Speculative domain name registration
Cybersquatters register trademarked domain names with the principal aim of selling them to the trademark owners for financial considerations far in excess of their registration costs. The squatter can either set a fixed price for immediate redemption of the squatted domain name, or enter into negotiations.
Out-of-court UDRP procedure
In the event of a dispute over a cybersquatted domain name, brands frequently use the international out-of-court “UDRP” procedure (Uniform Domain Name Dispute Resolution Policy) to settle their dispute within two to three months.
To be successful, a cybersquatting victim must meet the following three criteria:
- the domain name registered by the registrant is identical or confusingly similar to a trademark or service mark in which the complainant (the natural or legal person filing the complaint) has rights; and
- the domain name holder has no rights or legitimate interests in the domain name; and
- the domain name has been registered and is being used in bad faith.
Over 90% of decisions are favorable to trademark holders, who recover or have cancelled cybersquatted domain names.
Pay the cybersquatter less than the UDRP?
However, the UDRP procedure comes at a cost that is borne solely by the brands that have been the victims of cybersquatting: $1,500 to be paid to WIPO, plus the costs of the law firm representing them. The cybersquatter risks only the loss of the disputed domain name, which he has often bought for a few euros from a discount registrar.
Before initiating a “UDRP” procedure, the trademark will often put the cybersquatter on notice to surrender the disputed domain name free of charge. The cybersquatter may try to sell the domain name to the trademark at a lower price than that of the procedure, such as the typosquatting naxtixis.com at $788, galerieslafayette.biz at €900, sporteleclerc.com at €1,200, or a bargain price of $6,000 for the batch of 8 domain names squatting on CIC bank cicbankonline.com, cicdigitalbank.com, ciconlinebank.com, creditmutueldigital.com, digitalcic.com, digitalcreditmutuel.com, ecicbank.com, onlinecreditmutuel.com. Brands face a difficult choice:
- pragmatic decision to buy the squatted domain name at a lower price than the out-of-court procedure
- decision toattack on principle and not pay someone who steals the trademark
Solidnames prefers to take legal action to prevent the cybersquatter, who has been paid handsomely for his misdeed, from being encouraged to register other cybersquatting domain names and continue to reap the profits.
In May 2017, the French industrial group specializing in urban advertising, JCDecaux preferred to initiate a UDRP to recover the jcdecaux.cc domain name instead of buying it back for $2,500.
Exorbitant price for buying a domain name
Some of the prices demanded by cybersquatters spare brands the question of redemption.
In July 2017, a Bangladeshi national asked Alstom for $10,000 to surrender the disputed domain name alstom-powers.com, which he was trying to legitimately exploit to no avail.
In 2016, a private individual offered the Mozilla Foundation $10,000 to buy back the squatted domain name firefox.lol. The browser disagrees, and easily wins its out-of-court proceedings.
In March 2017, a Chinese third party put the domain name cartier.shop up for sale for a cool $58,888. The luxury goods company recovers its squatted trademark in the new .SHOP internet extension under the UDRP.
A French private individual who has declared that he once worked for Française des Jeux for two months has asked for €300,000 to return the disputed francaisedesjeux.co web address.
The cybersquatter behind pictet.online offered the Swiss bank Pictet the domain name for 4 million Swiss francs, or around 3.6 million euros. During proceedings in 2016, the defendant proved less greedy and proposed a settlement of 100,000 euros, which was naturally also refused by the bank.
Downward negotiation is common after an initial refusal. The holder of pepsi.ir initially asked Pepsi for $200,000 to relinquish its Iranian domain name before attempting a final offer of $2,000, also rejected in 2016 by the soft drink.
Not all cybersquatters ask for crazy sums, but a simple exchange of goods. The owner of royaloak.watch is offering to transfer the domain name to Audemars Piguet in exchange for a Royal Oak watch, the first prices of which exceed several thousand euros.
Brands that buy back their squatted domain names
The speculation surrounding cybersquatted domain names is stimulated by certain companies who opt for the pragmatic, low-cost buyout in the face of an out-of-court procedure with an uncertain outcome.
Solidnames offers to negotiate and buy back domain names as an anonymous third party, or to call on a leading legal partner to legally recover disputed names.
<script type=”text/javascript”><!– –>document.getElementsByClassName(‘et_pb_promo_button’)[0].addEventListener(“click”, function() { document.getElementsByClassName(‘sellsy-header’)[0].click(); }, false);<!– –></script>