UDRP SETTLES DOMAIN DISPUTES

By D.E.Levine

Ten years ago the Internet Corporation for Assigned Names created the Uniform Domain Name, Dispute Resolution Policy (UDRP).

The purpose of the UDRP is to save businesses time and money by interceding and getting offending Web sites shut down quickly without lengthy lawsuits.

Unfortunately, while the main goal of URDP has been achieved, it hasn't deterred cybersquatters. These cybersquatters lay claim to domain names that play on versions of well-known brand names to drive traffic to their own sites.

Legitimate users attempting to visit a brand's Web site may end up on a cybersquatter's site, then be directed to a phishing site, a Web site containing objectionable content, or advertising that links to competing products and services.

It's possible for the most popular brand names to be the target of thousands of cybersquatting sites. Frequently the criminals copy the brands entire site so they can collect user names and passwords from unwitting visitors.

The reason that challenging cybersquatting is so important is because it can damage a brand reputation and cause substantial monetary losses. But, challenging cybersquatting is time consuming and can be very costly. Companies that do pursue the challenge aggressively often take over the cybersquatters domains and relaunch them with information to redirect users back to its own Web site.

However, ignoring cybersquatting is becoming more difficult as the amount of brand abuse continues to rise. Cybersquatting incidents were up 18% in 2008. And that rise has caused ICANN to increase its action because of the use of domain parking used by cybersquatters to achieve their goals.

ICANN intends to open a potentially unlimited number of new top-level domains in 2010. By using advertising-supported domain parking sites that exploit trademarked names, domainers divert traffic away from the brand owners site or link prospective customers to sites offering competitor's products.

Even without those actions, domainers who register and hold valuable brands cause legitimate trademark holders inestimable damage by tying up names and sites that the trademark holder can use for themselves. Domainers spend very little money for start-up costs and maintenance, and stand to make great financial gain.

There is a difference betweeen legitimate domain parking and cybersquatting. In fact, domain parking has become the core legitimate business model for some registrars. Some trademark holders are trying to defend themselves by buying up defensive domain names so that cybersquatters can't use them. They also hire monitoring services, pursue cybersquatters through UDRP and even take cybersquatters to court.

All of these defensive actions cost money. But the registration and maintenance fees for defensive sites names are cheaper than the $1,500 fee to file a UDRP case with the World Intellectual Property Organization (WIPO), especially when the business has hundreds or thousands of complaints with which to deal.

Even after registering and maintaining defensive sites companies still have to be diligent since cybersquatters continue to register new variations. Monitoring services which can alert businesses to cybersquatters cost thousands of dollars annually and it falls upon the business to review and pursue each case. Then the company must decide what action it wishes to take. This can be very costly.

An UDRP complaint filing with a dispute-resolution provider is the least expensive route. Other actions like suing for intellectual property violations under the Anticybersquatting Consumer Protection Act (damages limited to $100,000), attempting to shut down sites under the Digital Millennium Copyright Act, or pursuing trademark abuse under the Lanham (Trademark) Act are far more expensive.

Large businesses are frequently overwhelmed by the magnitude of the problem, the scope of actions necessary to combat it and the costs involved. Small to medium businesses can't afford to take these actions and therefore can't compete with the cybersquatters. Basically, they have no redress because they cannot afford the actions necessary to combat the cybersquatters.