A record number of cybersquatting complaints were filed last year, a trend which is expected to skyrocket in 2010 when a far wider selection of domain names becomes available.
Next year, the Internet Corporation for Assigned Names and Numbers (Icann), the body that oversees the web addressing system, is to allow domain names to contain any number of possible suffixes, instead of the 18 currently allowed, including .com, .org, or .net.
The decision, which means any number of domains could be created with seemingly infinite suffixes, such as .london or .shopping, has companies scrambling to protect their brand names against cybersquatters.
A study released last month by the World Intellectual Property Organization (Wipo) found that 2008 was a record year for cybersquatting complaints.
More than 2,300 instances were recorded by trademark holders alleging that their brand names had been illegally infringed by web users purchasing false domain names in hopes of finding a quick settlement or driving traffic to their websites.
Wipo handled complaints from brands such as BMW, the BBC, eBay and Coca-Cola last year, companies that might be forced to dedicate larger budget commitments under Icann's new rules.
In the study, one third of all cases were settled without a panel decision. Of the remainder, 85% of the panel decisions favoured the complainant, while 15% of the complaints were denied, leaving the names in the possession of the registration holder.
The number of complaints is an 8% increase from 2007, but Wipo warns that 2010 will represent "a watershed moment in the development of domain name systems, and is of genuine concern for trademark holders".
Icann plans to charge anywhere between $100,000-$500,000 per domain, with a $60,000 annual fee.
Francis Curry, Wipo director-general, said: "The creation of an unknowable and potentially vast number of new [domains] raises significant issues for rights holders, as well as internet users generally.
"Cybersquatting remains a serious issue for trademark holders. Supported especially by registrar and registry stakeholders, the sale and broad expansion of new top-level domains in the open market, if not properly managed, will provide abundant opportunities to seize old ground in new domains."
However, Icann insists the new domains will offer an unprecedented marketing opportunity for brands and companies.
Paul Levins, Icann's vice-president of corporate affairs, said: "Whatever is open to the imagination can be applied for. It could translate into one of the largest marketing and branding opportunities in history."
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