Man Faces 20-Year Imprisonment for False Threats Over Domain Names

David Scali, a Las Vegas resident, faces a potential U.S. federal prison term of 20-years after agreeing to plead guilty to wire fraud. The FBI alleges that Mr. Scali impersonated an intellectual property lawyer and threatened to file $100,000 trade-mark infringement lawsuits against owners of typo-based Internet domain names unless they forfeited their domain name registrations within two days.

Typo-based domain names contain nomenclatures similar to popular websites and can, for example, result in profitable web traffic for their owners by virtue of people mistyping domain names, finding themselves on typo-based websites, and clicking on revenue generating ads found on such sites. In Mr. Scali’s situation, the wire fraud charge is based on a registrant who surrendered a typo-based domain name similar to the domain name, citysearch.com. While a plea agreement could substantially reduce Mr. Scali’s sentence from 20-years, his fate will ultimately rest with the sentencing judge.

This entry first appeared in the September 27, 2007 edition of lawsof.com. For additional information, click here.

L'Oréal Sues eBay Over Counterfeit Sales

The L'Oréal Group, a global cosmetics and beauty company headquartered in Clichy, France, has recently taken legal action against eBay Inc., a popular online auction website, in several countries including France, Germany, Britain, Spain and Belgium. The lawsuits allege that eBay does not effectively combat the sale of counterfeit L'Oréal products on its website and that such failure has resulted in several million euros worth of damage, including harm to L'Oréal’s selective distribution network and the reputation of its trade-marks. Meanwhile, as L'Oréal observes, eBay receives a percentage of each transaction and advertisement on its website regardless of whether it is derived from legitimate or counterfeit items.

L'Oréal claims that it has generally been facing an increase in illicit trade in counterfeit fragrances and cosmetic products on various online auction websites, reflecting similar problems faced by companies like Christian Dior and Tiffany & Co., which have launched similar lawsuits against eBay.

This entry first appeared in the September 13, 2007 edition of lawsof.com. For additional information, click here.