World Intellectual Property Organization

DNS Developments Feed Growing Cybersquatting Concerns

Geneva, March 27, 2008
PR/2008/544

Against the background of an unprecedented number of cybersquatting cases in 2007, the evolving nature of the domain name registration system (DNS) is causing growing concern for trademark owners around the world. Last year, a record 2,156 complaints alleging cybersquatting - or the abusive registration of trademarks on the Internet - were filed with the World Intellectual Property Organization’s (WIPO) Arbitration and Mediation Center (Center), representing an 18% increase over 2006 and a 48% increase over 2005 in the number of generic and country code Top Level Domain (gTLDs and ccTLDs) disputes (see Table 1). 

“These increases confirm that ‘cybersquatting’ remains a significant issue for rights holders,” said Mr. Francis Gurry, WIPO Deputy Director General, who oversees WIPO’s dispute resolution work, noting that a number of developments in the DNS are also cause for concern from the perspective of intellectual property holders, as well as Internet users generally. Among these, use of privacy services to shield abusive registrations and the evolving role of certain domain name registrars, together with the ongoing trademark abuse reflected in WIPO’s caseload, raise concerns about the introduction of a number of new gTLDs announced for late 2008.

“The potentially useful purposes of any new domains would be frustrated if these get filled predominantly with automated pay-per-click content,” said Mr. Gurry, adding “It comes down to a question of quantity versus quality. If the stated purpose of new gTLDs is to increase choice and competition in domain registration services, due consideration must be given to ICANN’s core UDRP principles during the policy development work and implementation plans. This is not just an issue of protecting rights of trademark holders, but also an issue of the reliability of the addressing system of the Internet in matching interested parties with authentic subjects.” Mr. Gurry said WIPO is ready to assist the Internet Corporation for Assigned Names and Numbers (ICANN) in its policy work in this regard.

WIPO Caseload

Since the launch of the Uniform Domain Name Dispute Resolution Policy (UDRP) – a quick and cost effective dispute resolution procedure – in December 1999 through December 2007, 12,334 UDRP or UDRP-based cases (gTLDs and ccTLDs) have been filed with the Center, covering 22,301 separate domain names. In 2007 alone, named parties to WIPO cases represented over 100 countries, with a significant jump in the number of respondent countries represented. The growth in respondent countries from 72 in the year 2000 to 96 in 2007 may in part reflect the expansion of Internet access across regions. The United States of America (USA), France and the United Kingdom remained the most frequent bases for complainants, while the USA, the UK and China remained the most represented countries by respondent party (Table 2).

In 2007 English remained the most common language for WIPO case proceedings (89.09%), reflecting the fact that the vast majority of domain names involved were registered with US-based registrars. Cases were also handled in French, Spanish, German, Chinese, Korean, Italian, Dutch, Japanese, Romanian, Danish, Portuguese and Swedish (listed in order of frequency). The character set of the disputed domain names remained overwhelmingly ASCII (English alphabet), with a small number of names in Chinese, French, German, Japanese, Korean, Norwegian, Spanish, and Swedish. During 2007 the .com gTLD also remained the solid leader in terms of the number of domain names included by complainants in cases filed with WIPO (73.62%), although by comparison to 2006 .com ceded some ground to the .net, .info and .mobi domains (Table 3). 

Collectively the number of disputed ccTLD domain names has been increasing over the years, having moved from less than 1% in the year 2000 to over 7% in 2007 (Table 4). Over the past year the number of ccTLD registries which have designated WIPO to provide domain name dispute resolution services has risen from 47 to 51 with the addition of Morocco (.ma), Nauru (.nr), Peru (.pe), and Saint Lucia (.lc).

Case Outcomes

WIPO parties have settled a quarter of all cases without a panel decision. Of the remainder, 85% of panel decisions have ordered transfer of the domain names in question to the complainant and 15% of the complaints were denied, leaving the names in the possession of the registration holder. In 2007, the cases were decided by 278 WIPO panelists appointed from 42 countries.

