One domainer business model is to register generic words and/or letter combinations as domain names for future sale. The dissent in The American Automobile Association, Inc. v. QTK Internet c/o James M. van Johns, FA1261364 (Nat. Arb. Forum, July 25, 2009) opined that speculative registrations of generic words and/or letter combinations with the intention of selling them at a profit “[o]nce someone wants to acquire the domain name ... were intended to be prohibited by the policy....”

The proposition expressed by the dissent has garnered some blogger agreement, but there is nothing in the WIPO Final Report or case law that outlaws registering generic words and/or letter combinations in anticipation that someone sometime in the future will acquire a trademark. If the law were as the dissent would have it then holders of later acquired trademarks would have a right to claim domain names earlier registered in good faith. The proposition has been advanced by complainants in past cases and rejected. It is a prospect that excites a fair number of holders of newly minted trademarks, but it is not the law.

A domain name registrant is a cybersquatter if it intentionally targets an existing (or in some instances an imminent) trademark. Inability to foresee a third party’s future interest in a domain name may indicate a weakness in reading tea leaves or entrails but it is not proof of bad faith registration. The Panel in Tomatis Developpement SA v. Jan Gerritsen, D2006-0708 (WIPO August 1, 2006) defines cybersquatters as “people who register domain names knowing them to be the trade marks of others and with the intention of causing damage or disruption to the trade mark owners and/or unfairly exploiting the trade marks to their own advantage.” It is not an abusive practice to purchase domain names for which there are no corresponding trademarks and in some instances it is not abusive even if there are.

A variant of the dissent’s view in The American Automobile Association and found equally unpersuasive by an appellate panel is expressed by the Plaintiff in Southern Grouts & Mortars, Inc. v. 3M Company, ___ F.3d ___ (11th Cir. 2009). It argued that 3M’s continued registration of the domain name violated the Anticybersquatting Consumer Protection Act, even though 3M had come into possession of <diamondbrite.com> legally by acquiring the company that owned it years earlier. The “paradigmatic harm” targeted by the ACPA is “holding domain names for ransom with an intent to profit directly from selling the domain name” to the trademark holder. However, Southern Grouts “accuses 3M not of a design to sell a domain name for profit but of a refusal to sell one.” Since liability rests on defendant having a “bad faith intent to profit” from the trademark, holding “onto a domain name to prevent a competitor from using it” does not violate the ACPA.