Cybersquatting is the practice of registering domain names incorporating trade marks of third party companies and then trying to sell the domain name back (for a handsome profit) to the trade mark proprietor. It's not going away - it's growing and it's a huge problem for trade mark proprietors.
The number of domain name disputes lodged in terms of the Uniform Domain Name Dispute Resolution Procedure (UDRP) that applies to .com, .net and .org domain names increased by 18% in 2007 compared to the number filed in 2006 and by 48% versus the number lodged in 2005.
The increase can be attributed to:
The rise of "pay-per-click" advertising, whereby cybersquatters associate the domain name they have registered with a website containing adverts promoting a variety of competing brands. Every time Internet users access this website and click on one of the adverts, the cybersquatter receives money.
Domain tasting, whereby cybersquatters register a number of domain names and then wait several days before paying for the domain names. They then count the domain names that attract the most Internet users and then pay for only for those. The remaining domain names are then deleted. Problem is, in the period between the cybersquatter registering and paying (or does not pay) for the domain name, it is reflected as being registered.
The use of privacy services by cybersquatters, who are thereby able to register domain names without revealing their identity to the general public. Cybersquatters can thus remain anonymous while trade mark proprietors must go to great lengths to establish the cybersquatter's identity.
The rise of "pay-per-click" advertising, whereby cybersquatters associate the domain name they have registered with a website containing adverts promoting a variety of competing brands. Every time Internet users access this website and click on one of the adverts, the cybersquatter receives money.
Domain tasting, whereby cybersquatters register a number of domain names and then wait several days before paying for the domain names. They then count the domain names that attract the most Internet users and then pay for only for those. The remaining domain names are then deleted. Problem is, in the period between the cybersquatter registering and paying (or does not pay) for the domain name, it is reflected as being registered.
The use of privacy services by cybersquatters, who are thereby able to register domain names without revealing their identity to the general public. Cybersquatters can thus remain anonymous while trade mark proprietors must go to great lengths to establish the cybersquatter's identity.
There are a number of steps that companies can take to combat cybersquatting, the most important of which is to develop a domain name registration and conflict policy.
Such a policy would clearly identify relevant criteria to determine which domain names should be registered, whose responsibility it is to administer them and in which countries they should be registered.
As a general rule, companies should ensure that companies register their trade marks and trading names in the countries in which they trade, thereby preventing third parties from launching a website to sell competing goods and services under a domain name identical to a company's trade marks and trading names.
Not only should a company continually ensure that its most important trade marks and trading names are registered as domain names, but it should continually monitor what domain names have been registered that incorporate its trade marks and trading names.
In short, companies must monitor the domain name space to check what domain names have been registered that might incorporate their trade marks and domain names.
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