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March 24, 2009

Number of new cybersquatting cases hit record in 2008

WIPO report shows increase in cases filed but researcher says complaints falling relative to
number of domain names

A record 2,329 complaints of “cybersquatting”
were filed in 2008, an increase of eight per cent over 2007 according to The World Intellectual Property Organization (WIPO).

The UN agency is one of the main organizations worldwide responsible for resolving domain name disputes.

Canada Post and Waterloo, Ontario-based Research in Motion’s Blackberry were among the Canadian complaints but according to WIPO, only two per cent of the cases filed were from this country. Canada currently sits 8 th in the top 15 WIPO complaint rankings (1999-2008) with 289 cases of cybersquatting reported.

Cybersquatting is registering, selling or using a domain name with the intent of profiting from the goodwill of someone else's trademark. It generally refers to the practice of buying up domain names that use the names of existing businesses with the intent to sell the names for a profit to those businesses.

The practice originated at a time when most businesses were not savvy about the commercial opportunities on the Internet. Some entrepreneurial souls registered the names of well-known companies such as Panasonic, Hertz and Avon as domain names, with the intent of selling the names back to the companies when they finally woke up.

The most common business sector in which complaints arose was pharmaceuticals, due to websites offering sales of medicines with protected names. Other top sectors for complaints were Internet and telecommunications, banking and finance, retail and food.

According to the WIPO report, complainants from the U.S. accounted for 6,452 or nearly 44 per cent of the total. France came in second with 10 per cent. In 30 per cent of cases, the parties involved in the dispute managed to settle it without the decision of a WIPO panel. In the rest, 85 per cent of decisions favoured the complainant.

What’s in a name?

The Internet Corporation for Assigned Names and Numbers (ICANN), which manages the system of web addresses with endings like .com and .gov, is getting ready to launch many new series of suffixes.

But Francis Gurry, director general of WIPO, said in a statement that given the increase in cybersquatting, if not properly managed, the new names will "provide abundant opportunities for cybersquatters to seize old ground in new domains.”

"The creation of an unknowable and potentially vast number of new gTLDs raises significant issues for rights holders, as well as Internet users generally," he said.

However, Michael Geist, Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, downplayed the report. In his blog he says that the other organization that resolves domain name disputes, the National Arbitration Forum, received fewer complaints in 2008 than the year before. That group announced last week that it had handled 1,770 domain name disputes in 2008.

Geist also pointed out that overall, the number of domain name disputes grew by only three per cent last year, even though the number of domain names on the internet grew by 12 per cent in 2008, according to the internet infrastructure company Verisign.

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