New gTLDs Present Increased Cybersquatting Risk

This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.

We are all familiar with the “.com” and “.net” top-level domains (“TLDs”), but new TLDs will soon be launched, dramatically expanding from the current 21 TLDs to around 1,400. This expansion will include new generic TLDs (“gTLDs”) (e.g. .app, .blog and .book) and introduce for the first time brand specific-terms (e.g. .bmw and .apple). This expansion creates opportunities for online brand development, but it also presents challenges for brand owners since it provides an increased opportunity for “cybersquatting”. Cybersquatting occurs when a squatter (a person with no legitimate business interest in the mark) registers a domain name containing a trademark, to either sell the registration to the trademark owner (at a grossly inflated price) or initiate expensive and time-consuming proceedings to de-register those registrations.

Brand owners can pre-emptively avoid cybersquatters by registering any domains which incorporate their trademarks. In the event that a cybersquatter does register a domain incorporating your brand, the first step is often to send a cease and desist letter to the squatter explaining the steps you require them to take to stop the infringing activity, and threatening further legal action if they do not comply.

If the letter is ineffective, the usual next step is to engage the dispute resolution process (although court proceedings are also available). The Canadian Internet Registration Authority (“CIRA”), which controls .ca, has adopted the CIRA Domain Name Dispute Resolution Policy (“CDRP”) to provide a relatively inexpensive and quick option to address bad faith registrations of domain names. Remedies include cancellation or transfer of a domain name. Under the CDRP a successful applicant must prove, on a balance of probabilities, that:

  • the domain name is confusingly similar to the applicant’s trademark;
  • the domain name was registered in bad faith; and
  • the domain name owner had no legitimate interest in the domain name.

ICANN, which controls .com, .org., .net, and other domain names, has a similar policy which is also available to trademark owners.

The CDRP is one more reason why it is important to ensure your trademarks are registered. While the CDRP is available to owners of unregistered or “common law” trademarks, it is much more difficult to prove the existence of common law rights, adding to the cost of the proceedings and the risk that you will not be successful in stopping a cybersquatter.

If you have a problem with a cybersquatter, it is important to take action quickly to prevent the cybersquatter from developing a “legitimate interest” in the domain.