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June 27, 2014

New domains spark surge in cyber-squatting

New domains spark surge in cyber-squattingThe introduction of new Top Level Domains (TLDs) such as .sport and .shop has sparked a land grab for businesses wanting to secure new versions of their web addresses.

Law firm Hugh James is warning that so-called cyber squatters have taken the opportunity to register for web addresses that could prove valuable, and it says there have already been 48 disputes over this issue. It expects that number to rise rapidly.

The new TLDs were introduced in October 2013. According to Hugh James, they open up a huge number of potential new web address combinations for businesses, increasing the likelihood of companies' brands being held to ransom by cyber squatters.

Cyber squatters typically register web addresses with the aim of selling the rights to use them at an inflated price or attracting web traffic to drive advertising revenue. In some cases, they post defamatory content on the website to try and force the business to buy the address from them.

Tracey Singlehurst-Ward, senior associate at Hugh James, said: "Many businesses expressed fears that these new web addresses would create a wave of legal disputes and it looks like those fears were justified. UK businesses are having to spend time and money fending off cyber squatters and rival companies who managed to register one of the new generation of web addresses with their company name in it."

More than 1,300 new domains are expected to be introduced. As a result, Hugh James is warning that the number – and cost – of domain name disputes could rise substantially.

Singlehurst-Ward said: "Many businesses are taking a proactive approach and registering protective web addresses. However, the surge in disputes we're seeing shows that many businesses are being pipped to the post by cyber squatters, meaning they have to launch a claim to prevent the misuse of their brand."

In order to prevent another business from using their brand in a domain, businesses have to prove that:

  • the domain address is confusingly similar to a trade mark or unregistered mark they own;
  • the domain name registrant has no rights or legitimate interest in the mark or name; and
  • the domain was registered in "bad faith" by the other party to undermine the trade mark holder.

The World Intellectual Property Organisation (WIPO) adjudicates on disputes concerning generic TLDs.

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