Domain names are generally registered on a first-come-first-serve basis. There is nothing worse for someone wanting to establish their brand on the internet than to find out that the domain name they had planned for their website has already been registered. While this may not necessarily have been done with malicious intent, cybersquatting is a common problem around the world and affects many businesses in New Zealand each year. Worldwide, the numbers are steadily on the rise. In 2020, the World Intellectual Property Organization WIPO registered its 50,000th cybersquatting case within 2 decades of operation.
What is cybersquatting?
The term cybersquatting or ‘domain squatting’ generally refers to registering or using a domain name in bad faith, with the intent to make a profit by either leasing or selling the domain name back to the “brand owner” at a much higher price than a domain is usually priced. Cybersquatters also tend to register domain names that are similar to brands, company names or even names of prominent people.
Similarly, competing businesses might register domains similar to your brand or company name in order to divert potential customers away from you. Either way, it causes frustration for the user and the affected business which may be losing out on revenue.
How can I protect myself from cybersquatting?
Most countries have taken legal action against cybersquatting in order to protect brands, trademarks and businesses. However, not every domain dispute is the result of cybersquatting. Sometimes people may have simply forgotten to renew their domain which is then claimed by someone else. Those and similar situations may be resolved outside court.
The dispute resolution pilot program
In New Zealand, domain disputes are handled by the Domain Name Commission (DNC). In March 2022, the DNC started an online dispute resolution pilot program, aimed at helping disputing parties to achieve a legally binding agreement outlining who has the right to the domain name, whether one party needs to pay money to the other, and on what date the agreement comes into effect. Once signed, the DNC has the authority to legally enforce the agreement.
Filing an application within the pilot program is free. It consists of 2 stages.
- E-negotiation – parties can enter into an automated online bidding process at the end of which the system generates a proposed figure needed to settle the dispute
- Informal Mediation – parties negotiate an agreement with the help of an accredited mediator employed by the DNC
Filing an official complaint
If the free pilot program has not produced an outcome or in more severe cases of domain ownership disputes, affected parties can submit an official complaint to the DNC for expert determination. Going to go down this track is not free, and your complaint must prove on the “balance of probabilities” that:
- You have the rights to a name or trademark which is identical or similar to the .nz domain name in dispute
- The registration of the .nz domain name in the hands of the current registrant is unfair.
You will need to include evidence such as birth or marriage certificates for personal names, proof of having a trademark or design registered with the Intellectual Property Office of New Zealand or the Companies Offices and any other materials that show you have been rightfully using the name, design or trademark that is part of the domain dispute.
Depending on your circumstances, the outcome of an expert determination can range from canceling or suspending a domain name to having it transferred or amended. To go through with the process, the complainant is to pay a fee of $2000 plus GST. If the fee isn’t paid, the complaint is considered to be withdrawn.
Appealing a DNC decision
If you are unhappy with the expert’s decision, you have the right to appeal. Without adding new evidence, you need to explain your reasons and file the appeal within 10 working days of receiving the decision. The fee for an appeal is $7200 plus GST. An expert panel will then consider your appeal and make a binding decision within 30 working days which will be enforced by the DNC. An expert panel’s decision cannot be appealed further.
The last instance
Even after having gone through the Dispute Resolution Services offered by the DNC, a domain ownership dispute can be submitted to a New Zealand Court in the last instance. In that instance, any decisions made and actions undertaken by the DNC will be suspended.
How to make a successful claim on a domain name
To have a domain ending in .nz, it needs to be registered with a Registrar approved by DNC. The DNC resolution service has received hundreds of complaints since it was launched in 2006. If you have a trademark, your complaint has a much higher chance of success. At the same time, complaints that cannot prove the prior use of a domain name or registration of a trademark are unlikely to succeed. The same goes for trying to claim a generic name like “boats.co.nz”.
Legal advice and/or representation is a good idea if you think the stakes are high enough. Being able to make a complaint in an effective, clear and concise manner, with the appropriate supporting documentation, is the key to a successful claim.
Depending on the domain suffix the website in dispute has, there are different processes in place. For domains ending in .com, you will need to use the global Uniform Domain Name Dispute Resolution Policy. Websites ending in .uk are dealt with by the Nominet Dispute Resolution Service while .au-domains are managed by the AU Domain Administration auDA. For domains registered across Asia, the Asian Domain Name Dispute Resolution Centre is your first point of contact.
Sometimes the domain name in question may be one that seems to represent your business but isn’t a domain that you need be concerned with.
A common phishing scam is to receive an email from an overseas domain provider claiming that someone else wants to register a domain name that includes your business name. These scams are usually offering a .com or .cn (Chinese) domain name at a premium price that you probably don’t need or want. Even if you did want to purchase the domain name, it’s safer to use your regular provider.
Once again, these are usually foreign domain names. The difference is that they include a keyword related to your business. Generally, of little value and potentially detrimental to your business, if they have previously been used for black hat SEO, there’s no advantage in purchasing them.
Domain Name Ownership
A common domain name issue is when you control a domain name but the person that registered it put the wrong details for the ownership, usually, theirs! This blog explains how you can resolve domain name ownership problems.
Knowing who owns your website domain is the first step in pro-actively avoiding future complications for your business. If you have any questions or need help with your general website design, contact the friendly team at Energise Web today.