Cybersquatting: Trends and Strategies for Brand Owners

Feb 2, 2021, 14:13 PM

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This article was first published in the World Trademark Review magazine on 28th January 2021.

Since its inception, the Internet has undoubtedly led to ongoing digital transformation for a number of sectors. Yet, while presenting many opportunities for users, the Internet has also been a hunting ground for hackers and criminals looking to exploit the web to target people and businesses.

For thirty years now, one of the most common forms of fraudulent activity on the Internet remains cybersquatting. Cybersquatting takes various forms. One of the most common is when a person registers a domain name containing a protected brand to take advantage of that brand's reputation.

Is Cybersquatting Still Happening?

In 1999, the Uniform Domain Name Dispute Resolution Policy (UDRP) was introduced as a tool to help brand owners tackle cybersquatting. With more than twenty years since its launch: is domain squatting still relevant?

Unfortunately, not only is domain squatting still relevant, but other forms of cybersquatting have continued to dramatically grow over the years. The easy access to the Internet has allowed squatters to register more and more domain names, to exploit brand owners. Since the launch of the UDRP, the World Intellectual Property Organisation (WIPO), which administers the UDRP, has dealt with more than 50,000 cases, and over 91,000 domain names. Each year, case filings increase, and WIPO saw record numbers of 4,204 cases filed in 2020. WIPO has attributed much of this increase to fraud, including phishing, counterfeit sales, and other forms of online trademark abuse. This rise was also fuelled by the COVID-19 pandemic.

At one stage or another, all global brands, such as Dell, Coca-Cola, Microsoft, and LEGO – the top UDRP filer with more than 850 cases filed to date – have had to fight against cybersquatters infringing on their protected trade or service marks.

Cybersquatting Trends

Trends in cybersquatting have evolved over the years. In the early days, infringers registered domain names to gain profit through ad revenue. But now, pay-per-click (PPC) pages are no longer the driver of domain name registrations. Cybersquatters have adopted other tactics to gain profit from domains' registrations.

For example, the main trend seen in the last couple of years is the surge in phishing attacks. Phishing often takes the form of emails, targeting clients or employees of a brand's owner to get sensitive information, such as passwords, names, email addresses and bank details. Phishing attacks start with someone registering a domain name similar enough to the original brand so that victims fail to see the difference at first glance.

Phishing can have disastrous consequences for brand owners, and not only affecting their business operations but have a long-term impact on their reputation. Furthermore, the COVID-19 pandemic has encouraged cybercriminals to conduct more malicious activities, resulting in a sharp rise in spam, malware and other scams in the digital space. Brand owners also experienced a spike in counterfeit goods being sold online. With physical stores remaining closed in most parts of the world due to selling non-essential goods, consumers are looking to buy the same products online and are more likely to come across counterfeits.

Strategy is Key for Brand Owners

The key for brand owners, who are victims of cybersquatting, is to ensure that their brands are protected. Registration of trademarks in jurisdictions where the brand operates will help enforce protected rights. While the UDRP is the preferred action to take if a company is a victim of cybersquatting, brand owners should consider other steps before launching a domain dispute:

• Monitoring a brand will allow for complete digital visibility as to their infringements online. Being proactive rather than reactive will help to mitigate threats and anticipate future risks.
• Taking preventive measures, such as defensive registrations and/or blocking services. While retrieving all infringing domain names can be an effective strategy for some brands, this is often cost-prohibitive. Brand owners now tend to be more selective of their domains to save costs and reduce their portfolio. Blocking services such as Domains Protected Marks List (DPML) can be an interesting alternative option for some companies. This allows brand owners to protect their trademarked terms in more than 240 extensions, preventing anyone from registering those types of domains for a specific period.
• Being part of the Trademark Clearinghouse (TMCH) database. While TMCH is not a right protection mechanism by itself, it could dissuade future infringers from registering their brand in domains and gives brand owners access to the Uniform Rapid Suspension (URS). This mechanism is an expedited and inexpensive process, resulting in a domain name suspension if found to be a clear-cut case of infringement.
• Sending cease and desist letters to infringers can help resolve matters amicably and result in the transfer of the domain name at issue to the brand owner.
  If the website content is the main concern, enforcement measures through Internet Service Providers (ISP) is an effective option. This will remove the content or see the domain name suspended.
• Ultimately, enforcing rights through domain arbitration acts as a great deterrent for cybersquatters as all decisions are made public. Taking enforcement actions also have several benefits for consumers; it increases customer confidence, and allows them to have a real brand experience without being led astray.

The rise in cybersquatting cases shows that from well-known brands to smaller businesses, no one is spared when it comes to online infringements. A good brand protection strategy will help companies to take appropriate action and enforce their rights when needed.