Companies letting their domain names expire are often finding e-shops are re-registering their domain names and using them to market trademark infringing, or counterfeit, goods. But there’s no correlation between the use of the domain name prior to the e-shop and what the e-shop sells.

The study by the European Union Intellectual Property Office (EUIPO) [pdf], through the European Observatory on Infringements of Intellectual Property Rights, was on online business models used to infringe intellectual property rights. The study found when domain names were available for re-registration the entities operating the e-shops would systematically re-register the domain names and shortly after set up e-shops marketing goods suspected of infringing upon the trademarks of others. It was a characteristic that the prior use of the domain names was completely unrelated to the goods being marketed on the suspected e-shops. There were examples of domain names previously used by politicians, foreign embassies, commercial businesses and many other domain name registrants.

The study was conducted in 2 phases. Phase one looked at .dk (Denmark) from October 2014 to October 2015. During this period 566 .dk domains were re-registered by suspected infringers of trademarks immediately after the domain names had been given up by their previous registrants and became available for re-registration. Phase 2 looked at Sweden, which as a Scandinavian country would be assumed comparable with Denmark, Germany and the United Kingdom, which have very well-developed and large e-commerce sectors, and a country with a large e-commerce sector in southern Europe, Spain.

Phase 2 found the same phenomenon previously documented in Denmark also occurs in the Swedish, German, British and Spanish ccTLDs.

According to the study, the “total number of detected e-shops suspected of infringing the trade marks of others using a domain name under the ccTLD” ranged from 2.9% in .de (Germany) to 9.5% in .se (Sweden) while the “total number of detected e-shops suspected of infringing the trade marks of others using a domain name under the ccTLD where the domain name had been previously used by another registrant” ranged from 71.1 % of suspected e-shops in .uk (United Kingdom) to 81.0% in .es (Spain). The average was 5.41% across all ccTLDs in the study and 75.35% respectively.

Based on the research, the researchers believe it must be considered likely that the same also occurs in other European countries with well-developed e-commerce sectors.

An analysis of the 27,970 e-shops in the study identified a number of patterns including shoes were the product category most affected, accounting for two-thirds (67.5%) of the suspected e-shops and then clothes, accounting for 20.6%, while 94.6% of the detected suspected e-shops used the same specific e-commerce software.

Additionally, 40.78 % of the detected suspected e-shops in Sweden and the United Kingdom were registered through the same registrar, 21.3 % of all the e-shops used the same name server and a quarter (25.9%) of the suspected e-shops had the hosting provider located in Turkey, 19.3 % in the Netherlands and 18.3 % in the United States.

Even if the domain name was previously used for the marketing of goods, the study found the current e-shops were marketing a different type of product at the time of analysis. The study examined 40 case studies that indicated the sole reason for re-registration of the domain names is to benefit from the popularity of the website that was previously identified by the domain name. The benefits would include search engine indexing, published reviews of services and/or products and links from other websites that have not yet taken the current use into consideration. The case studies used also indicate a high degree of affiliation between the e-shops is likely. The research seems to indicate that what on the surface seems like thousands of unrelated e-shops are likely to be one or a few businesses marketing trade mark infringing goods to European consumers.

The 140 page study is available for download from:
https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/reports/Research_on_Online_Business_Models_Infringing_IP_Rights.pdf