Microsoft Corp said on August 22 that it has filed two lawsuits against so-called "cybersquatters" or "typosquatters" who use the company's product names to profit illegally from online advertising.
The world's largest software maker said the explosion in online advertising in recent years had given rise to the illegal registration of Web site domains containing trademark Microsoft phrases or common brand name misspellings.
With billing for the ads determined by number of clicks, such sites can drive up traffic and, ultimately, ad revenue.
The sites prey on the errors or ignorance of surfers who type in a non-Microsoft Web address like "freemsnhotmail.com" in search of a genuine Microsoft Hotmail e-mail account.
"This land rush on the Internet was to collect as many domain names as possible and monetize them using pay-per-click ads," said Aaron Kornblum, a Microsoft lawyer in charge of its Internet safety enforcement.
Internet Identity, a company that monitors online activity, said more than 2,000 domain names are registered daily that contain some Microsoft trademark terms and 75 percent of those are owned by professional domain name-holding companies.
Microsoft said registering trademarked Microsoft names violates the 1999 Anticybersquatting Consumer Protection Act, a law that calls for a fine of up to $100,000 for anyone who registers a domain name that is identical, similar or derived from an existing trademark with an intent to profit.
Under that law, Microsoft said it filed a suit against three individuals who are working together to register 324 domain names targeting the software maker. It also filed a suit against a California man who registered 85 domain names targeting Microsoft, according to the company. While the US law has been on the books for seven years, the growing use of pay-per-click advertising has raised the stakes for trademark and brand owners by giving illegitimate operators more avenues with which to trick consumers.
Microsoft is targeting people who register those domain names, but not the online advertising providers who act as middlemen, which include rivals Yahoo Inc and Google Inc as well as Microsoft's own advertising system.
Microsoft said MSN AdCenter does not operate a service for domains like the ones registered by cybersquatters.
"Going after people with a domain name is no big deal," said Danny Sullivan, a Web search industry analyst.
"If Microsoft did go after someone like Google or Yahoo and said 'We're going to sue you because you are not being responsible enough for keeping that stuff out of there,' that's more going to the source," he said.