Thursday, May 26, 2011

Cyber Squatting

            Since the inception of the internet in the 90’s the information super highway has grown at exponential proportions. Laws often times have trouble catching up with new advancements with technology. Disputes over intellectual property and domain names on the internet have been an ever evolving issue since the late 1990’s. As almost every business looks to put more information on the internet, disputes over domain names have become more common. Domain names are an address on an internet host that is owned by an individual or a company.  Typically, web pages are displayed under the owner’s domain name to represent that business or genre whatever it may be.  Today as almost every business or individual moves more information to the internet it has become harder not to cross some wires when setting up similar domain names. 
            The internet has established many new top level domain names to allow businesses or individuals to correctly find a domain that would suite their webpage or brand.  Examples of top level domains are .com, .net, org., .edu and .gov.  These are the primary domains most internet users look to at this point.  However, many additions include geography such as .us, .la or .nj.  As more extensions become available it becomes very easy for businesses to have the same domain name with just a different extension on the end.
            As of December 1999, the ability to register .com, .net and .org domains was spread out among many registers.  These registrars are accredited by ICANN.  ICANN is the Internet Corporation for Assigned Names and Numbers.  It is a non-profit corporation formed to control Internet domain name management.  Anyone can purchase a domain name from an individual registrar.  They are assigned on a first come, first serve basis and there are no validation checks to see if you are associated with the business you registrar your domain name under.
            Many people as well as companies have realized the importance of having your company name or product name as your domain name on the internet.  This is very important for search engines as well as building a brand on the internet.  However, one needs to search on a registrar to see if the domain they choose is still available and has not been registered by someone else.  When a company finds that the domain name corresponding to their corporate name or product trademark is owned by someone else, the company can either choose a different name or fight to get the domain name back from its current owners.
            In the late 1990’s early 2000’s their became a rush for internet domain names.  Many people were hoping to strike it rich by purchasing a company domain name and selling it back to the company for very high profits.  ICANN was created to solve a lot of these disputes.  The main driver they look for in domain registration fraud or cyber squatting is to question whether the individual registered the domain name in bad faith or not.  Thus, they look to see if this person was planning on using the site to develop or legitimate business purposes or using to sell back to a well known product or company. 
            When a dispute over a domain name occurs parties can generally turn to ICANN and the court systems.  Courts and judges have the authority to award control and ownership over a domain to a new party if they deem a violation has occurred.  However, at times this can be very hard to prove and the process can be very slow.  You will find a lot of cases that are settled out of court.
The practice that's come to be known as cyber squatting originated at a time when most businesses were not savvy about the commercial opportunities on the Internet. Some entrepreneurial souls registered the names of well-known companies as domain names, with the intent of selling the names back to the companies when they finally woke up. There have been many rags to riches stories of cyber squatters who bought a business name or highly searched product name and sold it to a large commercial business for an exuberant amount of cash.  Opportunities for cyber squatters are rapidly diminishing, because most businesses now know that nailing down domain names is a high priority. 
However, with a lot of new domain extensions it can make it very easy to confuse whose website is whose.  A good example of this is when you go to the website.  Most people associate Nissan with the very large car and truck company.  However, there is an unknown smaller company that was started awhile ago by a Mr. Uzi Nissan that sells Computer services.  The website for the car company is  This will continue to be get very interesting as the internet continues to evolve. 
Google is constantly trying to find ways to better help people search for the exact items they are looking for with their keyword search tools.  The advance of this tool has also helped protect against cyber squatting.  Most people today do not type in an exact web address to find a website.  They search for the product in Google or another search engine.
However, the problem is starting to arise again now that a lot of new generic level domain names have been released.  A lot of the search engines are now trying to add location into your searches to help guide your further.  Their has now been a lot of domains issued for each country so that companies can register a domain there to show they do business there.  With this now opening up we see that people are again trying to buy a company name with .us or .pp behind them in hopes that this company will need a domain for that country.  .Us would stand for the United States and .pp would stand for the Philippines.
There are much better rules in place this time around, however, the process with law is very slow and sometimes companies may rather just pay a small fee to get the domain name they desire even if it is a lot higher than the original owner paid for it.  Another infringement of trademark domain names is if an individual tries to spell the name so close to a well known name that they actually get a lot of traffic from the misspelling.  Also that traffic has to be web traffic that was intending on going to the original site or trademark but was directed to yours because of the misspelling.  An example of this would be buying the domain name in hopes that people would type an extra o to come to your site instead of   Sometimes squatters will also try to gain cyber traffic by using a well known domain name and just adding a hyphen.  An example would be to use TradeStock.Net as hoping to get some traffic from the more well known website.  This can also be a form of cybersquatting.
Anyone who owns or has registered more than a handful of domain names has probably owned one or more names that infringe on the trademark of another company, whether its intentional or unintentional. Figuring out what domain names are dangerous to a domain portfolio is a big part of doing business as a domain investor.
Sometimes blatant trademarks pose no threat because the trademark holder doesn’t seem to care, and other times seemingly generic domain names become issues when overreaching companies attempt to take domain names using the legal system or threats of the legal system. You need to be aware of the risks involved with domain investing before jumping into the virtual real estate landscape.
When thinking about registering a domain name it is best to checks with different websites if it infringes on any trademarks. and can run checks to see if a domain infringes on any trademark issues.  One can also try to speak to a lawyer or a serious domain investor. As the internet continues to grow around the world I suspect there will be many more issues the law will need to catch up with besides domain names.  It will be interesting to watch it grow and see how different parties or companies try to exploit it for monetary benefits.