In yet another case of cybersquatting, courts have recently ruled in favor of Hollywood big hitter Paramount Pictures. The company was handed ownership of the domain name Paramount.co.uk, previously in the possession of an English entrepreneur by the name of Andy Hugh. The case is certainly a major warning to anyone looking to register a domain that closely matches the brand of a major corporation.
Mr. Hugh, based in Great Chesterford, was not paid a single dime for the transaction. The court ruled that his December 2012 registration of the domain name fell under “abusive registration” and so he was not entitled to any sort of compensation.
The legal battle began when a domain broker approached Paramount Pictures on behalf of Mr. Hugh, offering the domain name for the princely sum of £120,000 (roughly $193,000). The broker threatened that if the offer was not taken, he would attempt selling the domain to the highest bidder elsewhere. Paramount promptly rejected the offer and instead contacted their lawyers.
So what is cybersquatting exactly? This opportunistic practice is built around making a quick profit by registering domain names that are precisely matching or closely related to major brands. In this case, the perpetrator was looking to sell the domain name to Paramount for an excessive profit.
Cybersquatting is also used in other ways. For example, if the brand sells physical products, scammers will set up fake online stores from which to sell counterfeit goods. Sometimes the strategies are a little more simplistic, with AdSense or some other forms of online advertisement being added for passive profits.
In fact, this seems to have been the purpose of Paramount.co.uk prior to the offered sale. In the court battle, the studio claimed that the website had been used to provide affiliate links to movie entertainment websites. An example of this would be a Netflix affiliate link, whereby the site owner receives a certain commission for each new signup.
Cybersquatting is not always a clear-cut issue. The question can be slightly trickier and depends on several factors. For example, a brand name such as Coca-Cola is clear and unique. Registering a domain with even the slightest resemblance would be a straightforward case.
Paramount, on the other hand, is in a slightly gray area. Mr. Hugh claimed that it is an ordinary English word, used by various businesses all around the world. On the surface, it makes some sense.
While this defense has held in court in the past, it did not work in this scenario. The close association of paramount with the Hollywood studio (having been in business since 1912) means that it’s no longer classed as a generic word in the eyes of the court.
In addition, the company announced in October 2012 that a Paramount theme park would be opened in Kent in the coming years. The subsequent registration of Paramount.co.uk only a few months later is therefore seen as anything but coincidental.
Cybersquatting cases are becoming more common, with companies scouring the net for individuals looking to profit from using their brand names. They are now also implementing pre-emptive action, looking to register domain names before squatters get a chance to do so. That’s what Microsoft recently did by registering the domain Xbone.com, which corresponds to the consumer nickname for their Xbox One gaming console. Considering the legal fees and hassle involved in cybersquatting cases, it’s no surprise that this is now the go-to strategy.
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