Knowing your enemy: cybersquatting and new gTLDs

Domain names are vital to brands and trademark holders. Th ey are easy to register and sold on a fi rst come, fi rst served basis—and anyone can buy one. With nearly 300 country (.de, .co.uk, etc) and generic extensions (.com, .net, etc), there are infi nite possibilities. Abusive domain registrations (cybersquatting) will be on the increase due to the 1,930 applications received by the Internet Corporation for Assigned Names and Numbers (ICANN) for the creation of new generic top-level domains (gTLDs).

From traffic hijacking to counterfeit e-commerce sites, there are many different forms of cybersquatting, all of which present a major problem for brands.

Trademark holders can use established outof- court procedures in order to protect their brands online and deal with abusive domain names. Uniform Domain Name Dispute Resolution Policy (UDRP) proceedings arejudged by international arbitration centres such as the World Intellectual Property Organization (WIPO), the National Arbitration Forum, the Czech Arbitration Court and the Asian Domain Name Dispute Resolution Centre.

Arbitration decisions are made according to the following criteria:

• The registered domain name is identical or sufficiently similar to cause confusion with an existing brand; and

• The complaint respondent and owner of the domain name has no rights over the brand and no legitimate interest in the brand; and

• Thedomain name was registered and is used in bad faith.

Complainants pay the cost of the arbitration procedure, which is approximately $1,500depending on the arbitration centre that is used, the number of panellists and the number of disputed domains. A UDRP in favour of the complainant results in the cancellation of the domain registration or its transfer to the complainant. There are no awards for damages or costs made to the complainant.

The White Paper on Cybersquatting published by the online brand-monitoring platform Keep Alert revealed that 90 percent of decisions from the main arbitration centres in 2011 were in favour of the complainant, who requested the transfer of the domain name in 99 percent of cases.

The name’s the thing

Fifty-nine percent of litigious domain names contain a brand name that is associated with a generic search term. The most popular terms are ‘online’ (4.3 percent of UDRP decisions in 2011), ‘buy’ (3.3 percent), ‘shop’ (3.2 percent),‘sale’ (2.4 percent) and ‘www’ (2.3 percent). Cybersquatters also use terms that are related to the activity of the brand they are targeting so that their domains appear relevant, and sometimes even official.

Twenty-five percent of all arbitration complaints concern domain names that are identical to the brand.

Sixteen percent concern cases of typosquatting where the domain name has been misspelled or had letters added.

Uses of fraudulent domain names

Ninety-one percent of domain names in UDRP cases are active and 9 percent are inactive.

Traffic hijacking is the most common form of cybersquatting. More than 50 percent of cases studied for the white paper redirectweb users to a ‘parking’ page. These pages have sponsored links that redirect users to other websites. The cybersquatter receives a payment every time somebody clicks on one of the ads.

Other types of abuse all have serious financial consequences for brands. Counterfeit e-commerce sites represent 6 percent of all cases. Businesses can also have their reputations tarnished by domain names with websites that attack their brand or contain adult content. Pornsquatting represented 1 percent of WIPO procedures in 2011.

Protecting your brand online

Some trademark holders have a zero tolerance policy regarding abusive domain name registrations, and engage UDRP procedures against every domain name that uses their brand. ‘LEGO’ alone accounts for 5 percent of all WIPO UDRP decisions in 2011. This however, is a strategy that is both costly and ineffective if trademark owners then abandon the domain names they have recovered, as they are immediately registered again by cybersquatters.

"Brands can be faced with a very large number of litigious domain registrations and it is not always financially viable for them to take action in every case."

Businesses need an effective domain name protection strategy. What are the relevant country codes? What are the spelling variations of their brand? What are the internationalised domain name (IDN) translations of the brand name?

This domain name protection strategy is then applied to an online surveillance programme that identifies potentially litigious domain names that have been registered. This surveillance not only detects identical domain name registrations, but also similar and approximate spellings of the brand name (typosquatting) and monitors the websiteitself, detecting any changes in its use. Brands can be faced with a very large number of litigious domain registrations and it is not always financially viable for them to take action in every case. If a domain name that is registered reverts to a registrar landing page it is not highly prejudicial to the brand owner, but they need to know quickly if the website becomes a counterfeit e-commerce site.

Litigious domain names that have been detected need to be categorised and tracked according to their use: e-commerce site, parking page, registrar landing page, redirection, adult content, inactive, etc, in order to concentrate efforts on the websites that present a real and serious threat.

The online brand-monitoring platform Keep Alert automates this type of domain name monitoring. Monitoring results are provided with time-stamped screenshots and automatic categorisation of the type of web page hosted. Keep Alert detects and alerts you to the creation of new domain names, abandoned domain names or those that have changed in use and content.

The platform covers all generic and country extensions as well as second level country domains, totalling some 750 domain name extensions. The new gTLDs will be added to the platform as they are delegated by ICANN.