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Cybersquatting Up 8 Percent From 2007

March 16, 2009

The UN’s World Intellectual Property Organization (WIPO) reported 2,329 cases of cybersquatting complaints in 2008, representing an eight percent increase compared to 2007 figures.

The WIPO reported a record number of cybersquatting ““ the practice of abusing trademarks within the domain name system ““ last year.

Meanwhile the Internet Corporation for Assigned Names and Numbers (ICANN) is set to increase the number of new generic Top Level Domain (gTLDs), which could add to the risk of even larger numbers of allegations of cybersquatting, said WIPO.

“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 Francis Gurry, WIPO Director General.

“Cybersquatting remains a serious issue for trademark holders. Supported especially by registrar and registry stakeholders, the sale and broad expansion of new top level domains in the open market, if not properly managed, will provide abundant opportunities for cybersquatters to seize old ground in new domains,”

“If ICANN’s considerations lead it to proceed with the broad introduction of new gTLDs, trademark owners as well as consumers will expect a careful framework to be put into place to address top level operators permitting or undertaking abusive registration practices. To this end, WIPO has been working with ICANN in the development of pre- and post-delegation procedures and standards for the new gTLDs, insofar as they relate to intellectual property.”

“Failure to implement such safeguards carries the risk of stakeholders in the Domain Name System becoming involved in protracted court litigation.”

In case outcomes during 2008, nearly 30 percent were settled without a decision, while complainants won 85 percent of the remainder of cases, according to the report.

In an industry report released last week, MarkMonitor’s Brandjacking Index found that cybersquatting remains to be the most popular method used by fraudsters.

MarkMonitor found that cybersquatting grew by 18 percent during 2008, with a total of 440,584 instances of cybersquatting identified in the 4th quarter, 86,837 instances of false association and 33, 614 instances of pay-per-click abuse.

“That 80 percent of sites identified in our study last year remain active today confirms that abuse is economically sustainable for fraudsters,” Frederick Felman, chief marketing officer for MarkMonitor, told BBC News.

“We expect attacks to grow both internationally and in complexity, further increasing the threat to organizations’ reputations and revenues.”

MarkMonitor said that 68 percent of Web sites that host brand abuse are located in the US. Germany hosts 9 percent followed by the United Kingdom at 4 percent.

“The good news is that brand holders have resources available to them to take action. The companies who are most successful in fighting abuse are those that make defending their brand a priority at the highest levels of management.”

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