The difference between cybersquatting and domain speculation

ToxicBunny

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No there isn't....

If you aren't going to use the domain for something useful, you're squatting and hoping to make a profit and that makes you scum in my books.
 

ambo

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So someone buys a piece of land and then doesn't build anything on it. Then a few years later a developer pays them lots of money so that he can build a mall there. Are these people also scum?
 

Johnfpro

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Having dealt with them before, ISPA are a law unto themselves. The dispute resolution requires one to put up a healthy deposit (± R 10,000) plus pay any legal costs that minimally run will run into another ±R 15,000.
 

Ant_Brooks

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@Johnfpro -- are you sure you meant ISPA in that last post?

ISPA doesn't really have anything to do with South Africa domain registrations, but just happened to be asked by MyBroadband to comment on the issue of "cyber squatting", which is presumably what triggered this article. The article is perhaps a little misleading in this regard, since it creates the impression that ISPA is somehow involved in the domain name process.

The parties responsible for most domains in South Africa are:
1. ZADNA (http://www.zadna.org.za) -- the regulator for the top-level .ZA domain.
2. UniForum SA (http://co.za) -- the entity that handles .CO.ZA registrations.

Also, while you are spot on that the dispute resolution process (which is also nothing to do with ISPA!) costs R10,000, there is an ADR financial assistance program in place for parties unable to afford that price. There is some more information about this on the ZADNA site here.
 

Ant_Brooks

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No there isn't....If you aren't going to use the domain for something useful, you're squatting and hoping to make a profit and that makes you scum in my books.
You are perfectly entitled to view domain speculation and cyber squatting as morally equivalent -- many people do! But that doesn't change the fact that there is still a significant legal difference between the two.

For most domains (and in South Africa, at least for .CO.ZA domains) there are processes in place to protect the owner of an existing brand/name/trademark from people deliberately registering a similar domain in order to profit. On the other hand, the majority of domains have no rules/policies in place preventing someone from registering generic domains in order to resell them.

To put that another way, if you register mybroadband.web.za and then try to sell it to MyBroadband, expect to get a call from MyBroadband's lawyers. But if you register broadband.web.za and then try to sell it to the highest bidder, about the worst you can expect is to get disapproving stares from people who think that it isn't okay to register domains purely to try to make a profit.
 

The_Unbeliever

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No there isn't....

If you aren't going to use the domain for something useful, you're squatting and hoping to make a profit and that makes you scum in my books.

What he said.

It is easy to think up some possible permutations on domain names for certain firms, register these and hope that said firms will eventually want to make use of those pre-registered domain names.
 

ToxicBunny

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You are perfectly entitled to view domain speculation and cyber squatting as morally equivalent -- many people do! But that doesn't change the fact that there is still a significant legal difference between the two.

For most domains (and in South Africa, at least for .CO.ZA domains) there are processes in place to protect the owner of an existing brand/name/trademark from people deliberately registering a similar domain in order to profit. On the other hand, the majority of domains have no rules/policies in place preventing someone from registering generic domains in order to resell them.

To put that another way, if you register mybroadband.web.za and then try to sell it to MyBroadband, expect to get a call from MyBroadband's lawyers. But if you register broadband.web.za and then try to sell it to the highest bidder, about the worst you can expect is to get disapproving stares from people who think that it isn't okay to register domains purely to try to make a profit.

Oh, I know... but it still pisses on my battery that there are ppl out there who register domain names for profit...

I actually came across this when I tried to launch a company and the domain I needed was already taken by a cybersquatter who wanted R9500 to transfer the domain to me. So he was just below the R10k it would have cost me to get dispute resolution in place...

I changed the name of my business rather than pay the scum money he didn't deserve.
 

Ant_Brooks

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It is easy to think up some possible permutations on domain names for certain firms, register these and hope that said firms will eventually want to make use of those pre-registered domain names.
But that would actually be cyber squatting, and not domain prospecting, since the registrant has the clear intention of selling those domains to a specific firm. The dispute resolution processes for most domains (including .CO.ZA) take a very dim view of that practice.

Cyber squatting = registering ipad4.co.za because you think you'll be able to sell it to Apple.
Domain speculation = registering tablet.co.za because you think you might be able to sell it to an-as-yet-unknown party at some point.
 

ambo

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Cyber squatting = registering ipad4.co.za because you think you'll be able to sell it to Apple.
Domain speculation = registering tablet.co.za because you think you might be able to sell it to an-as-yet-unknown party at some point.
I think that this is the key point people miss. "tablet.co.za" is not a trademark anyone can claim is being infringed. You could have Apple, Samsung, HTC, Johnson & Johnson, GlaxoSmithkline and about a dozen other companies all wanting that domain. No laws have been broken and no trademarks have been violated by a clever speculator registering that domain and making some money by selling it later.

This is really no different from buying a piece of land while the markets are low or buying some shares when a stock is weak. :)
 

Johnfpro

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@Johnfpro -- are you sure you meant ISPA in that last post?

ISPA doesn't really have anything to do with South Africa domain registrations, but just happened to be asked by MyBroadband to comment on the issue of "cyber squatting", which is presumably what triggered this article. The article is perhaps a little misleading in this regard, since it creates the impression that ISPA is somehow involved in the domain name process.

The parties responsible for most domains in South Africa are:
1. ZADNA (http://www.zadna.org.za) -- the regulator for the top-level .ZA domain.
2. UniForum SA (http://co.za) -- the entity that handles .CO.ZA registrations.

