Strategies for dealing with cybersquatting and typosquatting

Companies in Poland are registering more domain names each year, but need to be aware of the potential dangers, say Anna Szajna and Maria Jurek.

Companies in Poland are registering more domain names each year, but need to be aware of the potential dangers, say Anna Szajna and Maria Jurek.Although ‘Internet domain fever’ may have peaked in most parts of the world, in Poland, the interest in domain names does not seem to be waning. For yet another year, the Internet domains market grew at a record rate. According to a report prepared by NASK (Research and Academic Computer Network—a national registry for .pl domain names), by the end of 2009, the number of .pl domain name registrations had reached 1.63 million. This represents a 25 percent increase on 2008 registrations. The number of domain registrations in 2009 exceeded those registered in 2008 by 300,000. Each day, 2,600 new domains were registered, which means that the registration of a new domain took place every 30 seconds. These results strengthened Poland’s fifth place in the TLD ranking among the EU member states for the number of registered domains. Poland now ranks ahead of other EU members such as France, Spain, Denmark, Belgium and Sweden.

Although most entities on the market know how significant it is from an economic point of view to register a domain incorporating a company name and/or a trademark, it is still common for owners to postpone or simply forget to register a suitable domain name, only realising their oversight when contacted by a third party proposing to sell them their rightful domain name at a high profit. Proposals of this kind usually come from cybersquatters who have registered a domain that incorporates a trademark in order to prevent the rightful owner of the mark from registering the domain in his own name. Subsequently, the registered trademark owner receives an offer to purchase that domain, usually at a high cost. The trademark owner is prevented by the cybersquatter from using the domain name that is most readily associated with his business by potential customers. As a result, the owner’s freedom to conduct business is restricted and the whole process generatesfinancial losses through distracting customers who are unable to find the trademark owner’s website. Trademark owners may also suffer in other ways, such as damage to the reputation of their marks.

Another damaging phenomenon is typosquatting: registering domain names that sound similar to or are misspellings of other popular and commonly known domain or company names. Typosquatting is based on the assumption that Internet users may accidentally misspell the name of a famous brand or trademark when typing its name into an Internet browser. The profits anticipated by typosquatters derive either from attracting potential customers who are deceived into visiting the typosquatters’ websites, which advertise or offer products or services that compete with those of the rightful holders of marks, or from subsequently reselling the rights to the domain names to the rightful trademark owners.