Cybersquatting Remains on the Rise

"The rate at which domain names change hands and the difficulty to track such mass automated registrations challenge trademark owners in their pursuit of cybersquatters."

by / March 12, 2007
The number of cybersquatting disputes filed with the World Intellectual Property Organization (WIPO) in 2006 increased by 25 percent as compared to 2005. In a related development, the evolution of the domain name registration system is causing growing concern for trademark owners, in particular some of the effects of the use of computer software to automatically register expired domain names and their "parking" on pay-per-click portal sites, the option to register names free-of-charge for a five-day "tasting" period, the proliferation of new registrars, and the establishment of new generic Top Level Domains (gTLDs). The combined result of these developments is to create greater opportunities for the mass, often anonymous, registration of domain names without specific consideration of third-party intellectual property rights.

"While electronic commerce has flourished with the expansion of the Internet, recent developments in the domain name registration system have fostered practices which threaten the interests of trademark owners and cause consumer confusion," noted Francis Gurry, WIPO deputy director general, who oversees WIPO's dispute resolution work. "Practices such as 'domain name tasting' risk turning the domain name system into a mostly speculative market.

"Domain names used to be primarily specific identifiers of businesses and other Internet users, but many names nowadays are mere commodities for speculative gain," continued Gurry. "The rate at which domain names change hands and the difficulty to track such mass automated registrations challenge trademark owners in their pursuit of cybersquatters."

In 2006, a total of 1,823 complaints alleging cybersquatting -- the abusive registration as domain names of trademarks -- were filed with WIPO's Arbitration and Mediation Center, representing the highest number of cybersquatting cases handled by WIPO since the year 2000.

Since commencement in December 1999 of the Uniform Domain Name Dispute Resolution Policy (UDRP) through December 2006, 10,177 UDRP or UDRP-based cases have been filed covering 18,760 separate domain names.

A total of 9,389 (97 percent of total cases) UDRP cases received by the Center have so far been resolved. Of the gTLD cases resolved, decisions have been rendered in 7,328 cases with some 84 percent of those cases ending with the transfer of the domain name to the complainant and approximately 16 percent being denied. 2,061 cases have terminated on other grounds, primarily on the basis of settlement agreements between parties transferring the domain name to the complainant.

The WIPO dispute resolution procedure served a wide range of users, ranging from well-known brands, to smaller enterprises and organizations, as well as individuals. They covered categories including luxury items, famous persons, entertainment, hospitality, sports, gambling, and pharmaceuticals. In addition, charitable organizations and educational institutions were involved.

Since registration of domain names in non-Roman scripts such as Arabic, Chinese, Cyrillic or Korean ("internationalized" domain names) became available a few years ago, the Center has received a total of 60 cases involving such names, of which eight were received in 2006. With the spreading of Internet connections and online commerce, the proportion of domain name disputes of this type is expected to increase in coming years.