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WIPO 2010 ADR Report: Cybersquatting Hits Record Level


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: April 2, 2011 @ 1:49 pm
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The World Intellectual Property Organization (WIPO) recently announced that the number of cybersquatting cases has reached an all time high. In 2010, trademark holders filed 2,696 cybersquatting cases relating to some 4,370 domain names with the WIPO Arbitration and Mediation Center (WIPO Center) under procedures based on the Uniform Domain Name Dispute Resolution Policy (UDRP). This spike in the number of domain name disputes caused by cybersquatting represents an increase of 28% over the 2009 level and of 16% over the previous record year, 2008.

Cybersquatting is the act of registering a popular Internet address, such as a company name or the name of a famous individual, with the intent of selling it to who the real world would perceive to be the “rightful” owner of that address or using the name to unlawfully collect traffic and do business off the name of the company or famous individual. Thanks to the Trademark Cyberpiracy Prevention Act, which was passed as part of the Consolidated Appropriations Act of 2000, cybersquatting is specifically prohibited by statute in the United States. The TCPA is codified primarily at 15 USC 1125(d) and 15 USC 1129(b). Notwithstanding, it continues to be a major problem, as you can see from the case filing statistics below.

Despite being against the law in the United States those facing cybersquatters are always better off to catch the problem quickly and proceed with mandatory Arbitration, for example through WIPO’s domain name dispute resolution. For a dispute that has between 1 and 5 domain names the filing fee for a single panelist is $1,500 USD, and if you would like a panel of three arbitrators the cost is $4,000 USD. See WIPO filing fees. Of course, there are likely going to be attorneys fees associated with putting the complaint together and filing, but even with attorneys fees to prepare and file the complaint and forward the complaint through the system you are looking at a fraction of the cost of resorting to litigation in a State or Federal Court in the United States. Moreover, Arbitration is mandatory, which means that it really doesn’t matter if the scoundrel cybersquatting participates or not. By registering a domain name everyone agrees to submit to Arbitration under the UDRP, so even those who refuse to communicate with you and might be found only in some remote part of the world can be reached and the domain name wrestled away.

Cases filed with WIPO in 2010 included parties from 57 different countries, and the cases were decided by 327 panelists from 49 different countries in 13 different languages.  The predominant languages in order of frequency are: English, Spanish, French, Dutch, German, Chinese, Korean, Portuguese, Italian, Turkish, Romanian, Swedish, and Japanese.  In 91% of cases, panels found evidence of cybersquatting, deciding in favor of complainants.

The top five areas of WIPO complainant activity were retail, banking and finance, biotechnology and pharmaceuticals, Internet and IT, and fashion. WIPO’s 2010 caseload featured well-known names from business and public interest sectors. Most of these cases (82%) concerned registrations in the .com domain.

Among WIPO cases, the percentage related to country code Top Level Domains rose to 15% of all cases in 2010 from just 1% in 2000. National registries designating WIPO to provide domain name dispute resolution services increased to 65 in 2010 from 62 in 2009. Among the new additions, the policy for the .BR domain of Brazil is inspired by the UDRP but also imports several modifications specific to expressed local needs.

Since the UDRP’s launch in December 1999, the WIPO Center has received over 20,000 UDRP-based cases, covering some 35,000 domain names in both generic and country code Top Level Domains (gTLDs and ccTLDs).

“The WIPO Center is the leading provider of domain name dispute services and provides a rich range of resources for users and the general public. The just-released major update to the WIPO Overview is an excellent illustration of these resources and reflects the long experience of the WIPO Center,” said WIPO Director General Francis Gurry.

The WIPO Overview referenced by Gurry, referred to as WIPO Overview 2.0, is a newly released compendium of everything you need to know about dispute resolution proceeds.  WIPO Overview 2.0 addresses questions that commonly arise in proceedings under the UDRP, as well as information on panel positions on key procedural and substantial issues.  In fact, the WIPO Overview 2.0 includes new decision references supporting each line of opinion, with over 380 decisions  from over 180 different UDRP panelists.  “The revised WIPO Overview distills panel findings in thousands of domain name cases filed with WIPO since its launch,” added Mr. Gurry.

