Cybersquatting Hits All-Time Record

Concerns have even slowed a plan that ICANN announced last year to introduce new top-level domains.

Total Cybersquatting Cases by Year

Total Cybersquatting Cases by Year
(click for larger image)

The economy may be down, but cybersquatting appears to be booming.

On Monday, the World Intellectual Property Organization, or WIPO, said that the number of cybersquatting cases brought by trademark holders rose again in 2008, as it has every year since 2003, to reach a record 2,329 complaints filed under the Uniform Domain Name Dispute Resolution Policy, or UDRP.

That's an increase of 8% compared with 2007.

MarkMonitor, a service that helps organizations protect their brands, found an even more pronounced increase in cybersquatting. The company said about a week ago that it had tracked 440,584 instances of cybersquatting in the fourth quarter and that the amount of cybersquatting in 2008 increased 18% compared with 2007.

Cybersquatting describes the practice of registering a domain name associated with a trademark or known entity for the purpose of reselling the domain name for a profit or earning ad revenue from consumer interest in the trademark or entity online.

The UDRP is an arbitration procedure administered by WIPO to resolve complaints about cybersquatting and other domain issues.

Trademark holders are not automatically entitled to own the domain that matches their trademark, because there can be multiple trademarks for the same word in different industries and because not all uses of a trademarked name are bad-faith uses.

While the history of Internet domain name disputes includes plenty of attempts to exploit trademarks without authorization, it also includes instances of individuals bullied unfairly into surrendering domains.

According to WIPO, almost 30% of UDRP disputes get settled. Of the remaining cases, arbitrators side with the party making the complaint 85% of the time. This suggests that cybersquatting is a problem is a majority of the complaints filed.

Concerns about cybersquatting have slowed a plan that ICANN announced last year to introduce new top-level domains. The idea was to allow would-be or current domain registrars to pay a large sum to administer custom top-level domains, such as .coke or .google, providing the proposed names survive the lengthy approval process. It's an idea that hasn't proven very popular with those already worn ragged policing their trademarks.

At its recent meeting in Mexico City, ICANN said it would not advance its plan until it has further studied the issues raised by trademark holders.

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