Domain Wars

Trademark owners say cybersquatting has gone too far -- and they're fighting back.

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Deutsche questions the need for new TLDs, given the limited success other new domains have had compared with .com. Nearly three quarters of all domain-name registrations under ICANN's administration are in the .com domain, and 92% are in the .com, .net and .org domains. She alleges that the primary motive for adding GTLDs, driven by registrars, is to sell more defensive domain names to intellectual property holders.

Paul Levins, vice president of corporate affairs at ICANN, calls Deutsche's assertion "mischief-making." Use of the newest GTLDs, such as .tel and .mobi, is growing, he says. Plus, two ICANN-commissioned economic impact reports, published in March, show that increased competition would benefit consumers, adds Levins. He notes that intellectual property concerns "can be addressed through existing legal mechanisms and appropriately designed ICANN procedures for protecting intellectual property."

But businesses worry that, without additional protections, it will be impossible to protect their brand names online in an expanded GTLD universe. Goodendorf, for instance, frets that IHG will be forced to buy the same set of defensive domain names for each new top-level domain. "That will run up our costs even more, [and] it's going to become more confusing for people to find what they're trying to find."

Intellectual property owners complained loudly to ICANN through the IPC, one of several advisory groups to the ICANN board. In response to those concerns, ICANN asked the IPC to come up with recommendations.

It formed the Implementation Recommendation Team, which on May 29 issued a report to ICANN listing suggestions for dealing with the new top-level domains. These include the establishment of a list of trademarked names that can't be sold in the new GTLDs, a provision for rapid takedowns of sites that blatantly violate trademarks, disablement of offending domains instead of transferring ownership and requiring the complainant to pay for their registration, and a mechanism for challenging any new registry that is involved in cybersquatting or colludes with cybersquatters.

A decision on the report's recommendations is expected, possibly as early as this month, following a period of public comment and discussions this summer. It's unclear how many of the report's recommendations will be adopted, but the IPC's Metalitz says ICANN has done a good job so far in responding to the concerns of intellectual property holders. "The board recognized that there is a problem. They won't roll out the new GTLDs until that problem is resolved," he says.

Unfortunately, the proposal applies only to new GTLDs, even though the biggest problems are tied to the existing ones, Metalitz says. Even if every recommendation is adopted for the new GTLDs, getting the same rules applied to existing domains like .com will be tough, he adds. "The problem is, you have entrenched interests that are resistant to change."

However, ICANN may be able to apply the new rules as existing registrar contracts expire, Levins says. "We may be able to retrofit the features that are in the new GTLD agreements to address abuse."

Meanwhile, the cybersquatting pandemic shows no signs of abating. While ICANN has made strides in improving oversight through its audits of registrars, the potential financial gains from cybersquatting remain too high and penalties too small to stop the growth in domain-name brand abuse, let alone deter the practice. That's why the IRT recommendations, even if applied to existing top-level domains, aren't likely to completely solve the underlying problem.

But the GTLD issue has intensified the focus on trademark abuse in domain names, and the matter now has ICANN's full attention. So the GTLD proposals could be a catalyst for change -- eventually. For Metalitz and the intellectual property owners he represents at the IPC, those recommendations amount to one small step in the right direction.

This version of this story originally appeared in Computerworld's print edition. It's a modified version of an article that first appeared on Computerworld.com.

Copyright © 2009 IDG Communications, Inc.

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