Net ruling 'to cause website name chaos'

Published on Saturday 23 August 2008 14:01

IT and legal experts have predicted chaos on the internet following a global ruling adversely affecting the selling power of many of the high street's largest brand names.

It follows a surprise decision by the body that controls the net to sanction a free-for-all online auctioning of disputed internet domain addresses.

In a landmark ruling, the California-based International Corporation for Assigned Names and Numbers (ICANN) decided last week that auctions will be staged whenever two organisations compete for the right to use a website name.

ICANN's decision looks certain to cost blue-chip firms millions to sort out.

One senior tech source condemned the move as a "nightmare" for brand owners.

Andrew Watson, managing director of Quorum, an Edinburgh-based network resources firm, said: "It raises a whole host of issues around brands and trademarks and if a company can actually legitimately own a name."

Following the ICANN ruling, once a brand name or derivation of that name is registered, the brand owner will need to act fast to be the first to claim that name for website addresses. Many will feel compelled to spend an inordinate amount of time and money buying their brand's name on each of the new generic top-level domains expected to appear.

This has already happened. Massachusetts-based Sedo (Search Engine for Domain Offers) has cornered the market in selling domain names and controls the world's largest database of names for sale with more than two million listings.

Sedo brings buyers and sellers together through a searchable internet marketplace and conducts negotiations anonymously using an offer and counter-offer system.

Earlier this year the generic pizza.com went for $2.6m. Now it appears to be open season, with numerous listings of every conceivable version of top brand names.

Watson claimed the 1990s practice of cybersquatting may have returned with a vengeance and be even harder to police this time around.

"Can you imagine the litigation if, say, Apple had to fight to get the domain name apple.shop, apple.computers, apple.international or apple.phones? The door now seems wide open."

John Mackenzie, a partner with law firm Pinsent Masons, said: "This move has the potential for utter chaos, attracting domainers and cybersquatters alike. All of a sudden every brand will be forced to register their name at .shop, .buy and .london etc to stop anyone else getting it."

Here, the world of commercial confidentiality appears likely to kick in. A succession of calls to Apple's head office in California to gain comment on the issue resulted in no reply.

Dr Paul Twomey, ICANN's president and CEO, is unrepentant, claiming it was possible to implement many new names on the internet, "paving the way for an expansion of domain name choice and opportunity".

"The potential here is huge. It represents a whole new way for people to express themselves on the net. It's a massive increase in the 'real estate' of the internet."