Sharp Increase In Internet Domain Name Disputes Last Year, WIPO Says

By Stephen Flug for Intellectual Property Watch
The World Intellectual Property Organization (WIPO) said there was a 25 percent increase in “cybersquatting” complaints – the registering and use of domain names to profit from another party’s trademark – last year compared with the previous year, making this the highest number of cases since 2000.

A total of 1,823 cybersquatting complaints were filed in 2006. These cover disputes over generic top level domains, such as .com or .net, and country code top level domains, such as .ch (Switzerland) or .fr (France). Cases most commonly involve parties from the United States, although an overall 137 countries were represented last year, WIPO said.

“Domain names used to be primarily specific identifiers of businesses and other Internet users, but many names nowadays are mere commodities for speculative gain,” Francis Gurry, WIPO deputy director general, said in a release. With rapid change making it difficult for trademark owners to pursue cybersquatters, Gurry suggested a need for consideration of “concrete policy responses.”

WIPO cited the “evolution” of the domain name registration system – which is creating ample opportunities for the anonymous registration of names without regard to potential intellectual property rights of third parties – as the main cause for the 25 percent increase over 2005.

Complaints are filed and settled under the Uniform Domain Name Dispute Resolution Policy (UDRP), which was established as an arbitration wing under WIPO in December 1999. In the past, the UDRP process has succeeded in preventing and reducing the number of people registering domain names with the intention of selling them to third parties, WIPO said. Of the more than 9,000 UDRP cases involving generic top level domains received by WIPO so far, 84 percent of complaints resulted in a transfer of the domain name to the complainant.

Reasons for the increase include a major new practice by cybersquatters called “domain name tasting,” along with intense speculation such as following newsworthy events, the growth of newer domain names (such as .info), and the spread of new registrars (domain name retailers), WIPO said.

“Domain name tasting” involves an individual or entity registering a domain for a free five-day period and placing it on a pay-per-click website that has an index of other related sites. These cybersquatters register scores of similar website addresses (for example, with a typo), which generates revenue, and they continuously find new sites after these five-day trial periods expire. New computer software allows this to occur automatically. WIPO has tried to curb this practice through a panel decision issued in February 2006 which established liability where this automation process fails to protect third-party rights.

A recent example of WIPO ruling against domain name tasting is the 27 February 2007 decision against Philana Dhimkana (India). In this complaint, WIPO decided that in registering the domain name “boehringeringelheimpharmaceuticals.com” as a listing for other health sites, Dhimkana acted in bad faith by misusing the trademark of German pharmaceutical company Boehringer Ingelheim Pharma. The website was immediately ordered to be transferred over to the complainant.

WIPO said many disputes were filed over current events issues, like potential mergers or the release of new medications. This was especially apparent with the release of the avian flu treatment, Tamiflu, which led to the filing of 34 complaints covering 64 domain names.

Dispute categories mainly include luxury items, famous persons, entertainment, hospitality, sports, gambling, and pharmaceuticals, WIPO said.

Tove Iren S. Gerhardsen contributed to this story.

Stephen Flug may be reached at info@ip-watch.ch.