Networker: Cybersquatters

Issue 

Networker: Cybersquatters

You can't stand in a public place these days without seeing some sort of internet advertising. Hardly a poster fails to carry the ".com" footnote, inviting web surfers to an particular site. These ".coms" are the trademarks of the new economy.

Unlike trademarks, however, names on the internet have no recognised intrinsic value. For example, when a newspaper such as the Sydney Morning Herald calculates its assets, the value of the newspaper's name, an intangible, could be tens or hundreds of millions of dollars. By contrast, a company with a popular internet.com name is currently unable to use that name as collateral on a bank loan or for any other economic purpose.

The main reason for this is the structure of internet names, and the manner in which names can be owned. All internet addresses are based on numbers, such as 192.158.3.45. One of the key technologies of the internet is the domain name service, by which these numbers are converted into a recognisable name, perhaps ending in ".com".

When the internet was established, a range of address endings were worked out. For example, ".com" for companies, ".org" for organisations, ".gov" for government and ".au" for Australia.

A range of bodies are responsible for the next addressing level, for example, ".com.au" or ".gov.au" in Australia. While ".com.au" will generally suggest that the company is based in Australia, ".com" gives no hint of the location. The actual structure varies depending on the group, and there has been a major reshuffle in recent years as the United States government has handed responsibility over to private organisations.

Because of the large number of groups involved, there is a range of names, and mechanisms for allocating them. Over the past year, commercial interests have mounted a campaign against "cybersquatting". As they present it, this is the practice of opportunistically registering a popular brand as an internet name, then demanding that the owner of the brand name pay for it.

To date, this has generally resulted in courts ordering the cybersquatter to hand over the name at no cost. This is different to the practice of registering a potentially popular name such as "games.com" and then seeing who is willing to pay to use it.

In practice, the issues are more complex, as illustrated in the dispute between the eToys company and the European etoy group.

So what happens when common words such as "apple" or "star", or acronyms such as "ABC" are used by many companies? The internet guidelines specifically exclude any sort of policing role, so companies revert to the courts. For the ".com" group of names, there is only one set for the whole world, so a legal dispute will quickly become an expensive exercise as competitors have to meet the cost of international litigation.

As well as foreshadowing future disputes over national sovereignty, this re-emphasises the fact that, as it is currently structured, the internet is less than an ideal place for business. The pity is that business won't just leave it alone and let people get on with enjoying and using it: their project is to change and restrict it legally, commercially and technically until everything about it makes money for someone.

By Greg Harris

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