"Cybersquatters are getting smarter."

That's how local intellectual property lawyer David LeGrand summed up the state of online disputes. Lawsuits over domain names are increasing, and like the Internet itself, the infringers are evolving and becoming more sophisticated, intellectual property attorneys say.

Those registering potentially similar domain names are learning from the mistakes of their predecessors.

Deliberate misspellings, or name variations, are becoming more common as available domain names vanish. And while many cybersquatters are still setting up the typical online casinos and pornographic Web sites, an increasing number are now using their controversial domain names for less-visible "directories."

Money, not public service, is driving these information-driven sites, plaintiff's lawyers charge. The revenue stream for directory sites is harder to trace, and the site's purpose is not so blatantly commercial, explained John Krieger, a lawyer with the Las Vegas office of Lewis and Roca.

A directory site usually derives "click-through revenue," which is based on users clicking on linked sites and ads.

"Three are a lot of them," he said of directory site cases.

The passage in 1999 of the Anti-Cybersquatting Consumer Protection Act stemmed the tide of overall domain name cases for a short time, lawyers say.

"It seems like in the past two years, it has been picking up again," Krieger said.

The attorney has dealt with alleged cybersquatting first hand in Las Vegas. Most recently, he represented developers of the Cosmopolitan Resort & Casino, planned for Las Vegas, in its lawsuit against a Cayman Islands-based company using the domain name "cosmopolitan.com."

Krieger declined to specifically discuss the Nov. 30 federal court filing because the case was in progress. That complaint alleges, among other things, cybersquatting, unfair competition, trademark infringement and trademark dilution, while seeking damages.

The filing charges defendant Softech Ltd. with deriving click-through revenue via ads and links on its cosmopolitanlv.com site. Among those sites linked, the complaint alleges, were ones for companies selling competing condominium projects, and competitor Mandalay Bay.

Softech, the complaint continues, "diverted Internet traffic intended for (the Cosmopolitan) to its competitors."

The resort project has sites with similar trademarks registered, including "The Cosmopolitan Resort Casino," which is used "for real estate and condominium" sales, the complaint states.

That case is now in settlement negotiations, according to a February court filing by Softech. That companies' Las Vegas attorney referred inquiries to co-counsel in Denver. Calls for comment were not returned by press time.

The directory Web sites are likely the next big thing in domain name disputes, said Andy Mayfield, a St. Louis-based intellectual property attorney with the law firm Armstrong Teasdale. The firm also has Las Vegas offices.

"That really is a developing area," Mayfield said. Key to directories popularity is the difficulty of proving such sites are profitable, which is a needed element in proving bad faith intent.

"Is it a commercial (use) case or not?" he said. "I think it is because the revenue is based on the number of hits placed through the site."

Plaintiffs' lawyers' opinions don't always carry the day in court, however, Mayfield added. "Is it harder to prove cut-and-dried competition? Yes."

LeGrand, a director with Fennemore Craig in Las Vegas, said he sees fewer domain-name disputes involving pornographic and gambling Web sites. "There are some of those left ... but that kind of Web site (case) has been chewed through."

The stragglers are more unfinished business, usually involving a plaintiff selling their business or finally obtaining the financial resources to sue, the lawyer explained.

"The directory sites are a lot more challenging," LeGrand added.

Constitutional issues also come into play with directory sites, explained Mark Tratos, an intellectual property lawyer and instructor at UNLV's William S. Boyd School of Law.

"The ability to get any relief under the law is reduced because of the First Amendment, freedom of speech," he admitted.

Another emerging trend in cyberlegal battles is "typosquatting," which is also generating lawsuits.

The practice of diverting traffic to Web sites by slightly changing the spelling of a more famous domain name has mostly gone under the radar. Typosquatting is typically a civil matter, but was made a crime under the Protect Act in 2000, which is more commonly known as the "Amber Alert" legislation. Typosquatting was included in that law because pornographers often changed the spelling of common domain names to divert traffic to their sites.

Tracking down all the typosquatters isn't easy, said Ron Green, an attorney with Greenberg Traurig.

"With as many domain names there are registered daily, it is hard to police all of them," he said. "I think typosquatting is a big problem for anybody who has been in business for a number of years."

Domain name fights don't show signs of going away, he said.

"As long as there is money to be made on the Internet, people will take the risk."

[Article courtesy of www.lvbusinesspress.com]