Cybersquatting: What can you do about it?

18 May 2006

This Spring’s release of the new .eu domain names may well bring with it another outbreak of cybersquatting. The release of the new .eu domains was initially restricted to applicants wishing to apply for a domain which corresponded to their trading name or registered trade marks. The restricted period for applications ran from December 2005 to the start of April 2006, but now registration is open to all comers. This time around businesses should be better informed, cybersquatting is not a legitimate way to make a quick buck by holding a business with established goodwill to ransom, nor does it amount to legitimate competition. There will, however, undoubtedly be a few who remain in the dark concerning the rights of their competitors and cause a nuisance to others.

What is “Cybersquatting”?

“Cybersquatting” occurs when someone unconnected with your business uses a domain name which is similar or the same as your business or brand name. Often this is a deliberate attempt to divert trade although it can, on occasions, be accidental. At best this is an irritation and at worse it can substantially affect business, especially for those who trade through their websites and rely on good search engine ratings.

Is it legal?

As a matter of law, the use of a domain name that is identical or so similar to another’s trading name or brand as to cause confusion, will usually amount to passing off. In such cases the court will provide a remedy if proceedings are issued. Some businesses may have registered trade marks which, if used in a domain name without their authority, will give good cause for trade mark infringement allegations. Whilst the law is reasonably settled, for the more modest small to medium-sized businesses where the abusive use of the domain name is the only complaint and registered intellectual property rights are less commonly encountered, launching court proceedings for passing off may be akin to using a sledgehammer to crack a nut. Whilst the remedy is there, it will take time and money to get a resolution.

What can I do about it?

Unless the warring parties reach a financial agreement, court proceedings are the only way that you can recover damages and legal costs from the party in the wrong, but there is another option open to businesses or individuals, which can provide a practical remedy on a budget. As the use of the internet has infiltrated lives, the industry has sought to provide solutions for abusive registrations. If the complaint is confined to the use of the domain name and it has been noticed early, before serious damage is done, a straightforward, quick fix solution is a complaint for abusive registration to the registrar. The complaint will be handled in accordance with administrative alternative dispute resolution procedures, which are made binding by the terms of purchase of a domain name.

Who do I complain to?

In the first instance you should approach the Registry that registered the domain name in question. Nominet is the registry for .uk domain names, the Europe Registry is responsible for the new .eu names. Other domain names such as .com, .net, .info and .org can be registered by a number of different registrars, those registrars must however be accredited by the Internet Corporation for Assigned Names and Numbers (known as “ICANN”), and will operate the Uniform Domain Name Dispute Resolution Policy.

What will happen if I make a complaint and it’s upheld?

Under the dispute resolution procedures, if a complaint is well-founded, the individual determining the dispute can generally require the registrar to transfer, cancel or suspend the domain name.

A complaint alone will not result in financial compensation or payment of your legal costs. If a complainant chooses to seek professional advice and incurs legal fees, there is generally no power for the registrar, or the dispute resolution service provider to which the matter is referred, to require a party to the dispute to pay those costs. In addition, you should bear in mind that fees may be charged by the dispute resolution service to whom the procedure is out-sourced. By way of example, at the time of writing the initial stages of a complaint to Nominet are free, but if the matter cannot be resolved through informal mediation and a decision is required from an independent expert, there will be a fee, payable by the party bringing the complaint. Nominet’s current fee for an expert determination is £750 plus VAT. Under that particular procedure, the complainant pays the fee and the expert does not have power to require the offending party to pay it instead.

The procedure is apt for getting the domain name itself dealt with. Anything beyond that will require court proceedings.

If I won’t get compensation and it will cost me money, why should I make a complaint?

Whilst many complainants are aggrieved not to be reimbursed their costs given that the other party was in the wrong, the perceived benefits of the procedure can still make it a desirable option.

The procedure is relatively quick, taking a few weeks to reach a conclusion, whereas a court case can easily run over months or years. The overall costs are low relative to the costs of issuing proceedings and in court proceedings, realistically, you are likely to recover some, but not all of your costs if you win. Whilst a solicitor with intellectual property and/or IT experience will usually be happy to assist with a complaint, paid legal assistance is not a pre-requisite and the procedures can easily be navigated on-line.

Some comfort can be found in the fact that there may be an indirect return on the costs involved. The expert determining the dispute can require the domain name to be transferred to the complainant and the decision is usually published on-line, helping search engine ratings for both domain names.

The process may not be ideal, but then we don’t live in an ideal world. For those who do not have the time, money or inclination to litigate, it does provide a very practical alternative.

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