New cybersquatting practices mean increase in infringement


The World Intellectual Property Organization (WIPO) has released figures indicating that cybersquatting is still on the rise.

New domain name registration practices are resulting in increasing problems for trademark owners. Traditionally, cybersquatting involved the registration by individuals of domain names including a well-known name or trademark with the intent of selling the domain name to the rightful owner. As a result of automated procedures, cybersquatting is now occurring on a large scale by big business and in many cases without specific intent by the registrants to target a particular name.

Three new domain name registration practices in particular are causing problems for domain name owners:

  • The use of computer software to register domain names automatically (including recently expired names). These domain names are then used to host 'pay-per-click' portal sites with revenue generated by through traffic shared by the domain name owner and the 'pay-per-click' advertisers.

  • The option to register domain names for no fee for a five-day 'tasting' period. The registrant may hold the domain name for five days, without payment of a registration fee, and park a 'pay-per-click' portal website monitored for revenue during this time. If the site does not generate revenue the domain name registration is not completed and may be registered by another speculator for a new tasting period. It is estimated that millions of domain names are registered on this basis each month.

  • Use of Whois privacy services which allows domain name registrations to be made through a proxy registrant thus making law enforcement or administrative challenge more difficult.

In the absence of policies specifically to address these issues WIPO panellists are finding ways to apply the ICANN (Internet Corporation for Assigned Names and Numbers) Uniform Domain Name Dispute Resolution Policy (UDRP) to these new circumstances. In Mobile Communication Service Inc v WebReg RN, it was found that failure to conduct prior checks for third-party rights thus "closing one's eyes" to whether the domain name was confusingly similar to trademarks may, in certain circumstances, represent bad faith under the UDRP.

Several country-code domain name administrators have taken further steps towards addressing these issues. For example, in Australia auDA has implemented a domain name Monetization Policy and a Misspelling Policy. The Monetization Policy prohibits registration of domain names for the purpose of establishing monetized websites where the domain name contains a brand of another in existence at the time the domain name was registered. The Misspelling Policy prohibits the registration of a domain name which is a misspelling of a company or brand name in cases where the registrant has deliberately registered the misspelling in order to trade on another's reputation or goodwill. In the United Kingdom, as a means to avoid problems associated with domain 'tasting', registrars may not cancel more than a certain percentage of domain names per registrant in any given month.

The domain name system is currently experiencing an evolutionary stage which has seen the commoditization of domain names for speculative gain. While existing domain name policies are adapting to cater for the new environment, specific policy responses are required.

Sally Foreman and Michael Wolnizer, Davies Collison Cave, Melbourne

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