Areas of Complainant Activity

A truly diverse mixture of individuals and enterprises, foundations and institutions took advantage of the Center’s dispute resolution procedures in 2007. The top five sectors for complainant business activity were Biotechnology and Pharmaceuticals, Banking and Finance, Internet and IT, Retail, and Entertainment (Table 5). Pharmaceutical manufacturers remained the top filers due to numerous permutations of protected names registered for web sites offering or linking to online sales of medications and drugs. 

In 2007 WIPO domain name cases continued to reflect current trends and upcoming events (e.g., hybrid car technology;  the Airbus A380 double-deck wide-body jet;  the social network services Facebook and MySpace; the 2010 FIFA World Cup in South Africa; the comeback music tour of The Police); architectural landmarks (e.g., Agbar Tower (Barcelona), Burj Al Arab Hotel (Dubai), Madison Square Garden (New York City); charities, foundations, and museums (e.g., the March of Dimes, the Hitachi Foundation, the Frank Lloyd Wright Foundation and Lance Armstrong’s Livestrong Foundation, The Prince’s Trust, the British Museum); educational institutions (e.g., Harvard Business School, University of Auckland); sports teams, leagues and personalities (e.g., the American Football League and Superbowl, the Greek football team Panathinaikos, tennis star Björn Borg); actors and personalities past and present (e.g., Marlene Dietrich, Noel Coward, Oprah Winfrey, Martha Stewart, Xuxa, Eric Bana, Stella McCartney, Dire Straits); popular culture (e.g., J.R.R. Tolkien’s Hobbit, Fox Broadcasting’s Simpsons, Marvel Comics’ Silver Surfer);  and numerical identifiers (e.g., 4711).

Developments in the Domain Name Registration System

Domain Name Tasting

The practice of registering domain names during a five-day registration fee grace period for pay-per-click revenue remained a significant concern for rights owners in 2007. Frequently involving trademarks, the often automated practice of “tasting” effectively prevents rights holders from assembling reliable and timely information that would enable the filing of a UDRP complaint, leading them in some instances to resort to court litigation, especially in the USA. In recent months ICANN has announced plans which may ultimately alleviate concerns that WIPO and other stakeholders have been voicing in recent years about abusive tasting. Likewise private enterprises such as Google have announced that they are in the process of implementing technology that would exclude repeatedly registered and dropped names from their lucrative advertising programs, showing that technology not only opens possibilities for abusive behavior, but can also provide tools to limit it.

Privacy or Proxy Registration Services

The Center faces an increasing number of cases where respondents are making use of privacy or proxy registration services. Recent WIPO panel decisions have pointed out that a privacy shield should not be used to protect cybersquatting practices. Panels have recognized legitimate uses of such services, but also make it clear that the shielding of information can create difficulties for panelists, parties and providers in determining the identity of the domain name registrant for cases brought under the UDRP (WIPO Case No. D2007-1438). Panels have also found that privacy services should not shield registrants from knowledge of proceedings to which they may be a party as a result of their own conduct. A panel decision in March 2008 noted that “such shielding would in effect undermine a registrant’s undertaking in its registration agreement to refrain from knowing infringement of trade mark rights in a registered domain name … [and] would fly in the face of a registrant’s promise that in the event of any conflict, it be bound by the ICANN-mandated UDRP.” (WIPO Case No. D2007-1854)

Registrar Issues

Close to 1,000 companies have been accredited by ICANN to act as registrars for one or more gTLDs. This enormous increase from only a handful of registrars in the year 2000 raises heightened concerns about cases where certain registrars appear to engage in or collude with cybersquatting practices. This situation can blur the distinction between the ICANN-mandated obligations of a registrar and speculative behavior in the domain name marketplace, often at the expense of trademark holders. In certain instances the intended functioning of the UDRP is frustrated by non-compliant domain name registration provisions, the failure by a registrar to provide complete or correct registration information for a filed UDRP case, simple uncontactability of the registrar, ‘cyberflight’- related or other modifications to registrant data after a complaint is filed, and in some instances, failure to properly implement transfer decisions. Rights holders, panels and the Center have felt the effects of the increasing complexity posed by these developments. 

