Domain Disputes and Cybersquatting

1st February 2009

It looks like two of our clients may come to blows over a case of cybersquatting which came to our attention last week.

Here’s what transpired (the client’s names and URLs are not given out for obvious reasons):

Director A of client company A Ltd leaves the company under a bit of a cloud.
After a few months, Director A sets up in business again offering similar services to company A Ltd and as such becomes a competitor to them.
iNet Engineers continues to manage the websites and hosting/email accounts of company A Ltd and Director A in his new business (but not their domain names).
In time, the domain name of A Ltd approaches its renewal, however due to an oversight, it expires, goes into redemption and eventually becomes free for registration again.
Director A immediatley re-registers the domain name previously owned by his former company A Ltd, in his own name and tries to sell it back to them at an inflated price.
Company A Ltd decline and ask us for advice. They are not very happy as you can imagine.

Here’s what we said:

In situations like this there’s probably a case of “cybersquatting” to be had by Director A. Cybersquatting is where an individual or organisation knowingly registers the domain of another company or brand owner with the intention of either selling it back to them for a large profit or profitering from its use for their own ends: i.e. they capitalise upon someone elses intellectual property (IP) or brand values without permission.

There have been many cases over the last few years where “cybersquatters” have ended up in court and lost. Two of the most notable cases in recent include the use of Tolkein’s name and that of Robbie Williams.

In the case of our two clients above, we don’t manage either clients’ domains and as such, I felt it was not really our position to take a stand either way; so I suggested that company A Ltd contact Nominet, the controlling body for .co.uk domain names: and take a look at their Dispute Resolution Service (DRS) in an attempt to resolve the situation.

My personal opinion is that Director A is on shaky ground legally and that he could end up creating a load of hassle for himself for very little or no return. Still we’ll see.