Reprinted with permission from CNet.com.
When it comes to cybersquatting, there's a new sheriff in town: the Coalition Against Domain Name Abuse.
A nonprofit organization based in Washington, D.C., with a roster of members, including the likes of Yahoo, AIG, Dell, Eli Lilly, Hilton, HSBC, Marriott, Verizon and Wyndham, the coalition has launched a national campaign against the fraudulent abuse of domain name registration that is at the core of cybersquatting. Even more, the group has targeted cybersquatting as a threat to the future viability of Internet commerce.
Even though anticybersquatting legislation was enacted as far back as 1999, the practice still remains a threat. The number of .com domain names has actually doubled since 2003, while the number of cybersquatting disputes filed with the World Intellectual Property Organization has increased by 25 percent from 2005 to 2006. Just in the last year, cybersquatting has soared by 248 percent.
The problem is that sophisticated cybersquatters are exploiting a supposed flaw in the domain registration process. Domain names can be registered and later dropped risk-free within an accepted five-day grace period. By abusing this grace period, cybersquatters apparently can "taste" and "kite" domain names so that they can test their profitability.
The coalition reports that more than 1 million kited sites are re-registered on a daily basis. This is said to bring in more than $100 million annually for profiteers. Indeed, it claims that worldwide cybersquatting is costing brand owners over $1 billion annually as the result of diverted sales, the loss of goodwill and expenses incurred in combating fraud.
By registering domain names emanating from famous brands, cybersquatters lure consumers into purchasing counterfeit products, cause them to reveal their personally identifiable information, and expose themselves to spyware.
So, what does the coalition plan to do about all of this as part of its new national campaign? The coalition says that it will pursue congressional legislation that will increase statutory damages under current law and to work with the World Intellectual Property Organization to introduce an international anticybersquatting treaty.
On top of this, the coalition will place pressure on the Internet Corporation for Assigned Names and Numbers to take decisive action with respect to domain registrar abuses and to close the "tasting" and "kiting" loophole.
Of course, it is too early to know for sure whether the campaign will have a full impact in terms of rooting out cybersquatting. However, the motivations behind the campaign are good, and it certainly is backed by important and relevant players. Let's cross our fingers and hope for its success.
Eric J. Sinrod is a partner in the San Francisco office of Duane Morris. His focus includes information technology and intellectual-property disputes. To receive his weekly columns, send an e-mail to ejsinrod@duanemorris.com with "Subscribe" in the subject line. This column is prepared and published for informational purposes only, and it should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.
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