Brands must prepare for cyber threat

22 May 2012

NEW YORK: Companies must prepare for the threat of "cybersquatting", where third parties take over brand-related web addresses - a problem firms like Google and Verizon have already moved to tackle.

ICANN, the body managing online domain names, is seeking to expand the range of available suffixes from the limited current choices, such as .com and .net, to include options like .brand or .nyc, potentially creating huge numbers of new sites.

Fabricio Vayra, assistant general counsel for Time Warner, the media owner, was a member of an ICANN working group assessing this area, and told Bloomberg its suggestions had been more restrictive than those now being proposed.

"It's quite literally a new gold rush," he said. "We're going to have increased expense, increased policing and, bottom line, all the ills that come with an increased cybersquatting landscape."

Among the fears for brand owners is that third parties will buy plausible or misspelled addresses and fill them with inappropriate content, sell counterfeit goods or spread viruses.

Last year, Coca-Cola, the soft drinks specialist, turned to the World Intellectual Property Organisation, part of the UN, to successfully shut down an adult site called "".

"All these new domains will possibly open up vast new spaces for cybersquatters," Francis Gurry, director general of the World Intellectual Property Organization, said. "The cost of surveillance and enforcement will go up."

Some 2,764 cases tied to "cybersquatting" were filed with WIPO in 2011, up 2.5% on 2010. Applicants included Apple, the electronics pioneer, Yale University, and even Mike Tyson, the ex-boxer.

Verizon Communications, the media and telecoms conglomerate, had accrued 12,000 such sites via legal action before last year, when it cut this total to 6,000. The firm targets properties with high visitor numbers or strategic importance.

"We're very concerned the top-level domain expansion is going to turn something that's a bad problem into something that's out of control for most brand owners," Sarah Deutsch, its associate general counsel, said.

Google, the online giant, also won a case earlier this month covering 763 domains, while InterContinental Hotels Group laid hold of 1,542 sites through a similar process in 2009.

ICANN received over 2,000 applications for new addresses from January to April 12, when its system was closed due to a software flaw. This yielded $350m in fees, five times its latest annual budget.

Kurt Pritz, SVP, stakeholder relations, at ICANN, said a "clearing house" for trademarks, alongside faster and tighter restrictions on sites and domain providers would all be introduced going forward.

"The new top-level domains will have those added protections. Will it eliminate cybersquatting? No. Will it make it more difficult? Yes," he said.

Data sourced from Bloomberg; additional content by Warc staff