Cybersquatting disputes on the rise

There was an unprecedented number of cybersquatting cases in 2007 and the evolving nature of the domain name registration system (DNS) is causing growing concern for trademark owners around the world, according to the latest statistics from the World Intellectual Property Organisation (WIPO).

Last year, a record 2,156 complaints alleging cybersquatting – the abusive registration of trademarks on the Internet – were filed with WIPO’s arbitration and mediation centre. This was an 18 per cent increase over 2006 and a 48 per cent increase over 2005.

“These increases confirm that cybersquatting remains a significant issue for rights holders,” said Francis Gurry, WIPO Deputy Director General, who oversees WIPO’s dispute resolution work.

A number of developments in the domain naming system are also the 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 domains 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 Gurry.

This is not just an issue of protecting rights of trademark holders, but also impacts the reliability of the addressing system of the Internet in matching interested parties with authentic subjects.

Since the launch of the Uniform Domain Name Dispute Resolution Policy in December 1999 to December 2007, 12,334 cases have been filed with WIPO, covering 22,301 separate domain names. In 2007 alone, named parties to WIPO cases represented over 100 countries, The US, France and the UK remained the most frequent bases for complainants.

In 2007 English was the language of 89 per cent of WIPO case proceedings, 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). During 2007 the .com domain also remained the solid leader in terms of the number of complaints.

WIPO parties have settled a quarter of all cases without a panel decision. Of the remainder, 85 per cent of panel decisions have ordered transfer of the domain names in question to the complainant and 15 per cent of the complaints were denied, leaving the names in the possession of the registration holder.

The top five sectors for complaints were biotechnology and pharmaceuticals, banking and finance, Internet and IT, retail, and entertainment. 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.

Almost 1,000 companies are accredited to act as registrars for domain names. 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.