| Abstract: | Legal context: Recent years have seen a resurgence in the practice of cybersquatting,and in particular cybersquatting that monetizes domain namesthrough pay-per-click advertisements. Existing statutory andadministrative anti-cybersquatting tools were not designed tocope with the advertising-based model of cybersquatting. Asa result, brand owners lack effective tools to combat moderncybersquatting. Key points: (1) Where cybersquatters originally monetized their domain nameportfolios by ransoming small numbers of domain names to brandowners, they now use pay-per-click advertisements spread overmassive portfolios. Technological advances in the domain namesystem will continue to increase the opportunities for cybersquattersto expand these portfolios. (2) Existing statutory and administrativeanti-cybersquatting tools are out-dated and ineffective. TheUniform Domain Name Dispute Resolution Process is procedurallyincapable of coping with large portfolios of infringing domainnames and substantively out of sync with national IP laws. Traditionallitigation is too expensive and inefficient to offer a workablesolution for brand owners. (3) Both administrative and legalremedies for cybersquatting have inherent flaws that cannotpractically be remedied. A new anti-cybersquatting regime musttherefore allow them to work together. The UDRP should be procedurallyupdated to allow limited discovery and facilitate large-scalecases, and an optional choice of law clause should be introducedto bring UDRP panel decisions more in line with national IPlaws. Likewise, those laws should be revised to give explicitdeference to UDRP decisions in litigation arising from the samefacts as the UDRP action. Practical significance: Cybersquatting can injure a mark's distinctiveness and onlinerecognition, and contextual advertisements can divert customersfrom the targeted brand's website. If anti-cybersquatting toolsdo not keep pace with cybersquatters' strategies, these problemswill make it increasingly difficult for brand owners and customersto connect in the domain name system. The proposed revisionsto the anti-cybersquatting regime will enable brand owners toprotect their domain names more efficiently and to deter cybersquatters. |
