Out-Law News 2 min. read

Cybersquatters can get rich if they're quick, says .eu registry

Cybersquatters who broke the rules when registering .eu domains can be stripped of them at any time, says .eu registry EURid. But if they manage to sell their domains before being caught, they can keep the proceeds, according to the registry.

Bitter controversy has surrounded the 'sunrise' period of the new domain, launched in April. Several existing domain registrar firms, including GoDaddy, have accused US profiteers of using a lax EURid system to stockpile valuable domain names against its rules.

EURid now says that it will confiscate domains at any time if they are found to have broken the rules. "If we find that someone has provided inaccurate or misleading information in the registration then we will take that domain off them," said EURid spokesman Patrik Linden. "We can do that at any time."

EURid, a Belgian non-profit group contracted to operate .eu by the European Commission, organised a 'sunrise period' before the domain went live to try to ensure that the right people controlled the right domains. Trade mark holders and public bodies and companies were first given the chance to register names they held trademarks or rights in.

After that a queuing system was put in place where each company got one choice then went to the back of the queue before getting another. "This was probably the most complex sunrise period there has ever been," said Linden.

Registrar firm GoDaddy's chief executive Bob Parsons alleged in his blog earlier this year that US firms were creating phantom companies to win many places in the queue for names from EURid and therefore receive more chances to choose domains. Those domains are now for sale.

One respondent to his blog reported seeing a domain he failed to register on sale for €5,000, just weeks after it was created. According to EURid, if that domain holding company sold if for the €5000 it could keep the money, even if it was registered against the rules.

"Our concern is with the holder of the domain," said Linden. "If it passes into new hands then as long as that new person qualifies to hold a .eu domain then it can pass. Our concern is not how much that person paid for it, it is that the passing of the domain has the consent of both parties."

There have been flurries of appeals to the EURid arbitrator, and the latest case involves a domain being taken from a US firm to be given to a UK company. The World Wrestling Federation had registered Kane.eu based on a UK trademark for Kane, giving a London address.

But the Czech Arbitration Court, which will decide all .eu disputes, found that WWF's business was primarily in the US. "It is concluded that the Applicant is an entity based and having its principal business in the United States and not – as required by the general eligibility criteria – an EU based entity," said the ruling.

Linden said that around 20 cases had been settled by the arbitrator, and that 200 more were underway.

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