Domainmonster.com Industry News

News > March 2007

16-Mar-2007

Domain Tasters a Headache for WIPO

The World Intellectual Property Organisation (WIPO), who oversee many domain name disputes, argue that the fairness of the domain name system (DNS) is being undermined by the practice of "domain tasting", which turns domain names into commodities for speculative gain. Last year WIPO saw a 25% increase in Domain Name disputes over the previous year, in which trademark owners fought those who had registered domain names which they claimed they were entitled to.

Domain tasting involves the registration of domains and the cancellation of the Domain Registration within 5 days; registrants of .com, .net, .org, .biz and various other TLD addresses names pay nothing if they cancel within 5 days of the original registration. This grace period was introduced to allow people to correct spelling errors, but in practice it gives potential domain buyers the opportunity to test the type-in traffic to a particular address before buying it. Some dealers even wrote software to perform the whole process, including purchase, testing and cancellation, automatically.

When conducted on a large scale, the profits made can be significant. A small fee deducted from refunds has been suggested to control the practice. An offshoot of domain tasting is "domain kiting", in which the user cancels and re-registers a domain name just before the end of the five day period of grace, so that long-term ownership of a name can be maintained without incurring any cost.

WIPO argues that bulk automated purchase of domains, without adequate background checks to avoid appropriating registered trademarks, could represent "wilful blindness" and qualify as an act of bad faith on the part of the purchaser. A WIPO panel said that "This is an example of how the application of the UDRP decision criteria must accommodate changing circumstances and new developments."