Domain names are a vital business commodity and a valuable source of intellectual property. However, since anyone can register a domain name as long as it has not already been taken (usually on a first come first served basis) businesses should be alive to cybersquatting, a practice which according to the World Intellectual Property Organisation ("WIPO") is said to be booming.

Cybersquatting is the act of registering a domain name for the purpose of either reselling it for a profit or as a means of securing advertising revenue from consumer interest online. Increasingly, this practice has developed a speculative element with domain names being snapped up in anticipation of, for example, the rebranding of a business or the launch of a new product. The speed with which new domain names can be registered only serves to compound the problem.

The motives of the cybersquatter are not always immediately apparent. Some are speculators who hope to sell the domain name to its rightful owner, usually for an inflated price. Others attempt to exploit the domain name in other ways such as by generating revenue for advertisement or commission value, based usually upon the amount of traffic generated.

There is also the related practice known as "typosquatting" which involves the deliberate act of registering a domain name similar to the name of a known brand but with the exception of a few, deliberate typographical changes.

Businesses wishing to combat these practices are likely to face even more challenges over the coming months with the anticipated launch of new generic top level domain names (gTLDs) presently scheduled for late 2009. It is anticipated that this will lead to a substantial increase in abusive registrations.

So, what steps can you take to protect your business when faced with a cybersquatter?

If you are the holder of trademarks then you may be able to pursue an action for trademark infringement. Alternatively or in addition, you may find that you have a claim in passing off. However, Court action can be both costly and time consuming. There are other solutions.

.uk/Nominet

If you wish to complain about the registration of a domain name which ends ".uk", the dispute resolution service operated by Nominet is worth considering. Nominet is a not for profit company entrusted with managing the database of .uk internet domain names. It offers a specific procedure for resolving .uk domain name disputes either through mediation or, where this is not possible, through an independent expert's decision. Whereas court action can take some 12 to 18 months to pursue, Nominet's procedure is generally concluded within several months.

Generic Top Level Domains

Where the abusive registration involves one of the generic top level domains or gTLDs (for example .com, .info, .mobi, .name, .net, .org) a legal framework has been established for pursuing a complaint utilising the Uniform Domain Name Dispute Resolution Policy administered by WIPO.

This Policy offers a number of advantages. The procedure is faster and cheaper than going to Court. The decision makers are experts in this field and decisions are usually reached on paper without the need for a hearing. The procedure also offers a single mechanism for resolving domain name disputes regardless of where the parties are located. Given the global attraction of the internet and since those who seek to exploit domain names are rarely transparent about their activities, this is a considerable advantage.

The procedure is also very effective in its implementation. Once a complaint has been instigated, the Registrar of the offending domain name is obliged to prevent the transfer of that name to any third party pending a decision. The Registrar must also implement the final decision once published.

Protect Your Brand

According to WIPO, the number of cybersquatting cases has risen every year since 2003 and in the last year alone, a pronounced increase in cybersquatting has been identified.

Since domain names are a critical asset to any business and given the nature of the problem, it is welcome to know that there are procedures in place specifically to tackle the problem of cybersquatting and to help regulate and ensure the protection of your brand.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.