Cyber Squatting

One of the fundamental issues in any e-commerce business is a decent domain name. A domain name is a unique alpha-numeric "address" that enables the world to find your site. Domain names always have two or more parts, separated by dots. The part on the left is the most specific, and the part on the right is the most general and refers to a "top level domain". There are two types of top level domains, generic (GTLD) and country code (CCTLD). The former consists of three letters and indicates the user's field (eg, '.com' for commercial enterprises; '.edu' for educational organisations; .'org' for non-profit organisations; etc). The CCTLD's consist of two letters and indicate the user's country (eg, '.uk' for the United Kingdom, the latter part of the domain name therefore reading '.co.uk'). One must make sure that a domain name is registered with the correct registrar for that particular domain.

One can immediately see the kind of problem which arises from this situation. Many organisations have taken steps to register their names in one top level domain, but have then suffered from so called "cyber-squatting" when some third party of dubious legitimacy comes along and registers the same name in a different top level domain.

The first case of cyber-squatting to reach the Court of Appeal occurred last year. This was the "One in a Million" case, in which the defendants had enterprisingly registered domain names comprising a number of well known names and trade marks, without the consent of the companies that owned them - examples were Ladbrokes.com, Marks&Spenders.com and BT.org.

The High Court, and subsequently the Court of Appeal held that the registration of domain names which were identical to the plaintiffs' company names was capable of amounting to passing off and trade mark infringement, on the basis that these names were instruments of fraud made with the intention of appropriating the company’s goodwill.

Put another way, the courts look with some displeasure on attempts by companies to register domain names in an attempt to make use of the reputation of others. However, prevention is always better than cure and it is important to avoid the possibility of anyone cyber-squatting your chosen domain name. One of the first things you need to do when contemplating setting up on the Web is to check the availability of your chosen domain name, in all top level domains which apply to countries or organisation-types that you might want to represent yourself as and then register those names with the relevant authorities as soon as possible.

The Internet Corporation for Assigned Names and Numbers (ICANN) was created in October 1998 by coalition of various bodies representing the Internet business, technical, academic and user communities. ICANN now co-ordinates the assignment of Internet domain names, Internet protocol address numbers and protocol parameter and port numbers. ICANN also has a Dispute Resolution Policy which has already been effectively used by those seeking to challenge cyber-squatters who register and use domain names in bad faith. One of the institutions which implements this policy is the WIPO Centre in Geneva which states that its Administrative Panel will be able to give a decision within 50 days of a complaint being made.

For further information please contact commercial partner John Armstrong on 0207 7367 2701 or by e-mail at [email protected].