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Record high in legal disputes over domain names as companies fight off overseas squatters

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Record high in legal disputes over domain names as companies fight off overseas squatters

Record high in legal disputes over domain names as companies fight off overseas squatters

  • Disputes rise over new domains such as “.club”, “.vip”, and “.wine”
  • Number of UK companies fighting ‘cyber squatters’ highest in 5 years

The number of legal disputes worldwide over domain names (website addresses) has reached a record high in the past year, as companies fight off overseas cyber squatters, says EMW, the commercial law firm.

EMW says that the number of domain name dispute cases adjudicated by the World Intellectual Property Organisation (WIPO) hit 3,036 in 2016, up 10% in the last year from 2,754, and up by two-thirds (66%) in the past decade from 1,824.

EMW explains that as companies expand into new, overseas markets, disputes over domain names arise when their trade-mark is already being used by a competitor, or has been bought by a domain name ‘squatter’.

For many popular brands, squatters may pre-emptively register a domain name incorporating the company’s brand in order to re-direct online traffic to their own site or in an attempt to get the company to purchase the domain name for an inflated sum.

EMW says the ability to use new domains is a major driver of the increase in disputes, which rose for the fourth consecutive year. Examples of new domains being disputed include “.club”, “.vip”, and “.wine”.

From October 2013, new generic top-level domains were introduced, which allows new website domain names to be created using alternatives to “.com”, “.co.uk”, and “.org”. Any business or individual can register a domain name using a range of potential domains allowed by the Internet Corporation for Assigned Names and Numbers (ICANN), which coordinates naming systems.

Examples of companies who successfully disputed domain names registered by alleged “cyber squatters”, often located in China, in the last year include:

  • Calvin Klein, which challenged the use of “verycalvinklein.xyz”
  • Lidl, which challenged the use of “lidl.irish”
  • All Saints, which challenged the use of “allsaints.vip”
  • Swarovski, which challenged the use of “swarov.ski”
  • Hugo Boss, which challenged the use of “hugoboss-suits.org”

EMW adds that the number of cases where a UK-based company brought a complaint against a cyber squatter rose 4% to a four year high in 2016, including cases involving Shell, Virgin, and Vodafone Group.

Mark Finn, Principal at EMW, says: “Businesses are increasingly willing to pursue domain name disputes against Chinese and foreign companies to protect their brand, especially in a new market.”

Mark Finn continues: “As online shopping becomes ever-more important to business growth potential, a brand’s online presence is increasingly vital to its overall success. As a result, companies are being forced to dedicate significant resource to resolve these disputes against squatters, who often hope to hold them to ransom.”

“However, in disputes against squatters, WIPO will rule in favour of individuals and companies that hold existing trade marks against those who they consider are acting in ‘bad faith’. Nevertheless, businesses should be proactive about registering domain names. It may seem burdensome but it is a relatively inexpensive process and can be a useful opportunity to help develop and hone a business’ online presence and branding.”

“With the growing number of new domains, the potential for disputes may increase as many Chinese and overseas competitors and online squatters look to create a wide range of domain names using various combinations that have not yet been registered.”

Domain name disputes up by nearly 66% in ten years

Graph rise in domain disputes