Wednesday 20 November 2019

Record rise in domain name disputes as companies crack down on trademark use

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Tim Moynihan

DISPUTES over internet domain names have hit a record high over the last 12 months, experts said today.

Legal information provider Sweet & Maxwell said that such disputes adjudicated by the World Intellectual Property Organisation hit 2,944 in the 12 months to July 2012, a 6% increase from 2,775 in July 2011.

The disputes occur when companies find a competitor or "squatter" using their trademark in a website name. This is especially prevalent where household-name brands are concerned.

It is common for the squatters to register virtually-identical domains, in an attempt to attract online traffic, or sell the domain back to the rightful owner.

John Olsen, partner at law firm Edwards Wildman, and editor of Domain Names: Global Practice and Procedure, published by Sweet & Maxwell, a Thomson Reuters company, said the main reason for the increase was that big brands were seeing more income from online sales.

"As online retail becomes more profitable, household name brands are taking the defence of their domain names much more seriously," he said.

"They are doing all that they can to protect their revenue streams - domain names are the key to the door of online retail."

So far in 2012, fashion giant Gucci has been forced to bring six cases to win control of more than 100 domains, while Austrian luxury brand Swarovski alone has brought, and won, 32 cases since 2010.

Mr Olsen said: "Domain name squatting can affect high-profile individuals too. Just last month, Paris Hilton won a dispute over a domain that used her name. Boris Johnson won a case when he lost his campaign website to a squatter. Domain name cases have also been brought by many other celebrities, such as Madonna, Wayne Rooney, and Pamela Anderson."

The number of complaints about Chinese domain name squatters has more than doubled since 2009. The United States still has the highest number of complaints made against alleged squatters, but China has risen to second place, with more than 12% of complaints.

"Businesses need to be aware that squatters are actively searching for domain names they can register," Mr Olsen said.

"They then attempt to hold businesses to ransom, or in some cases, sell fake goods using the brand. The number of alleged squatters in China is on the rise, contributing significantly to the global growth. All the cases Gucci has brought this year have been against owners of domain names registered in China.

"Domain name squatting was a problem during the dot com bubble from 1995-2000, but it slowed down when the bubble burst. These statistics show a second wave of squatting cases, driven by the upsurge in Chinese domain registrations since 2010."

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