Daily Domainer

The World Intellectual Property Organization (WIPO) released a sensational press release entitled "Cybersquatting Remains On The Rise With Further Risk To Trademarks From New Registration Practices"

The issues:

The number of cybersquatting disputes filed with the World Intellectual Property Organization (WIPO) in 2006 increased by 25% as compared to 2005.

WIPO sees this as evidence that cybersquatting is on the rise. However, so is Internet usage and domain name ownership in general. Additionally, in its Proposed Program and Budget For 2006/07 WIPO congratulates itself that its own awareness-raising activities (!) are at least partially responsible for the increase in UDRP cases:

It is estimated that in 2006/07 the income of the Center will be around two million Swiss francs, of which almost 1.5 million Swiss francs is for UDRP procedures (at an estimated rate of three new cases per day). A gradual increase in the number of Arbitration and Mediation procedures is also expected, based on an expected increase in the types of intellectual property transactions that lend themselves to resolution through procedures other than court litigation, and a continuation of the Center’s awareness-raising activities. [emphasis added]

WIPO's press release continues:

Practices such as ‘domain name tasting’ risk turning the domain name system into a mostly speculative market. Domain names used to be primarily specific identifiers of businesses and other Internet users, but many names nowadays are mere commodities for speculative gain. The rate at which domain names change hands and the difficulty to track such mass automated registrations challenge trademark owners in their pursuit of cybersquatters. With domain names becoming moving targets for rights holders, due consideration should be given to concrete policy responses.

At least in theory, domain tasting allows registrants to continually register, drop and re-register trademarked domains under different identities, making it difficult to track who actually owns the domain.

But is this actually happening on a large scale? Most large domain tasters seem to taste for the purpose of finding profitable domains that they can actually keep. To stop domain tasting almost entirely, all it would take is to get VeriSign (which remains unmentioned in the press release) to charge a $0.05 fee for each deletion.

In 2006, a total of 1,823 (gTLDs and country code Top Level Domains (ccTLDs)) complaints alleging cybersquatting – the abusive registration as domain names of trademarks – were filed with WIPO’s Arbitration and Mediation Center (Center), representing the highest number of cybersquatting cases handled by WIPO since the year 2000.

As stated, the number of annual cases isn't even back at 2000 levels yet. Here are the actual numbers:

2000 - 1,857 cases
2001 - 1,556 cases
2002 - 1,208 cases
2003 - 1,100 cases
2004 - 1,176 cases
2005 - 1,456 cases
2006 - 1,823 cases

WIPO then describes how recent developments in the domain industry have contributed to the perceived problem of mass registrations:

The combined effect of developments such as: the use of ‘Whois’ privacy services for registrations; the growth in the number of professional domain name dealers and the volume of their activity; the use of computer software to automatically register expired domain names and their ‘parking’ on pay-per-click portal sites; the option to register names for free for a five-day ‘tasting’ period; the growth in the number of accredited registrars; and the establishment of new gTLDs, is to create greater opportunities for mass registration of domain names. Such registrations are often anonymously undertaken on a serial basis without particular attention to third-party intellectual property rights. Traditionally, cybersquatting involved the registration of domain names by individuals seeking to sell the ‘squatted’ domain name. Nowadays, ‘domainers’ derive income from the large-scale automated registration of domain names. They acquire domain name portfolios, buy and sell domain names, and park domain names, claiming a significant share of the well over 100 million domain names that are now registered.

Yes, all of this is happening. But only an infinitely small percentage of domainers is involved in cybersquatting. Millions of domains are registered each year, and the - by comparison - ridiculously low number of UDRP cases (1,823 last year) shows that cybersquatting is only a very minor problem that is more than adequately addressed with current policies and procedures.

There is a rapid growth of domain parking sites, on which links to other sites are organized and indexed. These links usually operate on a ‘pay-per-click’ basis with registrants and parking services sharing revenue generated by web traffic.

WIPO conveniently fails to mention Google and Yahoo, who are the main beneficiaries of parked domain traffic. An estimated 10% to 15% of Google's ad revenue is generated through parked domains. Nevertheless, only a very small percentage of these domains falls under the "cybersquatting" category. Microsoft is more aggressive and is Quietly Making Untold Millions by diverting typo traffic to their search engine.

Increasingly, service providers are offering Whois privacy services allowing domain name registrations to be made through a proxy registrant, which is often a registrar-related entity. One reason for such identity-shield developments is to avoid registrants receiving ‘spam’ as a result of their contact details being made publicly available on the Whois database. WIPO panel decisions are beginning to explore the practical implications for the UDRP of these developments, for example in terms of whether or not the privacy service discloses the identity of its client once the service has been alerted to concerns of trademark infringement. The fundamental assumption of the UDRP is that the formal respondent for case purposes is to be found in the applicable Whois database.

It should be up to each defendant to decide whether to ignore the proceedings, to respond under the protection of anonymity, or to identify himself when responding. Each case should be judged on its own merits and the burden of proof should be upon the complainant.

The "bad faith" component of UDRP proceedings is a joke anyway and usually results in WIPO panelists trying to divine the thoughts in the head of a registrant at the time he registered a domain. This often creates the both Kafkaesque and Orwellian impression that a panelist first makes up his mind about a case and then retroactively projects his conclusions into the registrant's head at the time he had made the registration, and finally uses these "findings" to support his decision. (See "Think The Wrong Thought - Lose Your Domain?")

In summary, WIPO's press release is sensational and prone to misinterpretation. It raises some interesting points but fails to offer any solutions, which would actually be quite simple. Concerned about domain tasting? Tell VeriSign to introduce a $0.05 deletion fee or simply try to "press-release" Google and Yahoo into stopping the monetization of domains that are less than 5 days old. Concerned about cybersquatters? Continue to encourage those who believe they have been victimized to file a UDRP case. UDRP works well enough for many cases, despite serious shortcomings such as the "bad faith" clause which might be fixed in the future.

Most domainers are not interested in cybersquatting and probably resent WIPO for painting them with the same broad brush, and take pleasure in ridiculing those clueless mainstream reporters who misunderstand the issue.

Categories: Domain Disputes, Domain Industry, Domain Parking, Domain Tasting
Tags: cybersquatting, Domain Tasting, udrp, wipo