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Cyber Squatting


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A major problem surrounding domain names is the activity known as cyber-squatting. This began almost as soon as the internet took off as a commercial entity, individuals and organisations that had no rights in a particular well known trade name would register appropriate domain names compromising of the trade name before the legitimate owner could do so. The so called ‘cyber-squatter’ would then approach the legitimate trader and ask for large sums of money in payment for the registered domain name. The courts have showed a willingness to allow actions for passing off and trade mark infringement in such ‘cyber-squatting’ cases , but equally they have accepted that there may be more than one party with a legitimate claim to the same domain name see for example the cases of MBNA , FCUK , easyjet and Phones 4u .

So with a degree of confusion within the court system the industry has developed its own processes for dispute resolution. The major dispute resolution procedure used as an alternative to litigation in relation to domain name disputes is the Internet Corporation for Assigned Names and Numbers (ICANN) Uniform Domain Name Dispute Resolution Policy (UDRP), which is administered by WIPO (World Intellectual Property Organisation).

ICANN was introduced in 1998 and in the following year 1999 developed and implemented the UDRP in order to save costs and time in international domain name disputes. The UDRP sets out certain circumstances in which domain name disputes will be subject to mandatory administrative proceedings. Unlike traditional arbitration UDRP has no binding effect other than on the registrar of the domain name in question, in effect the UDRP creates a contract between the parties. ICANN’s policy and procedures are incorporated into a subscribers internet registration agreement this has the effect that by making a complaint to ICANN the complainant automatically enters into arbitration proceedings. Proceedings under UDRP are carried out by four approved bodies: WIPO (Word Intellectual Property Organization), NAF (National Arbitration Forum), CPR (Institute for Resolution) and ADNDRC (Asian Domain Name Dispute Resolution Centre). Various countries around the world also use derivatives of the UDRP for their own domain name levels for example Nominet in the UK.

Any person (or entity) may make a complaint under UDRP to one of the above bodies via email or hard copy (this flexibility is one of the benefits of the dispute resolution), there is no requirement for legal representation (lowering costs) and except in special circumstances there is no physical hearing instead the process is ‘paper-based’ this saves considerable time and expense and bearing in mind the international context of the internet is the only feasible way. When issuing the complaint it is for the complainant to chose whether the case is to be heard by a panel of one or a panel of three, this is one of the major criticisms of the process as it is considered that the three member panel is fairer but the costs become higher. It is up to the complainant to show the following:

  • A domain name is either identical or confusingly similar to a trade mark this includes both registered and unregistered ‘common law’ trade marks ,
  • The holder of the domain name has no rights or legitimate interest in the domain name .
  • The domain name has been registered and is being used in bad faith (for example selling it for a price exceeding the registration cost .

All of which must be included within the initial complaint and are subject to a word / page count of between 3,000 and 5,000 words or 10 pages. Upon the receipt of the complaint the respondent has 20 days to issue their response showing the opposite to that of the complaint, following which the panel will issue its decision 14 days after forming unless the parties agree prior settlement. The panel must make a decision based upon UDRP rules and any law deemed appropriate, if both parties are based in the same country then this will be the rules and principles of the national legal system, as such any court decisions of the relevant country will have to be taken into account. The panel has the power to cancel an infringing trade mark or transfer it to another party, UDRP does not provide for fines or punitive damages.

Dispute resolution has various benefits in comparison to engaging in litigation: it is quick in comparison to litigation (procedures take place in the form of written submissions) theoretically cases last between 47 and 57 days, cheap (the fees vary but are between $1500 and $5000, compare this to court proceedings which could cost a small fortune in solicitors fees alone) and they are expeditious (the majority of cases are finalised within two or three months compared to potentially a number of years where court proceedings are involved) enforcement of the panels’ decisions is also a very quick process and provides a major breakthrough especially where undeveloped or insecure countries are concerned.

Ben Evans is an Intellectual Property Executive at Lawdit.

About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.

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Article Published/Sorted/Amended on Scopulus 2008-05-28 23:24:10 in Legal Articles

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