The Calgary teen registered the domain with a friend in July last year, soon after Apple announced the iMac. He said he wanted the domain because he figured it would generate a lot of traffic, through which he could advertise his Web-hosting company.
A note on the site says the pair "registered this domain (appleimac.com) hoping that I would generate traffic to our servers and try to put the domain to sale.[sic]"
But a Fenwick & West attorney who represents Apple yesterday contacted the teen with a letter stating: "It has come to Apple's attention that [the teen's company] has obtained and is offering the domain name 'appleimac' for sale...Obviously, [the company] obtained the domain hoping to trade off of the tremendous goodwill represented by Apple's company and name and its Apple and iMac trademarks."
It goes on to ask that the teen "immediately transfer the domain name to Apple." Although it doesn't directly threaten legal action, the letter notes that failure to turn over the domain "will likely constitute an infringement and dilution of Apple's strong trademark rights."
The practice of so-called cybersquatting is not new. For years, people and companies have been trying to cash in on the domain name system's "first come, first served" policy by reselling the domains or otherwise profiting from them. But as the Net has matured and commercial interests have flocked to it, the courts have ruled in favor of companies in cases where their trademarks are at risk of being diluted. Moreover, new laws have been enacted in recent years to address the Internet.
"The dilution statute of 1995 was specifically targeted toward giving remedies against domain name squatters," Internet attorney and Santa Clara University Law School professor Eric Goldman told CNET News.com in a previous interview. "The Dilution Act was meant to curb the 'gold rush' of people going in and registering domains of company trademarks with the intent of selling them back to companies."
The Canadian teen still hopes to gain from the domain name. "I don't want to give it up so easy," he said, adding that he plans to "make a fair deal" with Apple for the domain. However, he conceded that he would turn it over if the company took legal action against him.
The Apple dispute is surfacing as Network Solutions (NSI), the government-appointed domain name registry, is making moves to curb system abuses by ".com speculators." It is changing its system so that people trying to register popular names to resell them are unable to do so. Critics are calling the change anti-competitive.
The issue is not exclusive to technology companies. Last month, CNET News.com reported a legal battle between Archie Comics and a parent who operated a site on the "Veronica.org" domain for his 2-year-old daughter. The comics company dropped the issue after it made national headlines and led to a televised interview on the Today show.
Last spring, the Prema Toy Company, which owns the trademarks on the "claymation" character Gumby and his horse Pokey, took issue with a 12-year-old Web designer who operated the "Pokey.org" site. That dispute also was settled peacefully, and both sites are up and running today.
The Apple dispute does bear one distinct difference from the earlier cases, however: Unlike the stated goals on the Canadian teen's site, Veronica.org and Pokey.org are amateur sites intended as outlets for expression and not to generate profit. Although the teen said he wanted the traffic "mostly for fun," it is not surprising that Apple would bristle at someone seeking to profit from the use of its trademark.
Still, the question remains why Apple didn't register the domain itself. It has registered a number of iMac-oriented domains, such as "Apple-imac.com," "imac-Applecomputer.com," and "imacAppleComputer.com," all of which lead to Apple's home page. It also has already registered "Macmate.com," which is expected to be the name of an as-yet unreleased handheld device the company is developing. Also, it registered "FinalCutPro.com," which is the name of a video software editing package that the company is slated to release later this year. That domain leads to the PowerBook page on Apple's site.
A similar trademark dispute that arose last week has led to a filed suit by toy company Ty, maker of the phenomenally popular Beanie Babies stuffed animals, against a St. Louis woman over her "beaniebaby.com" site.
According to the suit, the woman unlawfully sells the toys and Beanie Babies official club membership kit products on her Web site, violating Ty's trademarks. The company also contended that she tried to sell the site for $1.25 million. It is seeking the domain and unspecified damages.
News.com's Jim Davis contributed to this report.