The number of domain name disputes resolved by
WIPO last year rose by 25% to 1,823, the largest number of cases
handled since 2000 when WIPO had its first full year of dispute
resolution. WIPO heard one case in 1999 and 1,857 cases in
2000.
The body believes, though, that a
controversial practice known as 'domain name tasting' poses a
threat to legitimate brand owners who cannot keep pace.
Domain tasting involves the registration of
domains and cancellation of them within five days. Registrants of
.com, .net, .org, .biz, .info and .pro names are entitled to a full
refund when they delete a domain within that period.
The system, known as the 'Add Grace Period',
was intended to allow registrants to correct spelling mistakes but
speculators took advantage. They wrote software to automate the
technique. When a name is found that attracts traffic and generates
ad revenue, the domain taster typically keeps the name. If no money
is made, the refund means there is no loss.
When conducted on a massive scale, the amount
of money generated can become significant. A five cent "restocking"
fee, deducted from refunds, has been suggested as a means of
controlling the practice.
A variant of domain tasting is known as
'domain kiting', where the registrant returns a name just before
the five-day period expires and re-registers it again as soon as it
becomes available, allowing for long-term ownership without
cost.
"Recent developments in the domain name
registration system have fostered practices which threaten the
interests of trademark owners and cause consumer confusion," said
Francis Gurry, WIPO deputy Director General, who oversees WIPO’s
dispute resolution work. "Practices such as ‘domain name tasting’
risk turning the domain name system into a mostly speculative
market."
"Domain names used to be primarily specific
identifiers of businesses and other internet users, but many names
nowadays are mere commodities for speculative gain,” said Gurry.
"The rate at which domain names change hands and the difficulty to
track such mass automated registrations challenge trademark owners
in their pursuit of cybersquatters."
WIPO recognised that there is now an
opportunity for profit in the mass registration of domain names.
"Such registrations are often anonymously undertaken on a serial
basis without particular attention to third-party intellectual
property rights," said a WIPO statement. "Traditionally,
cybersquatting involved the registration of domain names by
individuals seeking to sell the ‘squatted’ domain name. Nowadays,
‘domainers’ derive income from the large-scale automated
registration of domain names. They acquire domain name portfolios,
buy and sell domain names, and park domain names, claiming a
significant share of the well over 100 million domain names that
are now registered."
The WIPO Uniform Domain Name Dispute
Resolution Policy (UDRP) can be stretched to accommodate such new
developments, the WIPO statement said. "With regard to bulk buyers
of domain names using automated registration processes, a WIPO
panel decision issued in February 2006 found that failure to
conduct prior checks for third-party rights in certain
circumstances would represent ‘wilful blindness,’ representing bad
faith under the UDRP," it said. "This is an example of how the
application of the UDRP decision criteria must accommodate changing
circumstances and new developments."
Learn more: We are running
free breakfast seminars next month in Leeds, Birmingham,
Manchester, Edinburgh, London or Glasgow on protecting your name on
the net. See OUT-LAW Breakfast Seminars,
Spring 2007.
