Delta Recovery Systems Newsletter
Delta Recovery Systems, a Worldwide Collections Agency June 2005
In This Issue


 

It's every company's nightmare: You own a trademark and discover that someone else has purchased it as a domain name. What's worse, the "cybersquatters" want you to pay a large sum just to get the name back. You're worried about what some strangers might do to your company's good name.

There is some legal relief. Under a U.S. federal law known as the Anti-Cybersquatting Consumer Protection Act (ACPA), you can win your domain name back. Or you can initiate arbitration proceedings under a program operated by the Internet Corporation of Assigned Names and Numbers (ICANN).

Cybersquatting is possible because the registries that sell domain names operate on a "first-come, first- serve" basis. They don't check to see whether a domain name belongs to someone else before it's issued. The registrant has the responsibility to make sure that the domain name does not infringe or violate someone else's rights.

The ACPA was passed during the waning days of the Clinton Administration in response to an epidemic of cybersquatting. The law places great emphasis on the principle that cybersquatters have "bad faith to profit" by commercially using a domain or selling it back to its rightful owner.

But in one case, a court found that the company that makes Gallo wines was a victim of cybersquatting despite the fact there was no attempt to sell the domain or commercially exploit it. In the case, the defendants acknowledged that they engaged in domain name speculation through Spider Webs Ltd., which is based in Texas. They acquired more than 2,000 names, including 300 of them associated with well-known business trademarks like oreocookies.com and firestonetires.com. One of the defendants admitted that "ernestandjuliogallo.com" was valuable due to the goodwill that Gallo developed in its name.

After Spider Webs refused Gallo's requests to transfer the domain name, Gallo filed suit. A short time later, Spider Webs used the disputed domain name to publish "The Whiney Winery" Web site that was critical of Gallo. But the site did not commercially exploit the domain.

The defendants didn't appeal the district court's ruling that Gallo's trademark "Ernest & Julio Gallo" is famous and distinctive. Instead, the defendants argued for reversal on the grounds that they did not act with "bad faith intent to profit" under the ACPA.

In a well-reasoned opinion, the appeals court upheld the lower court decision, despite the complete lack of commercial activity. The court concluded that seven of the nine statutory factors set forth in the law favored a finding of bad faith, based in part on the fact that the defendants:

  • Were admittedly engaged in the business of selling domain names.

  • Failed to use the domain name until after the lawsuit was filed and then used the domain name

  • Admitted that they hoped the plaintiff would contact them to provide services.

  • Prevented Internet users from reaching the plaintiff through the domain name.

 

The decision was a victory for trademark owners. In addition to a $25,000 award in statutory damages, the court stated that the actions of Spider Webs put Gallo "at risk of losing business and of having its business reputation tarnished."


David Ward, CEO



Greetings!

Welcome back to the Delta Recovery Systems monthly newsletter. We're turning up the heat as Summer is here in full force. This month we'll show our appreciation for what is the backbone of our industry, and also demonstrate some of the industry's lesser known benefits. We'll also play the "name game" as it pertains to the Internet era, and look at one of the entertainment industry's greats. As always, we welcome any comments, suggestions and/or questions you may have concerning our newsletter and industry issues in general.

Comments, Suggestions and Feedback


Nobody, with the possible exception of the second and third generation owners of agencies, ever graduated from their particular Institute of Learning or, for that matter, entered one saying "I am going to be a bill collector!" Let's face it; we don't get the respect that we deserve. How many of us have been at social gatherings and have been asked "What do you do for a living?" In the early days of my career in debt collection, I used to try to evade that question by saying something vague like "I work in credit", and hope that whomever I was speaking with would simply accept it and go away. Now, in my third decade in this business, I say "I own a collection agency". The reactions that statement solicits are amazing. The most common is "Gee, I hope you don't have my name". My usual reply to that is "I don't know, but I'll check on Monday morning."

There are people that are actually willing to continue the conversation after finding out my occupation. I then go into the specifics, explaining that mine is a commercial collection agency. Of course I then have to explain the difference between consumer and commercial agencies. With no offense meant to our consumer agencies, the average person is less likely to know how a commercial agency operates. Some of them probably know first hand how consumer agencies operate, the others just know what they hear from disgruntled debtors, but the guy hiding under the couch is probably the subject of your skip trace department.

