Cybersquatting Disputes Increase

The number of Internet domain name cybersquatting disputes filed with WIPO’s Arbitration and Mediation Center increased by 25 percent in 2006. Many related to trademarks which were attracting media coverage, such as a spate of cases involving the Tamiflu trademark, filed at the height of international concern about an avian flu pandemic.

New Practices Threaten Trademark Owners’ Interests

Commenting on the figures, WIPO Deputy Director General Francis Gurry drew attention to new practices in domain name registration which are threatening the interests of trademark owners. These include -

• the use of Whois privacy services for registrations;
• the growth in the number of professional domain name dealers and the volume of their activity;
• 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 for free for a five-day "tasting" trial;
• the growth in the number of accredited registrars; and
• the establishment of new generic Top Level Domains (gTLDs).

The combined result is to create greater opportunities for mass, often anonymous, registration of domain names without consideration of third-party IP rights.

"Practices such as ‘domain name tasting’ risk turning the domain name system into a mostly speculative market," said Mr. Gurry. "Domain names used to be primarily specific identifiers of businesses and other Internet users, but many names nowadays are mere commodities for speculative gain," he said. With mass-automated registrations turning domain names into "moving targets," Mr. Gurry called for consideration to be given to concrete policy responses.

Domain name tasting services enable a person or entity (who may be affiliated with a registrar) to register a domain name for a five-day grace period without a registration fee, and to park the name on a pay-per-click website monitored for revenue. The name is then dropped or re-registered by a new registrant, thereby starting a new grace period. Only those domain names generating significant traffic are permanently registered. As a result of computer applications, tens of millions of domain names are temporarily registered on this basis each month.

Traditionally, cybersquatting involved the registration of domain names by individuals seeking to sell the 'squatted' domain name. Nowadays, 'domainers' derive income from the large-scale automated registration of domain names. They acquire domain name portfolios, buy and sell domain names, and park domain names, claiming a significant share of the well over 100 million domain names that are now registered.

There is a rapid growth of domain parking sites, on which links to other sites are organized and indexed. These links usually operate on a ‘pay-per-click’ basis with registrants and parking services sharing revenue generated by web traffic. This is fueling rapid growth in ‘domaining’ and registrar activities.

Whois privacy services are allowing domain name registrations to be made through a proxy registrant, often a registrar-related entity. WIPO panel decisions are beginning to explore the practical implications for the Uniform Domain Name Dispute Resolution Policy (UDRP) of these developments, for example in terms of whether or not the privacy service discloses the identity of its client once the service has been alerted to concerns of trademark infringement.

The application of the UDRP decision criteria is already evolving to accommodate a number of such new developments. For example, WIPO panels have generally held that for a domain name to be transferred under the UDRP, there needs to be some indication that the registration was made with the intention of taking advantage of the complainant-trademark owner's rights in that name. With regard to bulk buyers of domain names using automated registration processes, a WIPO panel decision issued in February 2006¹ found that failure to conduct prior checks for third-party rights in certain circumstances would represent 'willful blindness,' representing bad faith under the UDRP. 

Based on WIPO Press Release no. 479 of 12 March

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1. Mobile Communications Services Inc. v. WebReg RN, WIPO Case No. D2005-1304; see also, Media General Communications, Inc. v. Rarenames, WebReg, WIPO Case No. D2006-0964