In addition to domain names disputes, the WIPO Center in 2010 continued to administer cases under the WIPO Mediation, Arbitration, and Expedited Arbitration Rules. As of December 2010, the WIPO Center had administered 240 mediations and arbitrations, the majority of which were filed in the last six years by large companies, small and medium sized enterprises, research organizations and universities. These cases involved a range of issues, such as patent infringement, patent licenses, information technology transactions (including telecommunications), distribution agreements for pharmaceutical and consumer products, copyright issues, research and development agreements, trademark co-existence agreements, art marketing, artistic production, and media-related agreements, joint venture agreements, and cases arising out of agreements in settlement of prior multi-jurisdictional intellectual property litigation.

In May 2010, the WIPO Center also established a presence in Singapore. With the increasing economic importance of the Asia Pacific region, the disputes that are an unavoidable part of doing business can benefit from alternative dispute resolution options, especially in cross-border transactions. This new Singapore activity includes the provision of party guidance and training in intellectual property alternative dispute resolution.

In addition to case services under the WIPO Rules, the WIPO Center also works with industry associations to develop dispute resolution procedures tailored to their specific needs. For example, in 2010 the WIPO Center developed WIPO Expedited Arbitration Rules for EGEDA, the collecting society that represents and defends the interests of audiovisual producers in Spain.

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Posted in: International, Internet, IP News, IPWatchdog.com Articles, Trademark, WIPO

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

4 comments
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  1. Thank you for posting this information.

    Unfortunately the headline (which was kept as suggested by WIPO) is incorrect though. Not cybersquatting has hit new records levels, but the amount of filed cases has. You should put the numbers of cases in relation to the amount of domains registered and also consider the percentage of cases where the domain was transferred to the complainant (91%). In addition another important factor is to consider if the respondent actually did respond or just let WIPO decide the case without counter-argument.

    Also online the number of filings increased, not the number of domain names.Last but not least, the study should probably also take the number of disputes filed with other arbitrators into consideration.

  2. Frank-

    Do you have information that more domain names were transferred in previous years?

    I don’t see that the respondent not participating would impact the determination whether there was cybersquatting. Sure, with only hearing one side of the case the deck is stacked against the party not responding, but the complaint still needs to satisfy the requirements the the requisite proof. Further, in my experience in many of the situations where there is no response it is because there was really cybersquatting to begin with, so I wouldn’t suggest eliminating those without a response as being at all a useful way to determine actual levels of cybersquatting.

    I agree it would be nice to have the data about other arbitrators, but it is my understanding that WIPO is the predominant provider. I know that is the provider I have used when representing clients in the past.

    Cheers.

    -Gene

  3. Thank you for responding Gene – I’ll actually quote Andrew from Domain Name Wire here, since he did some of the research and also said that “Cybersquatting Enforcement Hits Record Level” would have been a better title.

    I briefly analyzed the rise in UDRP cases when I wrote about this last month. A couple notes I made:

    – While the number of cases was up, the ratio of cases to total domains registered has only been lower once in the past decade.

    – The spike in cases can largely be attributed to a few mass filers using trademark enforcement companies. For example, Lego filed over 100 cases with the help of Melbourne IT Digital Brand Services. I should also note that Lego’s actions seemed to be directed at people who were selling Lego goods on these web sites — it seems to be less of a cybersquatting issue than an a counterfeit/unauthorized reseller crackdown.

    You’re right that WIPO is the largest arbitrator for UDRP decisions – a quick search at NAF reveals that they have 14809 cases in their database since 2000. A list of approved arbitrators is on the ICANN site. According to UDRPSearch NAF handled 2,033 cases in 2010 and WIPO handled 2,696

    I also found the WIPO statistics for 2009 on their site. Looks like in 2009 only 84% of the cases resulted in a transfer, so there has been an increase if we leave the amounts of total domain name registrations out of the statistics. In 2010 it was actually 88.09% according to their database, even though they say 91% in their report. Maybe the difference accounts for ccTLD cases.

    Another report I’d like to see is the numbers of cases were reverse hijacking attempts have been found. It appears that there are now penalties/fines in play, just like in this recent case.

  4. Here is a similar story

    The UN’s World Intellectual Property Organisation has reported a 28 percent year-on-year rise in complaints of cyber (or domain) squatting being submitted for arbitration.

    Domain squatting referred to registering, trafficking in, or using a domain name in bad faith or with the intent to profit from the goodwill of a trademark belonging to someone else.

    In 2010, trademark holders filed 2,696 cyber or domain squatting cases covering 4,370 domain names with the WIPO arbitration centre.