Expanded WIPO facilities

Since the year 2000 all panel decisions are posted on the Center’s website. To facilitate access to these decisions according to subject matter the Center also offers a unique online legal Index. This Index has become an extremely popular professional resource, allowing panelists, parties, academics or any interested person to familiarize themselves with WIPO case precedent, and is one of the Organization’s most visited web pages. In 2007 the Index underwent further expansion with new search categories that primarily reflect developments in the Domain Name System itself. New Index categories include Use of Privacy Service; Registrar Issues; Use of Dictionary Term; Automated Registration; Advertising Revenue Arrangements; Unauthorized Acquisition of Domain Name; Privacy; and Delay in Bringing Complaint. In addition to its Legal Index, the Center also offers an overview of broad decision trends on important case issues, via the WIPO Overview of WIPO Panel Views on Selected UDRP Questions which distils thousands of UDRP cases handled by the Center. The Overview is an important instrument to help maintain the consistency of WIPO UDRP jurisprudence. The Overview is available at http://www.wipo.int/amc/en/domains/search/overview/index.html.

In 2007 the Center introduced on its web pages an extended statistics search facility in relation to WIPO domain name dispute resolution, intended to assist WIPO case parties and neutrals, trademark attorneys, domain name policy makers, the media and academics. Available statistics cover many categories, such as “areas of complainant activity”, “named respondents”, “domain name script” and “25 most cited decisions in complaint”. Online, this new facility may be found at http://www.wipo.int/amc/en/domains/statistics/. Dynamic linking to the Center’s case management database ensures that results are as up-to-date as possible.

.mobi and .asia gTLDs

In 2007 the Center crafted an unprecedented new policy at the request of and in collaboration with the registry DotAsia Organization. The introduction of a Pioneer Application period, a novelty in the Domain Name System, allowed for pre-sunrise registrations by certain categories of parties (e.g., developers of generic names) based on supported proposals, and the Challenge procedure allowed third parties to challenge selected proposals. Further information can be found at http://www.wipo.int/amc/en/domains/gtld/asia/index.html

Earlier in 2007 WIPO also concluded its work on case administration under the Sunrise Challenge Policy and Premium Name Trademark Application Rules for the .mobi gTLD, mechanisms created by the Center in collaboration with the .mobi registry operator. The Center outlined the policy and processing issues encountered during the administration of .mobi challenges and applications in a Report available at the Center’s web pages (http://www.wipo.int/amc/en/domains/reports/mobi).

WIPO Arbitration and Mediation of Intellectual Property Disputes

In addition to processing domain name disputes, the Center administers the WIPO Arbitration, Expedited Arbitration, Mediation and, new in 2007, Expert Determination Rules, which parties to commercial contracts can designate for disputes that may arise out of any type of intellectual property and technology transaction which they conclude. The Center’s growing caseload includes licensing disputes in the area of patents (e.g., in biotech, pharmaceuticals, or medical technologies), disputes concerning information technology, research and development issues, and cases in the area of entertainment.

The recently instituted Expert Determination procedure has been designed to allow parties to consensually submit a dispute or difference to one or more experts for determination, which is binding unless the parties agree otherwise. Notable features of WIPO’s Expert Determination Rules include the parties’ option to choose experts with relevant expertise, and the confidential, more informal and expeditious manner of the procedure.

More information about this area of the Center’s work is available at http://www.wipo.int/amc/en/center/background.html and at http://www.wipo.int/amc/en/center/caseload.html.

