What's in a name?Overpaying for your web presence

A growing global problem
The price of a name
The evolving law
Courtroom dramas
What's next?

A growing global problem.

According to a June 2000 report by the World Intellectual Property Organization (WIPO) in Geneva, Switzerland, 53 countries were involved in alleged cybersquatting cases between January and June 2000. The report also found that geographical distribution of cases mirror global Internet connectivity. The largest number of cases - more than half of complainants (229) and respondents (332) - involve parties from the United States. Overwhelmingly, trademark holders win over homesteaders. Of the 179 decisions made, 147 led to the transfer of the domain name to the complainant.

In the first three months of 2001, the WIPO reported 155 complainants and 145 respondents in the United States, which is proportionately higher than the same time last year. More countries also reported incidents this year, including Croatia, Liechtenstein, Moldova and Morocco.

"It's a huge issue internationally," says Laurence Ward, partner and head of the U.K. Technology group for Andersen Legal. He recognises cybersquatting as a "very big issue in the U.S." and believes it will only happen with more frequency as businesses operate globally and domains become more important in each country.


The price of a name

Registering a domain name with a legitimate registration company is easy and inexpensive. It may cost US$50-$100 and involve some simple forms to register an unencumbered name with a company such as U.S.-based Network Solutions, the largest domain registration company in the world. The cost of buying a name back from a cybersquatter may be much, much higher. And many businesses see no alternative to paying cybersquatters.

"We've seen people paying into the hundreds of thousands of dollars to get their trademarks back," says Ward. He believes the cost of obtaining a domain name from a cybersquatter can be as high as the cost of litigation.

Pinky Brand, director of market development for Verisy Corporate Domain Name Services, the parent company of Network Solutions, said in a recent interview, "It's far cheaper to be proactive than it is to be defensive. Make sure you lasso in all the domain names that you've got. Then make sure you have a plan in place to register and protect and maintain those names moving forward."

Brand could not place a monetary loss of business to cybersquatting, saying, "In everyday terms, a loss of traffic [to your site] can be in the millions of dollars depending on your particular e-commerce initiatives. ..."


The evolving law

Internet laws are developing and vary around the world, but lawsuits regarding domain rights usually center on trademark law, one of the oldest consumer protection systems. Like patents, trade secrets and copyrights, trademarks are classified as intellectual property.

Most legislation regarding cybersquatting has been enacted in the United States and could impact future laws in other countries. Italian legislators modelled their draft law on Internet domains and cybersquatting on existing U.S. anti-cybersquatting legislation. And U.S. legislation may influence the registration of domain names in Ireland, cites an article published in the Irish Times.

While countries look to the United States for anti-cybersquatting laws, they also have the luxury of fashioning their own laws after witnessing the pitfalls of American legislation, possibly making their own policies more effective.

China, whose trademark laws have historically been more lax than their European and American counterparts, has imposed stringent laws against the practice of cybersquatting. In November 2000, the Beijing Municipal Administration of Industry and Commerce issued a statement, saying "It will inflict severe punishment on cybersquatters who violate China's 'Advertisement Law' and the 'Law Against Unfair Competition," according to China Online.


Courtroom dramas

One case fought in an American courtroom involved the group PETA (People for the Ethical Treatment of Animals). PETA filed suit on grounds of trademark infringement against a man who registered a web site under the domain name of "peta.org." On the site, PETA stands for "People Eating Tasty Animals," which he fraudulently represented as a non-profit organisation.

The judge found in favor of PETA based on three criteria: (1) The man's use of peta.org constituted trademark infringement. (2) The value of the PETA trademark was diluted by the man's use of it. (3) The man was in violation of the "Anticybersquatting Consumer Protection Act" because he used the famous PETA mark for his own commercial benefit.

According to PETA's web site, the judge ruled that the individual "had the requisite bad faith intent" to profit from PETA's mark. [He] clearly intended to confuse, mislead and divert Internet users into accessing his web site, which contained information anti-ethical and, therefore, harmful to the goodwill represented by the PETA mark."

Businesses and organisations are not the only ones witnessing the effects of cybersquatting. Famous people have sued homesteaders for rights to their name, and won.

Such is the case for British writer Jeanette Winterson, who won back the trademark rights to her name from a philosophy research student at Cambridge University. The student registered about 130 other names of famous authors in addition to Winterson's.

And to prove that no one is immune to cyberpiracy, the Information Technology Minister of India, Pramod Mahajan, found himself a victim. Pramodmahajan.com was registered by a resident of Mumbai.
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What's next?

While cybersquatting has become a global issue, not all countries have the same degree of penalties, or even the same ways of enforcing and establishing Internet laws. This will become an increasing problem as technology shrinks the world and international businesses expand their use of the Internet in e-commerce. With no tangible boundaries encasing the World Wide Web, whose laws should international companies be forced to follow?

As more cases come to court, issues will be clarified and laws will change. For now, much remains undecided - except plenty of people in courts and offices around the world are talking about cybersquatting.