Domain-name wars: Rise of the cybersquatters

Computerworld - When the Web site FreeLegoPorn.com began publishing pornographic images created with Lego toys, trademark owner Lego Juris AS, which sells the popular plastic building blocks for children, acted quickly.

"The content available on the site consisted of animated mini-figures doing very explicit things. We were not amused," says Peter Kjaer, an attorney for Billund, Denmark-based Lego.

Lego didn't go to court. Instead, it filed a complaint with the World Intellectual Property Organization's (WIPO) Arbitration and Mediation Center, which ruled in its favor. The domain registrar for FreeLegoPorn.com, Scottsdale, Ariz.-based GoDaddy.com Inc., eventually shut down the site and transferred the domain name to Lego, in compliance with the Uniform Domain Name Dispute Resolution Policy (often called the UDRP), a procedure set up by the Internet Corporation for Assigned Names and Numbers (ICANN) to address domain-name brand abuse.

The UDRP process, set up 10 years ago, saves businesses time and money by getting offending sites down relatively quickly and without lengthy lawsuits. But it hasn't deterred cybersquatters, who lay claims to domain names that play on a virtually unlimited number of variations of well-known brand names, including common misspellings of those names, to drive traffic to their own sites.

People intending to visit a brand's Web site may instead end up on a cybersquatter's site and then be redirected to a phishing site, a Web page with objectionable content or -- most commonly -- advertising that may link to competing products and services. The most popular brands can be the target of thousands of cybersquatting sites.

Cybersquatting can damage a business's brand reputation and result in substantial losses. One company that has tried to defend itself is Verizon Communications Inc., which has aggressively pursued cybersquatters and reclaimed thousands of domain names related to its businesses. This year it activated many of those and set them up to redirect users back to its own Web site.

"We're on track to bring in 9 million new visitors, just from the names we've been able to get back," says Sarah Deutsche, vice president and associate general counsel at Verizon.

Malicious sites can create havoc with a brand's reputation. Sometimes, criminals copy a brand's entire Web site in order to collect usernames and passwords from unwitting visitors. They then try to figure out where else on the Web those names and passwords might work. "Guess the fake. You can't, usually. It's pretty nuts," says Fred Felman, chief marketing officer at MarkMonitor Inc., a San Francisco-based domain registrar that also monitors brand-abuse activity for corporate clients.

Eighty percent of the cybersquatting sites MarkMonitor tracked in early 2007 were still online one year later, Felman says. Why aren't brand owners pursuing them? Some businesses have had to prioritize which cybersquatters to pursue, while others have given up on the problem or chosen to ignore it.