The internet, over the course of the last 10 years, has gone from being a novelty tool for technology enthusiasts to being one of the most integral necessities to our daily lives; however, it has also opened up new routes for unethical, abusive and opportunistic behaviour, such as the practice of “cybersquatting” – the malicious registration of and dealing in domain names having third party goodwill rights or interests with a view to extorting a profit therefrom.
The idiosyncrasy of a domain name is that it is absolutely unique- Jackie Scerri
A domain name can be equated to an electronic address on the internet: each device connected to the internet is allocated its own internet protocol address (“IP address”). Websites and webpages also have their own IP address, and this would normally point to the server upon which they are hosted. Version 4 of the Internet Protocol (IPv4) makes use of the IP address in four octets of binary number, represented in decimal form, such as the following: 74.125.224.72, which belongs to Google.
The problem which arises is that it is difficult for humans to remember numbers; therefore the Domain Name System (“DNS”) was created, which is essentially a sophisticated method for mapping an IP address to a string of words and letters that are meaningful to the human being. This string of words and letters is the “domain name” as we know it, which effectively serves as a distinct identity badge for that person or entity registering it.
The first level of domains is the Top–Level Domains (TLDs) which include Generic Top Level Domains (gTLDs) such as the common “.com” and “.net” and Country Code Top Level Domains (ccTLDs) which pertain to the country which issues them such as “.mt” for Malta. The second level domains are those domains which come after the TLD. To illustrate, if one were to register a “.com” gTLD for “abc”, it would read “abc.com” with “abc” being the second level domain.
The idiosyncrasy of a domain name is that it is absolutely unique. If one registers “abc.com”, no other person or entity in the world could ever register “abc.com”. If two (or more) different entities were allowed to keep the same domain name, the said domain name would resolve to two (or more) different IP Addresses, causing the system to become “unstable”, so that the same query made by different people from different computers would resolve to different IP addresses. Such an outcome would clearly undermine and disrupt the function of the internet.
Having stated all of the above, it stands to reason that domains have become a marketing asset of paramount importance due to the fact that they connect one’s trade, services, and/or brands to the global internet community. Domain names can aggregate tremendous value, for example, according to the Guinness Book of Records, business.com is the most expensive domain name sold to date for $7.5 million.
This has also brought about the practice of registering domains which have no connection with the registrant, for the sole purpose of selling them, at a later stage, to companies which have a legitimate connection to that domain, at a much higher price than it was bought for originally. To illustrate, in the landmark case of “British Telecommunications plc. vs One in a Million Limited and Ors” “burgerking.co.uk” was offered to Burger King for a price of £25,000, and “bt.org” was offered to British Telecommunications for £4,700.
The Internet Corporation for Assigned Names and Numbers (ICANN), which coordinates and allocates IP addresses, has implemented its own mandatory dispute resolution policies and procedures with respect to all gTLDs. A domain name dispute or cybersquatting claim which arises in relation to a gTLD will thus be examined under ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP), rather than under national legislation, at least at the first instance. The bodies responsible for the administration of ccTLDs can also adopt their own dispute resolution policies and procedures.
The body responsible for the administration of the Maltese ccTLD, Network Information Centre (NIC), does not, however, employ its own dispute resolution procedure. Therefore a registrant in relation to a “.com.mt” domain is in a position where his only option, in the event of a dispute, would be recourse to the Maltese courts, unless both parties agree to go to arbitration.
Additionally, there is currently no specific provision of Maltese law dealing with cybersquatting or other domain name disputes. The claimant will therefore have to rely on traditional legal norms in order to institute proceedings. This was evidenced in Maltese case of Clamus Limited vs Vella Gera Mark, which clearly stated that there was no specific reference to cybersquatting of any kind under Maltese law. Nonetheless, the court felt that it is still possible to frame a cybersquatting issue as a trademark infringement and/or unfair competition case. It consequently ordered the defendant to cancel the registration of “clamus.com”, and in default to pay a penalty for each day of non-conformance with the decision.
In view of the arguments above, the advantages of alternative dispute policies and procedures, such as those employed by ICANN become quite apparent. In the first place, these policies, in point of fact, create substantive norms which tackle the specific issues raised in domain name disputes. In the second place, such procedures are informal and more efficient than litigation in a court. Litigation should be reserved to complex situations where an examination of the facts alone will need to be accompanied by an analysis of the relevant legislation.
It is also submitted that resolution procedures at a national level will not, in actual fact be the ideal solution for this situation. A supranational harmonised approach to the matter should offer a better resolution policy, leading to more uniformity for an issue with global effects.
For more information about this article, kindly direct your request to info@csbgroup.com
Dr Scerri is an advocate – technology, media and telecommunications at CSB Group and holds the position of associate within Zammit & Associates Advocates’ practice areas of e-commerce, iGaming, technology, media and telecommunications, intellectual property and competition law.