In 2007 the Center and parties also made good use of the WIPO Electronic Case Facility (WIPO ECAF) in some of the most complex cases filed with the Center. Developed in-house, WIPO ECAF is a web-based application that allows parties under the WIPO Mediation, Arbitration, Expedited Arbitration and Expert Determination Rules to support the conduct of their case with state-of-the-art information technology. Further information on ECAF’s features and utility is available at http://www.wipo.int/amc/en/ecaf/. Following a request from the America’s Cup Management, WIPO also created a customized version of ECAF to facilitate efficient dispute resolution under the America’s Cup Jury Rules of Procedure. For the 32nd America’s Cup yachting competition, 35 cases were filed using the WIPO customized web facility, including a number of cases related to intellectual property such as designs and trademarks. This experience has driven further improvements in the regular WIPO ECAF system, helping to confirm WIPO’s pioneer position in the area of online dispute resolution.

Background on UDRP

The UDRP, which was proposed by WIPO in 1999 and has become accepted as an international standard for resolving domain name disputes, is designed specifically to discourage and resolve the abusive registration of trademarks as domain names. Under the UDRP, a complainant must demonstrate that the disputed domain name is identical or confusingly similar to its trademark, that the respondent does not have a right or legitimate interest in the domain name and that the respondent registered and used the domain name in bad faith.

Disputes are decided by independent panelists drawn from the Center’s list of trademark specialists. The domain name registration in question is frozen (suspended) during the proceedings. After reviewing each case, panelists submit their decisions within a period of 14 days. If a panelist’s decision to transfer a domain name is not challenged in court within a period of ten business days, the registrar is legally bound to implement the panelist’s decision.

 

Table 1  

Total Number of WIPO Domain Name Cases per Year 

Year Number of Cases
1999 1
2000 1857
2001 1557
2002 1207
2003 1100
2004 1176
2005 1456
2006 1824
2007 2156

 

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 Table 2

WIPO Complainant Country Filing

Country
Number of
Cases
Percentage
of Cases
United States of America
5741
44.97%
France
1308
10.25%
United Kingdom of Great Britain and Northern Ireland
969
7.59%
Germany
718
5.62%
Switzerland
641
5.02%
Spain
587
4.60%
Italy
399
3.13%
Canada
248
1.94%
Australia
224
1.75%
Netherlands
216
1.69%
Sweden
174
1.36%
Japan
153
1.20%
India
127
0.99%
Denmark
104
0.81%
Brazil
102
0.80%


WIPO Respondent Country Filing

Country
Number of
Cases
Percentage
of Cases
United States of America
5125
40.15%
United Kingdom of Great Britain and Northern Ireland
1089
8.53%
China
640
5.01%
Canada
616
4.83%
Spain
582
4.56%
Republic of Korea
553
4.33%
France
382
2.99%
Australia
300
2.35%
Italy
199
1.56%
Switzerland
179
1.40%
Russian Federation
175
1.37%
Germany
171
1.34%
Netherlands
160
1.25%
India
155
1.21%
Bahamas
147
1.15%

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Table 3

  gTLDs in WIPO Domain Name Cases 

GTLDs
Number of Domain Names
Percentage
.com
2424
73.59%
.net
287
8.71%
.info
245
7.44%
.org
227
6.89%
.mobi
62
1.88%
.biz
38
1.15%
.name
7
0.21%
.cat
4
0.12%

 

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Table 4

 ccTLDs Among Total Domain Names in WIPO Cases

Type
Number of Domain Names
gTLDs
3298
ccTLDs
251
Total:
3549

 

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Table 5

Areas of WIPO Domain Name Complainant  Activity

Industry and Commerce
(decided cases by percentage)

Categoy
Percentage of cases
Biotechnology and Pharmaceuticals
10.04%
Banking and finance
9.53%
Internet and IT
9.34%
Retail
7.76%
Entertainement
7.06%
Food, Beverages and Restaurants
7.03%
Hotels and Travel
6.24%
Media and Publishing
6.24%
Fashion
6.07%
Telecom
5.29%
Automobiles
4.68%
Electronics
4.17%
Heavy Industry and Machinery
3.72%
Other
3.45%
Transportation
3.10%
Sports
2.70%
Luxury Items
1.90%
Insurance
1.68%

 

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