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Cyber-Squatter Disputes – Are you Master of Your Domain?

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By Michael Nibaldi, Lawyer, Mason Sier Turnbull

Business is changing. For many companies, it isn’t enough anymore to get by with a brick and mortar retail shop. To keep up with the ever expanding online world, entrepreneurial businesses are expanding and are now taking orders and selling goods and services online.

Business must keep innovating to stay competitive and opening a website or online store is a great way to do so. Those businesses that have taken that leap to begin trading online know that it takes significant funds and effort to develop a successful online store, but that the rewards that come with broadening your customer base make it worthwhile.

Imagine that you have done all the leg-work to start trading online, you have chosen your domain name and registered your trade marks, but unfortunately, someone has already registered the domain name you needed.

Often domain names are registered, but never used. The website sits there unused, the owner waiting and hoping that someone will make them a lucrative offer to purchase the domain name from them. This was very common a number of years ago, when companies had no alternative other than paying the owner for the domain name, and still occurs even today.

This practice is called cyber-squatting, and fortunately now there is something that can be done to get the domain name, without having to resort to paying the squatter.

How Domain Name Registration Works

There are 22 generic top level domains, such as .com, .net, .co, .org, .tv, etc. These are referred to as gTLDs and will soon even be expanded to generic top level domains, such as .food, .coke or .nike. There are also 252 country code top level domains, such as .com.au and .co.uk.  Australian companies should at least register their domain in .com and .com.au, but should consider registering in other countries, if the nature of the company makes it worthwhile to do so.

Defending Your Domain

There are two approaches to take to defend your domain names, a proactive and reactive approach. The proactive approach involves registering your domain name early, preventing others from ever registering that domain name in any country. However, this doesn’t help you if someone already has registered the domain name.

The reactive approach involves challenging domain names that may be registered in bad faith or infringe a trade mark. The way to challenge a domain name differs depending on where it is registered. For example, if you are challenging a .com.au domain, the dispute will be governed by the .au Dispute Resolution Policy (the auDRP). Many other disputes are governed by the Uniform Domain Name Dispute Resolution Policy (the UDRP). Disputes in these fields are generally cheap compared to comparative litigation in courts, and can be dealt with in a short time frame.

Depending on the specific circumstances, there are other options, which include challenging the validity of a domain name and applying for its registration to be cancelled or simply registering the domain name in a back order process, hoping that the owner doesn’t renew the domain name once the current registration expires. There are risks to taking such a cancellation approach, so any strategy should be well planned.

Sometimes a competitor may own a Domain Name that is similar to a trade mark you have registered, trying to divert customers to their own website or perhaps even selling counterfeit products. Depending on the circumstances, this may not amount to trade mark infringement, leaving you without a traditional remedy. Fortunately, these approaches can also be used in these situations to stop others from profiting off your company’s likeness or trade marks.

Conclusion

A strategy to deal with the registration of domain names and trade marks and any necessary challenges to domain names should be prepared and implemented to take into account the specific circumstances of each situation.

Whether you are registering a new domain name, or fighting for one that you should rightfully be able to use, the key is to act quickly. Generally it is much easier to be proactive and register in multiple domains, however as it is not always practical to register in ever ccTLD, the reactive approach should also be considered when developing a domain name strategy.

Mason Sier Turnbull can assist you with your domain name disputes and can advise you as to a strategy for your company going forward. Please contact our Corporate Advisory team for further information on (03) 8540 0200.