Domain Name Hijacking

Keith Sharfman —  6 November 2006

Dan Solove over at Concurring Opinions reports on an insidious practice that unfortunately has become increasingly common: domain name hijacking.

Here’s how it works. The original owner of a popular website fails to renew its domain name prior to the expiration of the owner’s entitlement. An opportunistic “hijacker” then purchases the name and offers to sell it back to the original owner for a tidy sum. The original owner is then left with an unhappy choice: pay the hijacker off, or set up shop under a new domain name with the loss of traffic that such a switch inevitably entails.

The latest victim of such a hijacking scheme is Crescat Sententia, a popular blog that used to be located at http://www.crescatsententia.org/ but now has been forced to move to http://www.crescatsententia.net/.

Dan suggests that domain name hijacking of this sort may well be characterized as copyright infringement. But because the case for copyright protection isn’t clear cut, he wonders if there are other legal protections too.

Here’s my suggestion for another theory of liability: intentional interference with prospective economic advantage. The elements of that tort–(1) an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff; (2) knowledge by the defendant of the existence of the relationship, (3) intentional acts on the part of the defendant designed to disrupt the relationship, (4) actual disruption of the relationship; and (5) damages to the plaintiff proximately caused by the acts of the defendant–all seem to be present here. The original website has an economic relationship with its existing readers or patrons; the hijacker knows about this relationship; the hijacker intentionally acts to disrupt the relationship by acquiring the domain name; the loss of the domain name actually disrupts the relationship by shutting down the old site without indicating where a new site, if any, is located; and the original owner is thereby damaged.

As matter of policy and economics, there isn’t any positive social value associated with domain name hijacking. Indeed, once transaction and switching costs are considered, the conduct actually entails social losses. One would therefore hope (or perhaps a la Posner even dare to predict) that the common law would forbid and deter such conduct. Applying the tort of intentional interference with prospective economic advantage would do just that. And so even if the copyright case against domain name hijacking isn’t airtight, the common law should come to the rescue.

Hijackers beware!

6 responses to Domain Name Hijacking

  1. 

    Yes, I think Steve is exactly right–if the domain name is a registered trademark, then the hijacker’s use of it would be infringement, even if the domain name has expired.

    Stitch in Haste makes the valid point that renewing a domain name is a simple matter and the failure to do so in a timely way is an easily avoidable mistake. All of that is certainly true. But why create traps for the unwary when doing so creates no obvious benefits for society? If there are valid ways to apply standard common law principles to prevent domain name hijacking, then why not do so?

  2. 

    I went to the trouble some years ago of registering ProfessorBainbridge.com as a trademark (or was it a service mark, I forget). If the domain name is a registered trade mark, I wonder whether the owner of the trademark would have a cause of action against the “hijacker”?

  3. 

    Sure, Kip: if the site is truly abandoned, then it’s hard to object to someone else taking the name. But if the name is in active use and simply hasn’t been formally renewed, then taking the name is harmful to consumer and problematic for other reasons as well. It’s hardly “mere competition” to assume the name of one’s competitor. (Imagine if Pepsi could call itself Coke.) And it’s not a matter of sympathy for the original site owner so much as a concern about lost resources for society as a whole.

    Consider as an analogy the policy justifications for forbidding blackmail, which on its face looks like a mutually beneficial, voluntary transaction with no third party victims. The theory for forbidding it is that we don’t want to encourage people to expend resources to find out sensitive information that could later be the basis for a blackmail transaction. Blackmail entails search and transaction costs and no offsetting benefits (the wealth transfer from the victim to the blackmailer produces no net welfare benefit). So too with domain name hijacking. It costs something to take over someone else’s name, and then to negotiate to sell it back. But the wealth transfer associated with the transaction is not welfare enhancing. It’s just a pure transfer, and it comes at a cost that society would be better off not to expend.

  4. 

    I have no sympathy whatesoever for people who suffer from their own carelessness, especially considering that domain names cost about a dollar per year.

    As for the tort, IWPA clearly exempts mere competition. It also requires intent to harm via improper conduct. Legally and legitimately buying an abandoned website in order to make a buck is hardly “improper.”

  5. 

    I recently renewed truthonthemarket.com through November 16, 2010. Remind me again in four years.

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