How to protect your online brand against cybersquatters
- 13 November 2015
- From the section Business
If you had a business called Widgets R Us and somebody set up shop right next door with a business called Widgets R U, you'd probably be a bit miffed.
Especially if the interloper then demanded money to move elsewhere.
But this sort of thing is happening all the time online. It's called cybersquatting - buying up website addresses, or domain names, that sound very similar to existing well-known brand names.
When Google recently launched its new parent company Alphabet, and the abc.xyz web address, there were more than 20,000 registrations by people attempting to take advantage, registering names like googlefiber.xyz or googledocs.xyz.
Motor manufacturer BMW managed to win back the domain b.mw - which made use of Malawi's top level domain (TLD) - from someone in Japan attempting to sell it for $1m (£660,000), according to a World Intellectual Property Organization ruling in September.
And in January, eBay won one of the largest cybersquatting cases, winning the ownership of more than 1,000 domains that had used its trademark.
Protecting your brand name online is of critical business importance for smaller companies as well.
When West Yorkshire-based furniture retailer Interior Goods Direct was three days late renewing one of its website domain names, it was told someone had already attempted to register it.
"Fortunately we had 30 days to make the payment, so no harm was done. We suspect a competitor of monitoring when our domains need renewing and trying their luck," says Job Brown, head of digital.
"Interior design is a cut-throat world."
The firm operates several websites, such as roller-blinds-direct.co.uk and shutters-direct.co.uk, and obviously doesn't want to spend money on marketing only to see potential customers visiting rival, similarly named websites.
Mr Brown says the company is so concerned about protecting its brand that it has bought more than 100 domain names, "which is way more than any business could reasonably use", he admits.
The potential for cybersquatting has grown since the Internet Corporation for Assigned Names and Numbers (ICANN) - the international body responsible for co-ordinating all these addresses - began issuing hundreds of new generic top level domains (gTLDs), such as .xyz, and .nyc, as well as controversial ones like .sucks and .porn.
"When ICANN proposed allowing these new generic top level domains, the trademark world was not receptive to that idea because they were so concerned about cybersquatting and poaching," says Deborah Lodge, partner at law firm, Squire Patton Boggs.
Those concerns would appear to have been justified.
"We've seen almost twice the number of cases involving these new gTLDs this year versus last year," explains Brian Beckham, head of the internet dispute resolution section at the World Intellectual Property Organization (WIPO).
People were "just overwhelmed" by the number of gTLDs becoming available, he says.
"In the distant history you had .biz or .info and things like this coming online in a small round of five or six new gTLDs," he says. "I think brand owners were much more willing to pay a couple hundred bucks to get Apple.biz for example."
Now the burden of protecting your brand online is potentially much higher as more extensions become available.
Grab your turf
So how do you protect your brand online?
Registering it as a trademark is a good first step as it gives you more rights over related web addresses.
Under ICANN's Trademark Clearinghouse (TMCH) rules, a domain registry must provide a "sunrise period," during which trademarked brands registered in the TMCH can buy domains before they are publicly available.
"[Companies] have an opportunity to grab their turf," says Ms Lodge. "For instance we just registered, during the sunrise period, the domain name squirepattonboggs.law."
But it appears even this system is open to abuse.
Vox Populi, owner of the .sucks domain, was accused by ICANN earlier this year of overcharging for the domain during the sunrise period, with fees climbing as high as $2,499 (£1,645).
Simply buying up lots of addresses that are variations of your brand name is one option. But this can get expensive for a small business, as domains can vary in price from 99p to several thousand pounds.
Mike McLaughlin, senior vice president of domains at GoDaddy, a web hosting company, says: "Really, nobody has to go out and buy hundreds [of domain names] across their brands and keywords to protect themselves.
"Be thoughtful about the handful of names that are most important to you and think about registering those - ones that if you saw in the hands of your closest competitor, you wouldn't be happy about it."
If you think a cybersquatter has bought a domain name that infringes your trademark, you can go through ICANN's uniform domain-name dispute resolution (UDRP) system to have your case heard by a panel of experts.
"The UDRP keeps people out of court," says WIPO's Mr Beckham. "If you're sitting in the United States and there's somebody in Vietnam that's squatting on your brand, you don't have to go a local court."
Another option is the uniform rapid suspension (URS) system, which Mr Beckham describes as a "lighter version."
"At the end of the UDRP process, I get the domain back in my portfolio and keep it out of the hands of other infringers. Under the URS though, it just gets suspended or taken down for the duration of the registration period."
The brand owner then has the choice of trying to obtain the domain in the future or waiting to see if anyone takes it again.
But brand owners don't always win.
In September, tobacco giant Philip Morris lost a case against a man operating the site marlboro.party.
Philip Morris accused him of using Marlboro's cigarette brand to drive traffic and advertising sales, whereas he claimed his use of Marlboro was purely a "geographic term."
"At this time, we continue to explore our options concerning this issue," said a spokesman for Philip Morris USA.
The cybersquatting issue is likely to keep lawyers and dispute resolution panels busy for years to come.