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.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.
Remedies
Recognisable brands should be aware of the threats from criminal activities on the Internet, including cybersquatting and typosquatting. Nowadays, with nearly unlimited access, the Internet has become a powerful tool for business promotion, brand building, commercial activity and providing services. Therefore, it is crucial for each company to have its own, easily recognisable Internet domain name or address, without which it is difficult to run a business successfully, particularly when so much depends on the timely presentation of information about the company and its products. The greatest initial value and marketing impact will be attached to domain addresses that incorporate names, company marks or trademarks that are already well known to customers. This is why it is important toregister a domain name immediately after filing an application for a trademark registration.
A party whose rights to a domain have been infringed may simply repurchase the domain name (usually at a high cost) or take appropriate legal action. Disputes over .pl domain names are examined in Poland by one of the arbitration courts—the Arbitration Court at the Polish Chamber of Information Technology and Telecommunication or the Court of Arbitration at the Polish Chamber of Commerce— or by a common court. The arbitration courts can only deal with disputes over infringement of rights resulting from the registration of .pl domains. The case can only be examined by the arbitration court if at least one of the parties has a seat of business or a place of residence in Poland. If none of the parties is domiciled in Poland, the domain name dispute will be examined by WIPO’s Arbitration and Mediation Center in Geneva, where WIPO’s Expedited Arbitration Rules for Uniform Domain-Name Dispute-Resolution Policy (UDRP) under .pl are applicable.
Action before the arbitration courts has several advantages: fast procedure (email filing of documents is possible); less procedural formality; and lower costs compared to common court proceedings. It is important that arbitrators are appointed from among the best-qualified experts in Internet law, Internet domains and industrial property. Proceedings before the arbitration courts may follow two routes: mediation or arbitration, with the latter occurring after the statement of the claim. The arbitration court then notifies NASK about the dispute. This notification is important, as it prevents the domain name being passed to another owner for the duration of the dispute. A valid decision by one of the arbitration courts, or a common court, ruling that infringement ofthe plaintiff’s rights has occurred as a result of the registration and use of an Internet domain name is used by NASK as a basis for terminating the infringing registration and reregistering the domain in the plaintiff’s name.
Preventive measures
In order to avoid problems resulting from cybersquatting, it is advisable to register a portfolio of domain names with the largest possible number of extensions. The availability of domain names for registration in Poland can be checked through the registrars’ websites. These usually provide search tools for entering domain names together with the appropriate extensions (for example, .pl, .com.pl, .net.pl, .info.pl) to check their availability for registration. The search should take no longer than a few seconds and will reveal all the available extensions with which a given domain name can be registered. Since 2007, it has also been possible to use the Domain Name Testing service, which involves registering a domain name for 14 days to check its potential marketability and profitability for the holder through ‘domain parking’—holding a domain name even when there is no completed website at the address.
Domain names must be registered for at least one year. Most domain name registrars send holders several reminders about the approaching expiry of their domain registration. To protect against losing access to one’s own website or domain name, it is essential to keep the domain administrator updated with contact information and to monitor timely renewals of the domain name. Domain names registered with the Polish registry are subject to a 14-day waiting period after they expire. During this period, a domain name may be returned to its previous holder. However, a domain name can go to the pool ofavailable domain names earlier than 14 days after its expiry and can be registered by another party. In this situation, the previous owner will find it costly and difficult to regain the domain name.
Some registrars allow third parties to reserve a domain name that is currently registered in the name of another subscriber. As soon as that domain name becomes available for whatever reason, for example failure to pay the subscription fee or abandonment of the domain, it is automatically reserved in the name of the holder of a valid ‘domain name option’.
It is important to note that domain names are registered on a ‘first come, first served’ basis. The list of domains that are about to expire, together with the expiry dates, is available to the public. This enables Internet domain name investors to snatch the most attractive addresses within a few seconds of the expiry of a registration.
The lack of a domain name may be harmful to a company’s image. It is enough for a domain name to be missing for a few hours to generate losses to the company and weaken its reputation. Longer failures in access to a company’s website or email can result in the loss of customers—both current website users and potential users who are unable to reach the company’s product and eventually turn to competitors’ sites. Cybersquatters’ or typosquatters’ illegal actions result in losing potential customers who may be distracted and never find the company’s original website. It is vital to take good care of one’s domain name and maintain it with timely renewals.
Anna Szajna is a lawyer at Patpol in Poland. She can be contacted at: anna.szajna@patpol.com.pl
Maria Jurek is a lawyer at Patpol in Poland. She can be contacted at: maria.jurek@patpol.com.pl
