FT.com: What’s in a name? A lot if it’s your domain

[barefoot]

Cybersquatting is an old problem that has come back to haunt business in a new form.

Laws passed in 1999 were meant to stamp out the practice, whereby enterprising individuals would register trademarked names such as burgerking.com and virgin.com and sell them back to the trademark owners for extortionate sums.

Cybersquatting did not go away, however. Cybersquatters have just got smarter, says Anthony Gold, intellectual property lawyer at Eversheds, and are finding new ways to get around the laws.

Cybersquatters can, for example, cover their tracks by using privacy services that hide the details of who owns a website. This makes suing them more complicated. In a lawsuit launched last August, Microsoft had to get court subpoenas to discover the owners of 217 websites it claimed were infringing its trademark.

Some are taking advantage of the sheer volume of new domain names on offer, as new “top-level domains” such as .mobi, .eu and .asia, come into existence alongside the old favourites .com and .net.

“There are more than 240 national registries in addition to the generic top-level domains such as .com and .net. Even if you want to register only your basic brands, a big company would easily have to register 3,000 to 4,000 domain names across the world,” said David Engel, intellectual property lawyer at Addleshaw Goddard.

Companies are increasingly struggling to police all the domain name variants available. Many are turning to specialists such as UK-based NetNames, who offer domain portfolio management services to companies such as Unilever, British Airways and Hilton Group.

Going through the courts and even arbitration can be costly. Arbitration costs about £1,000-£2,000, ($1,900-$3,8000), with a court case likely to cost as much as £10,000. Although some companies such as Sony, Virgin and Hilton Group have made a point of never paying to get back domain names, for others it is simpler and cheaper to pay up when cybersquatters are not asking for exorbitant sums.

Cybersquatters are turning to new tactics such as “typosquatting”, where they register a domain name that is a misspelling of a popular brand – such as hotmai.com or myspac.com. These pages get a lot of traffic from less than perfect typists.

Some typos present enough of a grey area to make them difficult to pursue the perpetrators through the courts.

Microsoft was, for example, forced to settle a case with Canadian student Mike Rowe, who registered MikeRoweSoft.com as his domain name.

But the key reason the cybersquatting has made such as strong comeback recently is that “domaining” – buying, selling and making money from domain names – has become a very big business.

Most of this trade is perfectly legal. The names bought and sold are not subject to trademark, but generic names such as diamonds.com or sex.com.

But a lot of trademarked names are also getting caught in the frenzy.

Thanks to advertising programmes such as Google’s Adsense and the Yahoo Publisher Network, any internet page can now make money. Owners of web pages can place adverts on them and get paid small sums each time a visitor clicks on one of the ads.

For those unwilling to set up the adverts themselves, specialist “domain parking” companies such as sedo.com and NameDrive.com, can organise this for a share of revenues.

Names that cost just a few dollars to register can be resold for millions. Sex.com is reported to have been sold for $12m last year, with diamond.com going for $7.5m and vodka.com selling for $3m.

Companies such as sedo.com offer Ebay-like auction sites for buying and selling these names, and a whole industry has developed around “dropcatching”, or getting hold of a popular name that has been allowed to lapse.

Domainers in turn feel that some companies unfairly bully them to relinquish names that should not be subject to trademark. Many feel arbitration proceedings favour large companies over individuals.

Microsoft’s new rush of lawsuits may inflame this controversy further still.

http://www.ft.com/cms/s/82e8f6a0-d18...b5df10621.html

[petrosc]

nice article, thanks

[Yum]

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