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Complaint Filed Against "Cyber Pirates"

Complaint Filed Against "Cyber Pirates"

News Release – June 7, 1999

Washington, DC – A complaint was filed today with the Bar Associations of
the District of Columbia and New York which accuses several attorneys of the
Covington & Burling Law Firm and a New York attorney of conspiring to
misrepresent trademark laws in an effort to take a domain name from the
Consumer.net group of web sites.

The case involves a letter sent by Gerald Waldron, an attorney at Covington
& Burling firm, a major law firm with offices in the US and Europe, who
represents the Council of American Survey Research Organizations (CASRO).
CASRO is an industry organization representing marketing research firms that
conduct telephone surveys. The letter contains claims that Consumer.net was
guilty of willful trademark infringement, false designation of origin, and
unfair trade practices but admits Consumer.net provides a direct link to
CASRO.org, the site maintained by his client. It also claims Consumer.net’s
characterization of CASRO’s clients as ‘telemarketers’ is a ‘false
representation in commercial advertising.’

According to Russ Smith, Director of Consumer.net, "I am no legal expert,
but they admit in their letter that Consumer.net directs users to the
CASRO.org site. The likelihood of confusion is simply not there. The letter
goes on to make ludicrous claims that characterizing CASRO members as
‘telemarketers,’ which they are, is somehow illegal. The letter went on to
threaten that a suit would be filed in federal court unless I turn over the
domain name and remove content from my web site."

The situation with attorneys writing to consumers in an effort to take their
domain names is a growing trend according to discussions at the recent
meeting for the Internet Corporation for Assigned Names and Numbers (ICANN)
in Berlin, Germany. ICANN is the non-profit corporation set to take over the
Internet domain name system from the Department of Commerce. Many domain
names initially purchased a couple of years ago on a lark or for a ‘home
page’ have turned out to be worth thousands of dollars. According to Network
Solutions, it took 4 years from ’93 to ’97 to register 1 million names but
from March to June of this year the total registrations jumped from 4 to 5
million. Wallstreet.com recently sold at auction for more than $1 million.
ICANN is in the process of setting up several domain name registrars to
compete with the monopoly held by Network Solutions, Inc. The domain name
trademark dispute policy is a major sticking point in moving forward.

Consumer.net has more than 500 domain names registered, mostly registered
from owners that allowed the registrations from ‘96 to lapse, receives an
average of about one threatened lawsuit per week. "In one case an attorney
representing Dairy Queen contacted me claiming her client had a problem with
my registration of blizzard.net because Dairy Queen sells a milkshake is
called a ‘Blizzard.’ The domain was not even configured yet and was not used
in commerce. Nobody ever contacted me about buying a milkshake over the
Internet. Once I faxed the attorney a letter I never heard back. I think
they were just testing the waters to see if they could scare me into giving
them the domain. It also could have been a backlash to someone registering
Dairy-Queen.com which was placed ‘On hold’ a few weeks prior to the
incident." Consumer.net also maintains the web site Domainia.org that
provides links to information on Internet domains and disputes.

CASRO lobbies for exemptions in federal and state laws to provide exemptions
for their members to restrict the calls they can make to consumer’s homes.
CASRO refuses to maintain "do-not-call" lists which has resulted in one
organization, Private Citizen, to notify the CASRO members of a $500 fee for
the use of the telephone equipment of the Private Citizen members. CASRO
responded by issuing a news release calling Private Citizen members
extortionists according to CASRO Executive Director Diane Bowers.

Smith said, "For the most part CASRO has been successful in getting these
exemptions claiming a First Amendment right to make the calls. However, when
I ask them to produce a court case decision that allows entities to force
speech into private homes they never respond. CASRO claims in their own
literature that more than one in every three called consumers refuses to
respond. This is a bias that is difficult to overcome just by making random
calls." Smith holds several degrees in physics and computer science and has
authored several reports that included a statistical analysis of test

"Telemarketers are companies involved in ‘telephone marketing’ which
includes inbound, outbound, customer service, as well as conducting
marketing surveys by phone. The industry is becoming sensitive to the term
due the bad reputation they created themselves." Telemarketing Magazine and
the American Telemarketing Association have both recently changed their
names to remove the offensive term.

"Several telemarketers now make the ‘survey’ claim during calls in an
attempt to avoid complying with laws covering telephone solicitations. In
one case I went along with the ‘survey’ the next time they called. They
claimed I would get a free prize for an in-person interview. When I left the
‘survey’ I had signed a contract to pay them over $8,000 and they charged my
credit card $750. I cancelled the next day and filed a complaint for fraud
against the company." This company was not associated with CASRO.

"This conversion of ‘survey’ calls to telephone solicitations is
increasing," according to Smith. A recent issue of Direct Marketing News
reported that ‘surveys’ conducted by infoUSA included a question about
whether the business wants to get on the Internet. If they answered yes they
were transferred to a sales person for Network Solutions to purchase a
domain name."

Consumer.net http://consumer.net, http://domainia.org
Letter from Covington & Burling http://domainia.org/letter.asp
CASRO http://www.casro.org, http://www.cmor.org
Private Citizen http://privatecitizen.com
RelaVideo of ICANN meeting in Berlin
Network Solutions http://www.networksolutions.com
CASRO Information offered by Consumer.net http://consumer.net/casroinfo.asp
infoUSA http://www.infousa.com