What these people do not realize is that the collection industry serves an important role in the U.S. economy by recovering billions in revenue for U.S. companies. Our industry saves the average American citizen somewhere between $300 and $400 each, per year. The average citizen saves hundreds of dollars but recoils when meeting a debt collector. What's wrong with that picture? We have a gigantic public relations problem. The general public sees bill collectors as the enemy. That couldn't be further from the truth. Now I'm not saying that we're all warm and fuzzy, but we certainly aren't the bad guys. The problem is that the wide-ranging perception is that we are trying to repossess children's lunchboxes, with the PB&J still inside! I know I'm preaching to the choir, but all we are doing is enforcing the promise that these people (our debtors) made when they obtained the goods and services for which they now have not paid.

Credit is simply based upon a promise to pay. When we get involved, someone broke a promise. That broken promise, if not enforced, will lead to a write off (see "billions" previous paragraph) by the credit grantor. The credit grantor, a business itself, will somehow have to make up that loss. The way the loss is usually made up is that it is passed on to the good paying customers in the form of a price increase. We all know that that price increase will keep rolling downhill until it lands in the consumer's pocket. The same holds true with consumer debt. It's something of a vicious cycle. We are the line of defense. We are holding those potential write offs to a minimum. We are keeping the cost of living down. OK, maybe that's stretching it a bit, but I'm sure we are responsible for holding it down a percentage.

It is up to you, the Collection Professional, to begin to change that broad perception. You and I cannot do it overnight. The journey is long and challenging, yet even the longest journey begins with a first step. In order to travel we must embark. We must commit to movement, to action, and to change.

A simple first step would be to show this article to your employees, especially your collectors. Maybe they'll hold their heads a little higher the next time someone asks "What do you do for a living?"
"The way to get started is to stop talking and start doing."

Walt Disney (1901-1966) movie producer and showman

Too many of us spend, not invest, an awful lot of time talking and meeting to discuss how things should be done. Maybe if we took Walt's advice, we'd actually get more done each day.

Walt Disney is a legend; a folk hero of the 20th century. Arguably, his is the most well known name in entertainment in the history of the world. His worldwide popularity was based upon the ideals which his name represents: imagination, optimism, creation, and self-made success in the American tradition. He brought us closer to the future, while telling us of the past, it is certain, that there will never be such as great a man, as Walt Disney.

American entrepreneur, Walt Disney was born on December 5, 1901 in Chicago Illinois, to his father Elias Disney, and mother Flora Call Disney. Walt was one of five children, four boys and a girl. After Walt's birth, the Disney family moved to Marceline Missouri, Walt lived most of his childhood here.

Walt had very early interests in art, he would often sell drawings to neighbors to make extra money. He pursued his art career, by studying art and photography by going to McKinley High School in Chicago.

Walt began to love, and appreciate nature and wildlife, and family and community, which were a large part of agrarian living. Though his father could be quite stern, and often there was little money, Walt was encouraged by his mother, and older brother, Roy to pursue his talents.

During the fall of 1918, Disney attempted to enlist for military service. Rejected because he was under age, only sixteen years old at the time. Instead, Walt joined the Red Cross and was sent overseas to France, where he spent a year driving an ambulance and chauffeuring Red Cross officials. His ambulance was covered from stem to stern, not with stock camouflage, but with Disney cartoons.

Once Walt returned from France, he began to pursue a career in commercial art. He started a small company called Laugh-O-Grams, which eventually fell bankrupt. With his suitcase, and twenty dollars, Walt headed to Hollywood to start anew.

After making a success of his "Alice Comedies," Walt became a recognized Hollywood figure. On July 13, 1925, Walt married one of his first employees, Lillian Bounds, in Lewiston, Idaho. Later on they would be blessed with two daughters, Diane and Sharon .

In 1932, the production entitled Flowers and Trees (the first color cartoon) won Walt the first of his studio's Academy Awards. In 1937, he released The Old Mill, the first short subject to utilize the multi- plane camera technique.

On December 21, 1937, Snow White and the Seven Dwarfs, the first full-length animated musical feature, premiered at the Carthay Theater in Los Angeles. The film produced at the unheard cost of $1,499,000 during the depths of the Depression, the film is still considered one of the great feats and imperishable monuments of the motion picture industry. During the next five years, Walt Disney Studios completed other full-length animated classics such as Pinocchio, Fantasia, Dumbo, and Bambi.

Walt Disney's dream of a clean, and organized amusement park, came true, as Disneyland Park opened in 1955. Walt also became a television pioneer, Disney began television production in 1954, and was among the first to present full-color programming with his Wonderful World of Color in 1961.

Walt Disney proved that you don't need to be wealthy to be successful, just driven.

David Ward, CEO