New generic TLDs will open cyber squatting floodgates

Cyber squatting involves individuals or firms registering domain names with the sole intention of selling them on at an inflated price to a trademark holder whose name appears in the domain.

Wipo, the UN body whose Uniform Domain Name Dispute Resolution Policy helps to adjudicate in cyber squatting cases, recently reported an eight per cent increase in complaints.

The figure for 2008 stood at a record 2,329, after individuals and organisations as diverse as the BBC, Scarlett Johansson and the English Premier League filed cases.

Icann is set to open up large numbers of new gTLDs by the end of the year, and Wipo has warned that a "careful framework" needs to be in place to ensure that cyber squatting does not run out of control.

"The creation of an unknowable and potentially vast number of new gTLDs raises significant issues for rights holders, as well as internet users generally," said Wipo director general Francis Gurry.

"Cyber squatting remains a serious issue for trademark holders. Supported especially by registrar and registry stakeholders, the sale and broad expansion of new TLDs in the open market, if not properly managed, will provide abundant opportunities for cyber squatters to seize old ground in new domains."

However, Icann has already been proactive in its attempts to address the potential problems associated with cyber squatting. The organisation announced plans at its recent International Public Meeting in Mexico to create an Implementation Recommendation Team comprising a diverse group of industry stakeholders, which will report back in May.

"The board has clearly heard and believes strongly that the concerns of trademark holders must be addressed before this process is opened for applications," said Peter Dengate Thrush, chairman of Icann's board.

"The establishment of this team is an attempt to get proposed solutions from the people with skills in trademark protection and other issues."

Wipo is also working with Icann to safeguard legitimate trademark holders' rights in the pre-delegation and post-delegation (application and operational) phases of a domain name.

Phil Kingsland, director of marketing at .uk registry Nominet, argued that businesses could struggle to manage the proliferation of new gTLDs when they come on the market, and must decide whether to register defensively, or risk cyber squatting or lost revenue.

"Their concern will be how to find out about all of them," he said. "There should be one area of the business responsible for registering domains, and it needs to understand the value of having a new domain and the potential traffic that could be lost otherwise."