Also, while you are spot on that the dispute resolution process (which is also nothing to do with ISPA!) costs R10,000, there is an ADR financial assistance program in place for parties unable to afford that price. There is some more information about this on the ZADNA site here.

You are quite correct; I was actually referring to Uniforum, a very unhelpful bunch.
 

Ant_Brooks

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You are quite correct; I was actually referring to Uniforum, a very unhelpful bunch.
Would you mind going into a little more detail on that? What were UniForum unhelpful with? A disputed domain, or some other aspect of the CO.ZA domain registration process?

Disclosure: I have a level of involvement with ISPA, ZADNA, and (more recently) with UniForum. Hence I am interested to read feedback on public experiences with any of these organisations.

(And if you'd prefer to send me private message with details, rather than posting here, that's fine too.)
 

rvanwyk

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UniForum is a joke. It clearly states in their Terms and Rules that UniForum will not allow registration of a Registered Trademark domain. Yet they keep allowing and when you confront them they tell you to do a Dispute Resolution where they were in the wrong from the beginning. Even when sending them copies of the trade mark documentation. Just out to make money.

EDIT: And they want me to pay somethinl like R20k to get my own registered trademark name back when they were not supposed to have allowed this. I contacted them hours after it was wrongfully allowed.
 
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Ant_Brooks

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UniForum is a joke. It clearly states in their Terms and Rules that UniForum will not allow registration of a Registered Trademark domain. Yet they keep allowing and when you confront them they tell you to do a Dispute Resolution where they were in the wrong from the beginning. Even when sending them copies of the trade mark documentation. Just out to make money.
My understanding of this situation is as follows:
  • The ECT Act provides for an Alternative Dispute Resolution process. This process was developed by the Department of Communications and published in the Government Gazette in November 2006. A copy of these regulations is available from the ZADNA web site.
  • UniForum did not promulgate those regulations. They are not responsible for administering the dispute resolution process, nor do they collect any of the revenues from people lodging disputes using that process. About the only involvement UniForum has with the ADR process is that they are obliged to honor the outcome of an ADR process.
  • UniForum cannot legally run their own dispute resolution process in parallel with the one already provided for in the ECT Act. As much as you might want them to adjudicate your particular trademark claim, they cannot do that.
  • In any case, determining who has the right to a particular trademark is not as simple a matter as it might seem as first glance. Trademarks are granted in multiple categories, so it is quite possible for more than one party to hold a particular trademark. You might have the right to use "The Apple Company" for your fruit and vegetable shop, for instance, but that doesn't mean you can also sell "Apple" computers. This means that there can easily be multiple parties each able to produce trademark registration documents for the word "Apple" and each therefore having a perfectly reasonable claim to APPLE.CO.ZA.
  • The words "trade mark" appear in the CO.ZA terms and conditions only twice. Once in 5.1.4 and once in 5.2. Neither of those clause prohibits anyone from registering a domain that is a trademark. Rather, the first clause is an undertaking that the domain registrant is not infringing the rights of any third party trade mark holder, and the second is some legal waffle that you can't hold UniForum responsible if someone challenges the legitimacy of your registration. Those clauses are definitely not a commitment from UniForum to verify any new domain registrations against the trade mark database. If they were to do that, it would take much, much longer to register each domain and certainly cost a lot more than R50.00.
Given that background, let's look at your specific example, but turn the situation around. Assume that you had registered the domain you wanted first, but some other organisation also had a claim to the same trademark, but in a different category. (Like my "Apple" fruit and veg company example above.) That means that they could provide valid trade mark documentation to UniForum, just as you did. Would you really want UniForum to hand over your domain to that other organisation, simply because they can demonstrate a valid claim to your domain? Probably not. You'd want some due process to be followed to review each party's claim to the trademark, before the domain was reassigned (or not). That due process is exactly what the Alternative Dispute Resolution process is supposed to be.

EDIT: And they want me to pay somethinl like R20k to get my own registered trademark name back when they were not supposed to have allowed this. I contacted them hours after it was wrongfully allowed.
Last time I checked, the cost of the ADR process was R10,000. But that's not determined by UniForum -- as mentioned, they have nothing to do with that process, except being obliged to honor ADR rulings. Whatever issues anyone might have with UniForum, the cost of the ADR process cannot be blamed on UniForum.

Having said all that, I am sympathetic to anyone who has had the misfortune of having someone else register a domain that they have a claim to. And the R10,000 it costs for the ADR process (which doesn't include the costs of hiring a lawyer to represent you in the process) might seem expensive. But that cost should be compared to, say, the cost of challenging someone who starts trading with the same company name as you have registered. The costs of resolving that sort of dispute will be much, much higher than the R10k the ADR process costs. Those sorts of legal fights can quickly run up tabs of hundreds of thousands of rands and more. In comparison, the R10k cost to resolve a domain dispute is relatively low.

And once again, I'd like to point out that the ADR regulations specifically provide for financial assistance for people who can't afford the R10k. It's been a while since I read them, so I'm not sure if a small business could qualify for assistance, but the drafters of the regulation did take into account that some people would not be able to afford R10k and they built in a mechanism to deal with that. If you are still interested in challenging that domain registration, but the R10k is a barrier, I'd encourage you to review the eligibility criteria on ZADNA's web site, and if you think you qualify, apply for financial assistance.
 

Rouxenator

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Based on that, I wonder what Hyundai and Coolermaster will do with those two domains I pointed out.
 
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