Cybersquatters snap up names in web domain race

Domain names with accents are now allowed in Switzerland swissinfo.ch

Many Swiss companies, including Nestlé, have been pipped to the post by "cybersquatters" in the rush to register new internet domain names with accents.

A first complaint has been filed with the World Intellectual Property Organization (Wipo) which deals with name disputes in Switzerland.

Corporations such as Nestlé, which want to defend their trademark rights, have warned these cybersquatters that they could be facing legal action.

Wipo confirmed that a first grievance was filed, but refused to name the plaintiff.

Internet site names with accents, like the German “Umlaut” or double dot over vowels, became legal last week.

Switch, the non-profit organisation which registers the “.ch” domain names in Switzerland, says it was deluged with requests for the new addresses, which it handed out on a first come, first served basis.

The foundation distributed 18,000 names in one week, including 14,000 during the first 24 hours.

Fair chance

Demand was so high that buyers were often unable to get through to the foundation to put in their bids.

Switch admits that there was fierce competition from the start, but says it was an open race.

“Everybody had the same chance of registering a name,” Switch spokesman Marco D’Alessandro told swissinfo.

But some companies and organisations with well-known trademarks are angry that they were beaten by cybersquatters.

Victims

Swiss-based Nestlé, which owns more than 3,000 web addresses around the world, was one of the more high-profile victims. Stephan Maag, a student at Zurich’s Federal Institute of Technology landed the “nestlé.ch” domain for just SFr75 ($59).

Maag says he was not targeting the multinational, but merely wanted to get his hands on a high-profile domain.

He admits now that it may have been a mistake.

Nestlé, which says Switch’s allocation procedure is flawed, is threatening the student with legal action if he refuses to hand over the domain name.

A company spokesman told swissinfo that Nestlé would not resort to a conciliation procedure proposed by Wipo.

Financial gain

Nor is the multinational prepared to offer any financial compensation.

Financial gain has often been the motivation behind domain name registration in the past, with cybersquatters holding famous names to ransom.

Some companies have already paid individuals to recover some of the new “.ch” names.

But experts say it is becoming increasingly difficult to take over a name related to a copyright or a trademark.

Quick money

“Somebody who registers a name must, if challenged, show that they have a good reason to hold on to it,” said Francis Gurry, a deputy director of Geneva-based Wipo.

“You can’t just sit on it to earn some quick money.”

Switch says it does not verify whether someone is entitled to an address. But it advises new address-holders to make sure they are not violating a third-party’s rights.

Gurry explains that a Swiss organisation can take its grievance to Wipo, which offers a standard conciliation procedure. If no agreement is reached, a formal ruling can be requested.

“The internet’s growth has been fuelled by the simple rules that allow somebody to set up a website,” Gurry told swissinfo.

“If we were to introduce rules like those on trademarks and copyright, it would slow down the whole process and push up the costs involved.”

Gurry says that changing the registration process for new domain names would be counterproductive.

“It would be bad for business since it would be hard to launch a new product or service on the internet quickly.”

swissinfo, Scott Capper

Key facts

Switch sold off 14,000 domain names in 24 hours, and 18,000 in just one week.
Each web address costs SFr75 for the first year.
The new names have brought over SFr1.3 million into the foundation’s coffers.

In brief

Swiss web addresses can now have accents, a change that was officially introduced last week.

Multinationals, newspapers and radio stations are just a few of the companies that missed out on registering their proper name as a web address after being beaten by other individuals.

Nestlé, which is one of them and already owns around 3,000 domain names around the world, is threatening the new owner of “nestlé.ch” with legal action if he doesn’t give up the rights.

The Geneva-based World Intellectual Property Organisation can act as mediator in a dispute over name ownership, but a court could still have the final say.