Property Organization or the National Arbitration Forum.
However, letters are often ignored and a UDRP can be a difficult, time-consuming, and expensive proposition.
Ideally, brands should prevent typosquatting in the first place, for example, by effectively managing their domain portfolios and defensively registering the most obvious typo domains. However, anticipating and registering all potential typo domains is extremely challenging, and detecting them once someone has registered and begun using them is almost impossible without the sophisticated technology tools.
Fortunately, companies have emerged to help brands combat typosquatting and other forms of online trademark infringement and brand abuse. One of the most prominent such companies is CitizenHawk, a digital brand protection firm whose clients include one in four members of the Internet Retailer 500.
CitizenHawk, which today helps brands fight online abuse ranging from counterfeit sales to false affiliation, initially earned a reputation for its unprecedented ability to uncover typo domains and successfully recover them on behalf of trademark owners. CitizenHawk was awarded a U.S. patent for its distinct, computer-enabled method of detecting and then reclaiming Internet domains that are infringing on its clients’ trademarks, and the company has been extraordinarily successful in UDRP proceedings, winning more than 400 decisions and prevailing in 99% of the cases it has filed. CitizenHawk has reclaimed more than 21,000 Internet domains, including 1,017 domains in a single case (on behalf of freecreditreport.com)—the biggest domain transfer in history.
David Duckwitz, CitizenHawk’s President and Chief Executive says his company’s victory in that UDRP proceeding underlined one of its core strengths: its ability to uncover common ownership of multiple infringing domains, notwithstanding the efforts of owners to cloak their identity. He attributes CitizenHawk’s success to its combination of sophisticated technology and expert analysis.
“Technology is crucial for actually detecting infringing domains and assembling the evidence needed to prevail in a UDRP proceeding,” Duckwitz said. “But it also takes human analysis to connect the dots and uncover a single owner hiding behind numerous pseudonyms. That’s crucial, since pursuing multiple domains is much more time- and cost-efficient than trying to recover them one at a time.”
Duckwitz, formerly Senior Vice President of Operations at Commission Junction, notes that his company is a member of most of the major affiliate networks, including LinkShare, Commission Junction, and Google Affiliate Network. However, he says the networks can facilitate typosquatting since they provide an easy way to monetize redirected Internet traffic.
“Many, if not most, typosquatters make their money by exploiting pay-per-click opportunities,” he said. “We’re strong believers in the power of affiliate marketing; we just want brands to recognize the inherent risks.”
 While competitors sometimes benefit from traffic redirected toward their sites, there is no evidence any significant brands are consciously participating in typosquatting schemes. And though many of the worst offenders are members of the largest and most admired affiliate networks, they are executing their schemes without the knowledge of the networks themselves.