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So Domain Tasting, where registrants (who may also be registrars) taste names and keep only those that have economic value, is now the target of a federal cybersquatting lawsuit, brought about by lawyers for major brand name retailers Neiman Marcus and Bergdorf Goodman against major domain name registrar Dotster.

This Dotster lawsuit involves allegations of cybersquatting by registrars who use the Create Grace Period, which is mandated by ICANN for global registries such as PIR (managers of .org), Afilias (managers of .info), and VeriSign (managers of .com and .net). The Create Grace Period is a 5-day period when registrars are afforded the ability to delete a created domain and receive a refund of their registration fee.

Domain Tasters (a.k.a. Domainers) use these 5 days to create pages with many advertising links and evaluate which domains to keep based on the number of clicks and the economic value to be derived from such clicks. An entire industry has sprung up around tasting, fueled by the growth in online advertising revolutionized by Google and Yahoo's pay-per-click advertising models.

The lawsuit wants not only the domains transferred, but also the alleged cybersquatter (who is also the registrar) to be shut down.

Dotster has over 1.3 million COM, NET, ORG, INFO and BIZ names, according to industry tracking site WebHosting.info.

One possible side-effect on the domain industry is a slow down in the torrid pace of domain name registrations for gTLDs such as com, org, info and net, until registrants tune their algorithms to pick more generic domain names and fewer typos of well-known brands and trademarks.

Reference: CNet - Dotster named in massive cybersquatting suit

By Ram Mohan, Executive Vice President & CTO, Afilias

Related topics: Cybercrime, Cybersquatting, DNS, Domain Names, ICANN, Top-Level Domains