Dell claims that organizations doling out domain names have deployed a network of shell businesses that profit from fat-fingered people who make typos while entering URLs.
The company's federal suit, filed in October with the U.S. District Court for the Southern District of Florida, names three registrars -- BelgiumDomains, CapitolDomains, and DomainDoorman -- and claims they have set up a string of Caribbean-based shell corporations that gain rights to typo domain names and take in the pay-per-click revenues, according to The Washington Post.
People making the typing errors wind up on sites crammed with advertising, and the advertisers pay the shell companies for the hits, according to the Post's account of the lawsuit.
Because the typo sites' names are similar to those of legitimate, trademarked Dell sites, Dell claims the dummy corporations are illegally profiting from the company's assets.
Not only did the accused businesses engage in this typo-squatting, they managed to dodge paying anything for the typo URLs, the suit says. They would sign up a URL, use it on a free trial for five days and return it. Then another of the dozen or so shell companies would immediately scoop it up for another free trial.
By passing URLs around among themselves, the companies could avoid paying anything, at least until they decided whether it was worth the US$6 it costs to register the name for a full year.
Dell's attorney claims the accused companies sampled 30 million to 60 million sites per month, paying for a full year's rights for 50,000 to 200,000 of them, according to the Post story.
If found guilty, the companies could be fined US$1,000 to US$100,000 per infringed domain name under federal cybersquatting laws. Dell is trying an unproved tactic: charging the defendant companies with counterfeiting. If that sticks, the potential penalties soar to US$1 million per infraction, the Post says.