Cybersquatters learn to beat the system

Loopholes in the Internet domain name dispute-resolution system are helping professional cybersquatters win cases, says an experienced mediator.

The warning is from Australian lawyer John Swinson, who sits on international dispute-resolution tribunals for the World Intellectual Property Organisation.

Variations in legal philosophy and interpretation among individual mediators can lead to inconsistent results where factual matters are in dispute. It appears some adjudicators won't decide in favour of complainants unless they can prove their cases 150 per cent, while others are less conservative in their attitudes.

Helping tilt the scales of justice further is the fact that cybersquatters are prone to telling porkies. "If a cybersquatter is clever at spinning a convincing story that can't be disproved in the time available to the panel, some arbitrators will give him the benefit of the doubt," says Swinson. Thus cybersquatters who learn the idiosyncrasies of the system can come out ahead by manufacturing a legitimate cover story for their activities.

"Among cybersquatters, the smart guys for whom it is a business are surviving . . . they are getting away with things."

Swinson is one of more than 200 individuals -- typically legal specialists with an interest in technology law -- accredited as arbitrators and mediators by WIPO and other businesses that provide dispute-resolution services.

"My view is there are many people out there registering domain names improperly. You can manipulate the system as a cybersquatter. They have seen where the loopholes are and manipulate them."

Swinson cites a case he adjudicated this year involving a Las Vegas resident who had registered the name Necschott.com. The man argued it was only coincidence that he'd acquired the name after German company Schott Glas and Japanese electronics giant NEC concluded a joint venture pact.

However, detective work by Swinson showed that the Las Vegas man was in the habit of registering names of recently completed mergers, acquisitions and joint ventures. The cybersquatter had scored one victory from eight attempts but "you only need one success to make up for the failures and turn a profit", Swinson points out.

In another case, a shopping centre business in the Canadian city of Oshawa found the domain name oshawacentre.com was already registered. The respondent told the tribunal he was operating an AIDS clinic in Africa and claimed "oshawa" meant "semen" in Swahili.

The panel ruled against the respondent, but only after it discovered that oshawa does not mean semen in Swahili and that the respondent's representative lived only 20 kilometres from the Canadian shopping centre.

The case required a time extension, but since remuneration rates are only $1000 per decision, most panellists won't devote extra time to scratching below the surface of the written depositions they receive, says Swinson.

"At the end, judges have two completely different stories from the two sides and they have to make a decision on that. It is all done on paper so there is no chance to conduct a witness stand cross-examination.

"When there are two conflicting stories and it is hard to determine who is lying, a lot of judges will maintain the status quo and deny the complaint. So if a cybersquatter gets one of the judges to take the view it is all too difficult, he wins."

Swinson, 35, who took a double degree in law and computing, spent seven years with a New York law firm and now works in Australia with Mallesons Stephen Jaques.

Overall, the dispute-resolution system is working well but requires fine-tuning to close off loopholes, says Swinson. "But I am concerned that in a number of cases I've seen, cybersquatters are submitting false evidence to show they have a legitimate interest in a domain name."

Disputes aren't dropping in frequency. Cases filed so far this year with WIPO alone are running slightly ahead of last year's 1841 disputes in generic top-level domains such as .com.

WIPO is one of four organisations licensed by the Internet Corporation for Assigned Names and Numbers to mediate cases under Uniform Domain Name Dispute Resolution rules.

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