Cybersquatters Use India Courts To Stall Legal Action

Posted April 21st, 2009

A domain name registrar in India is exploiting the rules governing proceedings under ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) to frustrate trademark owners’ efforts to retrieve domain names from cybersquatters.

The UDRP rules require trademark owners who wish to file a complaint under the policy to state that they “will submit, with respect to any challenges to a decision in the administrative proceeding canceling or transferring the domain name, to the jurisdiction of the courts in at least one specified Mutual Jurisdiction.”  The defined term Mutual Jurisdiction means a court jurisdiction that covers either the relevant domain name registrar’s principal office or the domain name registrant’s address as listed in the Whois record at the time the complaint is filed.  Essentially, the UDRP complainant must elect whether it will litigate a judicial challenge to the outcome of the administrative proceeding in its opponent’s home jurisdiction or in the jurisdiction of the registrar, which is usually viewed as “neutral.”

The Mutual Jurisdiction requirement enables cybersquatters to make it harder on trademark owners by selecting a registrar strategically based on location.  Imagine that a cybersquatter outside the U.S. wishes to extort money from a U.S. trademark owner.  If he registers an infringing domain name with a registrar in his own country, it forces the trademark owner to consent in a UDRP complaint to litigate on the cybersquatter’s home field if the cybersquatter challenges the UDRP result.

A particular registrar located in the Lokhandwala Complex in Mumbai has realized that this procedural hurdle for trademark owners can be a selling point for domainers.  The registrar has offered to incorporate straw registrants in India to hold domains for cybersquatters and to file suit on their behalf in India to challenge successful UDRP proceedings.  Lawsuits in an Indian court can extend for ten or more years.  During that time, the cybersquatter retains control of and continues to profit from the disputed domain name.

Anyone facing a cybersquatter outside the U.S., who has registered the domain name in question with a registrar in the foreign country, should consider courses of action other than initiating a UDRP proceeding.  For instance, the Anticybersquatting Consumer Protection Act (ACPA) provides for in rem actions against domain names under certain circumstances.  Although the costs of such an action are likely to exceed those of a UDRP proceeding, a domain name in the hand is worth two in Mumbai.

By Deborah  A. Wilcox (and Brandt W. Gebhardt), Baker & Hostetler LLP

Tags: , , , ,
Posted in Cybersquatting, Enforcement, ICANN, UDRP by