New Adventures in Cybersquatting

♠ Posted by Emmanuel in at 5/02/2008 01:23:00 AM
Whew, it's been so long since I've used the "Internet Governance" label that I am relieved this International Herald Tribune article came along. It discusses the common practice of "cybersquatting," or registering Internet domains which have evident commercial possibilities. It does not take a genius to figure out that if it is rumoured that a company will come out with a product named "----," then registering the domains "----.com" or "----.net" can be a quick and dirty way to earn a quick buck when they ask for the rights to use the name online--provided the firms lacked the foresight to register those domains beforehand. In this article, cybersquatting is extended to creative thinkers who pre-empt those who actually intend to offer products or services online with clever domain names. Interesting stuff:

When Alicia Navarro began casting about for a memorable name for her new company, she confronted a brutal reality. All her brilliant ideas for an Internet domain name were taken. "I came up with so many gems, only to be devastated to find that the domain name was not available," Navarro, a former executive at Vodafone, said. "It means that Internet entrepreneurs are having to come up with ridiculous words to name their businesses — Twango, Yugma, Stikkit, Rootly."

Add Skimbit, the invented name of her London Web-applications company, to that list. Her Web woes — like those of many others — are tied to the sharp acceleration of speculation in Internet names, a practice known as "domain tasting" in which names are registered by the millions and tested for their advertising prospects without charge during a five-day grace period.

Arbitrators like the World Intellectual Property Organization and the National Arbitration Forum attribute the record number of international trademark disputes last year to domain tasting. Since this form of domain name tasting emerged in 2005, for example, the number of disputes to come before the WIPO has risen 48 percent, to 2,156.

For companies like Microsoft, domain tasting creates the constant headache of chasing after typo-squatters — those who create and register Web sites with misspelled variations of the Microsoft name. For individual users, it means that millions of names are tied up in a constant churn of registering and returning names before fees are charged.

Now Icann — the Internet Corporation for Assigned Names and Numbers, the organization based in California that manages domain names — is considering steps to stamp out the practice. The board of Icann will vote in Paris in June on a proposal to severely limit the number of domain names that can be returned without a fee, but the organization is facing resistance from domain name registrars, who are against ending the grace period.

These companies, which are licensed to register and sell new domain names, are themselves divided on the issue. Some argue that domain tasting is eroding consumer trust. Others insist that the grace period allows time to correct registrations that were spelled incorrectly.

A few registrar companies around the world account for about 95 percent of the system to register and dump names. A core reason for domain tasting, according to the Coalition for Domain Name Abuse, based in Washington, is that operators are looking for Web sites that bring in traffic — and ultimately revenue — from pay-per-click advertising links. Most often those names are similar to trademarked brand names.

"We call it a billion-dollar industry," said Phil Lodico, an Internet strategy consultant and vice president with the coalition. "Initially squatters were just individuals who could be located anywhere by their personal computers. They're still out there, but there are also these companies that have invested heavily in technology. They're just canvassing the net by registering hundreds of thousands of domain names. And these folks are well-funded."

Millions of names are registered and deleted after this five-day grace period, according to a subgroup of Icann, Generic Names Supporting Organization, which issued a report indicating that in March last year almost 80 percent of the 72.2 million names registered that month were "tasted" during the grace period and deleted. Most of this was dominated by 20 companies in the United States, Russia and Austria. The top three, Capitoldomains, Belgiumdomains and Domaindoormain, are registrar companies that each registered and dumped more than 11 million domain names in one month alone last year, according to Icann.

All three share the same address in Miami, with a contact number for a lawyer, Nancy Cliff, who did not respond to repeated messages. The Web sites for the three companies note though that they are fighting a lawsuit filed by personal computer giant, Dell, which is pressing "cybersquatting" lawsuits against the three.

That Dell dispute centers on the registration of domain names that are misspelling or types of prominent brand names, a technique known as "typosquatting," and which are also tested as part of domain tasting.

Microsoft has also targeted "domainers" that have tested and used variations on its name, filing 20 lawsuits to recover 2,000 names and $2 million in damages in Britain and the United States, according to Aaron Kornblum, an attorney with Microsoft's Internet safety enforcement group.

Icann's most dramatic recommendation is to eliminate the five-day grace period. But the group is weighing a more limited approach "because they believe it would be less controversial," said Liz Gasster, an attorney for Icann.

Instead Icann will vote on a plan in June that would bar domain registrars from offering a refund for any domain names deleted during the grace period that exceeds 10 percent of its new registrations in a month. The board has already voted to make their 20-cent per domain fee nonrefundable in 2009 to deter high volume domain tasters who are sampling millions of names.

"Most everyone doesn't like domain tasting, and they're still trying to figure out the best options," said Gasster, who noted that Icann was still seeking public comment on the issue.

As for Navarro, she is happy now with her company name, Skimbit, but in a different Internet universe she would have tried something else, like snippets. "It's unfortunate," she said, "because the people who suffer are not always big companies that have a lot of money. It's the little start-ups where every little cent counts."