Jakarta Globe, May 14, 2012
Coca-Cola
had to win a complaint at a United Nations agency last year to get control of
an adult website called pornforacoke.com.
Online name
theft is called cybersquatting — and companies with recognizable brand names
say it is about to get much worse. The organization that manages the Internet’s
addresses is moving ahead with plans to add as many as thousands of new Web
suffixes. Right now, there are a limited number, such as .com and .net. The
group wants to open it up to new endings like .shop or .music.
That, in
turn, would add the potential for millions more websites, providing fresh
channels for cybersquatters to hijack brand names for their own sites and
siphon consumer traffic and revenue.
“It’s quite
literally a new gold rush,” Fabricio Vayra, assistant general counsel for Time
Warner Inc., said in an interview.
The
Internet Corporation for Assigned Names and Numbers, a nonprofit that operates
under a U.S. Commerce Department
contract, is allowing companies, cities and interest groups to apply for their own extensions to the right
of the dot in a Web address.
For
$185,000, New York City, for instance, could apply for .nyc, which would allow
for new websites with the .nyc ending, such as concerts.nyc. The risk is that
cybersquatters could be among the buyers of such .nyc sites.
Lucrative
Misspellings
The
Association of National Advertisers, a Washington-based trade group, assembled
an industry group last year including Coca-Cola, Johnson & Johnson and
General Electric Co. to oppose Icann’s expansion of suffixes, known as
top-level domains, saying they will increase costs for companies, confuse consumers
and spark new Internet crime.
Petro
Kacur, a spokesman for Atlanta-based Coca-Cola, declined to comment on
cybersquatting or the company’s arbitration case over the pornography
site.
Cybersquatters
go to companies that sell names on existing top-level domains like .com to buy
unused or misspelled derivatives of brands, creating sites such as
verizoniphone4s.com or verison.com.
Squatters fill their websites with pay-per-click advertising links to
generate revenue, Claudio Di Gangi, Internet policy manager for the
International Trademark Association, a New York-based trade group, said in an
interview.
Such sites
can also be used to distribute viruses and malicious software, or sell
counterfeit goods such as fake pharmaceuticals, Di Gangi said.
‘Vast New
Spaces’
“All these
new domains will possibly open up vast new spaces for cybersquatters,” Francis
Gurry, director general of the UN’s World Intellectual Property Organization,
said in an interview. “The cost of surveillance and enforcement will go up.
That’s a big risk for businesses.”
Verizon
Communications amassed as many as 12,000 site names through legal action
against cybersquatters before paring down its portfolio to about 6,000 by last
year, Sarah Deutsch, associate general counsel, said in an interview.
“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,”
Deutsch said.
Phishing
Fears
The US
Federal Trade Commission, in a December letter to Icann, said the domain-name
expansion could magnify the problem of Internet scams such as phishing, in
which e-mails coming from legitimate-sounding Web addresses seek people’s
passwords or other information.
The FTC,
which has authority to protect consumers against unfair and deceptive trade
practices, recommended that Icann turn the domain-name expansion into pilot
program and limit the number of new suffixes.
Icann,
based in Marina del Rey, California, said its expansion is designed to promote
online innovation and competition.
The group
began accepting applications for new suffixes in January. It received more than
2,000 submissions before shutting its application system April 12, citing a
software malfunction that allowed some users to view information about other
applicants. The group said it plans to reopen the system May 22 and officially
close it May 30.
Icann said
it has received $350 million in application fees, five times its budget for the
fiscal year ended June 30.
Mike
Tyson
Trademark
holders filed a record 2,764 cybersquatting cases with the World Intellectual
Property Organization in 2011, up 2.5 percent from the previous highest level
in 2010, the UN agency said in a March 6 news release.
Apple, Yale
University and retired boxer Mike Tyson, in addition to Coca-Cola, have used
the UN agency’s arbitration process.
There are
too many infringing websites to go after all of them, Verizon’s Deutsch said.
Her company focuses on sites that are attracting a large volume of Web traffic
or have strategic importance, such as targeting consumers before the
introduction of a new product or service.
Taking
domain disputes to arbitration costs between $5,000 and $10,000 and litigation
in US courts can run into the millions of dollars, Deutsch said.
Icann is
creating trademark protections within its program, Kurt Pritz, the group’s
senior vice president for stakeholder relations, said in an interview. They
include a clearinghouse for trademark data, a rapid-suspension process for
infringing websites, and a procedure to terminate Internet registries that
facilitate abuse, he said.
“The new
top-level domains will have those added protections,” Pritz said. “Will it
eliminate cybersquatting? No. Will it make it more difficult? Yes.”
Do Not
Sell
The new
suffixes will be less attractive to cybersquatters because they’ll have less
traffic than established extensions like .com, he said.
ANA, the
advertisers’ group, urged Icann in February to set up a do-not-sell list of
trademarks that would stop applicants from acquiring other companies’ brands as
a Web suffix. The group will seek similar defenses for trademark owners once
new suffixes are created and start selling names, Dan Jaffe, ANA’s executive
vice president for government relations, said in an interview.
Vayra of
Time Warner served on an Icann working group that recommended trademark
safeguards that he said were watered down.
“We’re
going to have increased expense, increased policing and, bottom line, all the
ills that come with an increased cybersquatting landscape,” he said.
Bloomberg
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