28 April 2005
Johannesburg — PRESSURE from international companies that have fallen prey to cybersquatters in SA is prompting the creation of a quick and cheap internet arbitration process.
A surprising number of companies are victims of cybersquatters, who register a domain name in the hope of selling it for a fat profit when a company finally realises the potential of an internet address to boost its business.
Now new rules have been drawn up by the communications department to let people challenge the ownership of a web address in the .za domain space. Legal experts from Bowman Gilfillan helped with the draft, based on their experience of successfully prosecuting cybersquatters in India and the US who held the names sanlam.com and nandos.com for ransoms.
The department has been stung into action partly because of its well-publicised battle for the southafrica.com. name. The department has long been itching to own that address but, despite protracted international court proceedings, the website still belongs to Paley Media of Seattle.
Bowman Gilfillan director Neil Dundas has no sympathy with the department in that battle, and says the new rules will only help complainants who can show a genuine claim to a disputed name. "With southafrica.com the registration was not carried out in bad faith.
"It was registered legitimately by a US company that uses it for a business and tourism service. The government wanted to expropriate them from that name."
Decisions over who has the right to own a domain name will take into consideration the trademark laws and the motives of the person who registered the disputed name or words. The most complex cases will be those where there is no malice, but a genuine conflict over who has the strongest claim.
While most cybersquatting takes place in the .com domain, violations of country-specific addresses are becoming common. Cybersquatters have realised that people looking for something on the internet will look under a local address first.
That has prompted many countries to set up local dispute resolution measures, and SA is belatedly following suit.
"We already have 180000 registrations under the co.za domain and there's a heck of a lot of hijacking," Dundas says. "There's a much greater prevalence than people want to admit, and it's not usually for money. Disgruntled former employees hijack their former employer's name, or disgruntled business partners try to disrupt their former partner's business."
Often one company will register the name of its rivals to prevent them from establishing an easy-to-find website, Dundas says.
So far there have been at least 15 high court cases in SA to settle such disputes, and almost every large company has been affected. That can easily happen if a company has numerous subsidiaries or product names to keep track of.
Often the issues are settled out of court, if the threat of legal action persuades a person to relinquish the domain name, or if a ransom is paid.
International companies are also being targeted by South African cybersquatters.
"A lot of incidents relate to well-known companies because they haven't secured their trademarks in SA and opportunists are starting to pick them off," says Dundas.
"Once these conglomerates want to establish themselves here they realise their names are not available."
Several multinationals have put pressure on government to prevent that from happening, which has galvanised the communications department into drafting the new rules. The overall aim is to provide a quick and cheap way for people to protect their rights to a trademark or to any other name they believe they have the right to own.
The regulations cover both abusive and offensive domain names. Abusive names are those that take advantage of a complainant's rights to use a name. Offensive names are those that advocate racial, ethnic or religious hatred or carry an incitement to cause harm.
The arbitration will be handled by existing bodies experienced in dispute resolution, such as the South African Institute of Intellectual Property Law. The adjudicators can order the transfer of ownership to the complainant, or order the deletion of a name they judge to be offensive. The decision will apply no matter where a squatter is based.
The draft rules propose a fee of R10000, to cover the costs and to contribute to a fund to support claims where an aggrieved party cannot afford the fee. "That's not expensive if you compare it with the alternative processes like a high court case," says Dundas.
The regulations have been posted for public comment on bowman.co.za.
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