When it comes to cyber squatters prevention is far easier than dispute resolution, writes Ross Walker, European trade mark attorney and partner, Forresters.
For any company or organisation, a simple, straightforward and memorable domain name is invaluable. Websites are in large part identified with the companies that own them due to the domain name used.
Furthermore, for creative industries such as advertising, marketing, media and communications, where identity and messaging is paramount, obtaining a domain name that is closely associated with a particular brand is imperative.
However, due to cyber squatters an increasing number of companies and organisations are struggling to register the domain name they would like to trade under.
These cyber squatters are companies registering the names of web domains linked to famous brands so they can either direct traffic to their own sites, sell counterfeit goods or try to sell the domain name for an inflated price.
To take the retail industry as an example, disputes over web domain ownership are expected to hit a record high this year as the growing popularity of online shopping triggers a raft of legal challenges.
In the past year alone, Armani, Burberry, Cartier and Dior have defended their brands and taken up cases with the World Intellectual Property Organisation (Wipo), which is responsible for the promotion of the protection of intellectual property throughout the world.
Gucci too has brought six cases before Wipo to win control of more than 100 domain names, such as cheapguccionsale.com and guccishoppingonline.org.
Where it all began
This problem isn’t new. The first major case of cybersquatting in the UK occurred between the famous Knightsbridge shop Harrods and a department store in Argentina.
In the landmark case, the Argentinean department store lost and Harrods boss Mohammed Al Fayed took possession of 60 Harrods related websites.
The Argentinean store lost on the grounds that the web domains were bought in 'bad faith'.
It isn’t just companies that have had to deal with problem either, as many celebrity names can be brands in themselves they are hot property for cyber squatters. Among American celebrities who have won court cases against cyber squatters are Jennifer Lopez, Oprah Winfrey, Larry King and Martha Stewart.
Understanding the problem
So what are these unscrupulous companies doing exactly and what is the legal defence if they do indeed register the names of web domains linked to your brand?
In order to fully gauge the extent of the problem, it is necessary to understand how internet users are looking for companies or products online. A large portion of traffic comes from users typing in the exact domain name of a company into their browser’s address field. This is known as direct navigation and amounts to 25% of searches.
Another fact worth noting is that it is not necessary for companies to make any kind of a trademark search before registering a domain name or getting clearance from the company that the trademark belongs to.
Consequently, any trademark can be used unlawfully in a new domain name without even the company that the trademark belongs to being made aware of.
It is all of these facts combined which have resulted in many disputes revolving around domain names and trademarks.
The legal defence
Wipo has recently released figures which suggest that it is on course to give a record number of judgements for the whole of 2012. In 2011 it adjudicated on 2,764 cases but by August this year it had already decided on 1,931 cases.
There are however, several options for companies to deal with this growing problem. These include sending cease-and-desist letters to the cyber-squatter; bringing an arbitration proceeding under Internet Corporation for Assigned Names and Numbers (Icann) - the private sector, non-profit corporation created in 1998 to oversee the domain name registration system; or bringing a law suit in court.
One thing is for sure, the consequences of leaving the problem unchecked can be extremely damaging both for the reputation and popularity of a brand.
Companies need to act fast to protect their brands and to avoid cyber squatters. Furthermore, they need to seek professional advice if they believe a registrant with their name is using it for commercial gain.
It is possible to evict cyber squatters and reclaim domain names, however prevention is far easier than dispute resolution.