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WIPO Cybersquatting Report Ignores Real UDRP Trends

The World Intellectual Property Organization (WIPO) asserted on Monday that new gTLDs from ICANN would unleash a global crime wave. This dire warning was bolstered by an astonishing statistic: a whopping eight per cent (8%) increase in UDRP complaints from 2007 to 2008!

But WIPO’s press release tells only a very little of the truth. Astonishingly, the UDRP system actually works pretty well. Judging by the data, it is not only effective in policing cybersquatting, it also discourages new cybersquatting. In fact, compared with the growth of domain names, cybersquatting allegations have actually decreased every single year since the UDRP was implemented.

Let’s compare WIPO’s claim that the sky is falling with the actual data, helpfully provided by WIPO itself.

WIPO shouts Record Number of Cybersquatting Cases in 2008, and calls the introduction of new gTLDs a “genuine concern for trademark holders.”

WIPO’s press release was picked up by many in the echo chamber, and various reporters and pundits, being deeply steeped in all matters relating to domain names, contributed to the total body of knowledge by opining that maybe ICANN was being a bit hasty with this new gTLD thing.

This predictable naivete from the press is why people bother to issue press releases in the first place, and I can’t fault WIPO for using tools so readily at hand.

But what do WIPO’s own statistics actually show? When examined as a function of registered domains, they show that (alleged) cybersquatting is getting to be LESS of a problem, not more. The rate of growth in UDRP filings consistently lags behind domain name registrations, and as a percentage of names registered, UDRP filings have gone down in every year since ICANN’s inception.

Here’s a little data sheet, a combination of WIPO’s stats compared to gTLD stats (.com, .net, .org, .info, .biz). This data compares all WIPO’s UDRP filings, including ccTLDs (13% of their filings last year), compared to just a subset of gTLDs—.com, .net, .org, .biz. I did it this way simply because the data exists in a easily-retrievable form. An apples-to-apples comparison would show an even greater decline in UDRP cases in relation to domain names registered:

Examining this data, WIPO could have have trumpeted several alternative headlines, with perfect adherence to fact. In fact, comparing UDRP filings to actual domain name data is far more useful than looking at UDRP filings in a vacuum, as the WIPO press release did.

Alternate Headline #1: Cybersquatting Cases Continue Decline

WIPO could have pointed out that as a percentage of total domain names registered, UDRP filings show a constant decrease. Remember, WIPO stats include ccTLD filings, while the domain name totals I’m using are just a subset of gTLDs. So the decrease is in fact much greater than this chart shows:

One two-hundredths of one per cent? One UDRP for every 200,000 domain names registered? This is what is sending WIPO into fear-mongering mode? The quest for perfection has been held as admirable since the Knights of the Round Table and the Imitation of Christ, but aren’t we being a bit picky?

Alternate Headline #2: Cybersquatting Trends Show Constant Decline

Instead of whipping up fear among easily-confused bloggers and journalists, WIPO could have noted that the growth rate of UDRP filings is down compared to the domain names, as they have been in every single year since the UDRP was instituted.

Compared to the rate of growth among the total number of registered gTLDs, cybersquatting cases are in constant decline. Of course UDRP filings go up as the total number of domain names grows, but they don’t grow as fast as the domain names do. A more penetrating look at these numbers would also ask why the UDRP cases are growing. Is because there is more cybersquatting? Or is it because WIPO has been successful with its public relations, thereby increasing filings? Or have complainants just become more litigious?

Alternate Headline #3: WIPO Records Smallest UDRP Increase Since 2004

Even when separated from domain name numbers, UDRP filings are trending downward. The rate of growth in UDRPs has been declining precipitously since 2006, and the 2008 numbers are the lowest since 2004.

Abuse of intellectual property rights is real, and cybersquatting definitely occurs on a regular basis. On the other side, some argue that much abuse has been perpetrated against the fair-use rights of the public by trademark holders who litigate to prevent common use of everyday speech. Wherever the abuse occurs, those affected should have mechanisms to protect themselves. The UDRP is one such mechanism, and it has worked well despite gaming on both sides.

As we try to promote the expansion of the Internet, it would help if institutions with respected names, such as WIPO, would not twist statistics to score rhetorical points. Susceptible bloggers will just regurgitate it.

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WIPO Looking Through the Wrong End of the Telescope John Berard  –  Mar 19, 2009 2:58 PM

I second Antony’s motion.  WIPO may think it has unearthed an immutable nugget, but even a cursory review of their report reveals less insight than attempted oversight. 

ICANN is right to open up these new territories.

More to the story? Ken Ryan  –  Mar 19, 2009 4:43 PM

This is an interesting analysis, but does it also twist the statistics?

Domaining, the registration of large numbers of domain names that do not identify a product, company or trademark of the owner, has increased in recent years.  A (relatively) few people have registered a (relatively) large number of names. By large I mean thousands, tens of thousands or hundreds of thousands of names. 

If you only look at the relationship between name registration growth vs. disputes, the statistics will be skewed by domainers with large holdings who don’t have the desire or ability to register disputes.  If I remember my Kesmodel, domainers often hand over disputed names, thereby avoiding UDRP.

Can anyone help out with relevant figures for domainer registration numbers and growth rates?

New TLDs are harmless compared to .com/.net/.org Dirk Krischenowski  –  Mar 19, 2009 7:21 PM

I appreciate Antony’s analysis. What the WIPO report does not report is that the burden of cybersquatting can only decreased if there are effective mechanisms to turn down cybersquatting in the .com/.net/.org name space which account for over 93% (!) of all the cases. The new TLD from the 2000 and 2004 round are relatively harmless compared to the cybersquatters favorite gambling place, the .com TLD.

No one really believes that there is a the change that new TLDs will become as attractive as .com/.net/.org. So WIPO please do not ask for effective notive and takedown procedures before the homework in the existing burden is going to be solved.

Market Shift John Berryhill  –  Mar 20, 2009 4:42 PM

The number of cases decreased in 2008 at the other primary UDRP provider - the National Arbitration Forum.  Hence, this is more of a market shift in UDRP providers than an increase in UDRP cases.  It’s interesting that the report assumes that WIPO’s caseload is the entire UDRP caseload, when they only handle a bit more than half of UDRP cases.

WIPO also fails to note a record number of cases in 2008 in which the complainant was noted to have abused the process.

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