Bank held to £95,000 ransom by cybersquatter wins battle for website

Chinese buyer had ‘no obvious justification’ for taking domain name that Clydesdale Bank wanted

A BANK has won a legal battle against a China-based “cybersquatter” who attempted to extort almost £100,000 from the business by buying a domain name it wanted.

Clydesdale Bank, which is based in Glasgow, was dismayed to find that a web address it wanted had been snapped up by Eric Cheng, who bought the domain cybfx.co.uk after he spotted the bank had recently trademarked the name “cybfx”. Mr Cheng had the intention of selling it back for a much higher fee and used the page to drive traffic to other financial services websites.

Clydesdale took legal action after several attempts to retrieve the domain resulted in Mr Cheng demanding £95,000 for its transfer. The UK’S domain name registry, Nominet, which oversees all . co.uk domain names, ruled that there was “no obvious justification” for Mr Cheng’s purchase, and ordered the domain to be transferred to Clydesdale.

Although it is not illegal to register a domain name that does not already have an owner, the regulator hears hundreds of “abusive registration” cases each year, in which cybersquatters buy domains without intending to use them. Where a domain is deemed to have been bought in bad faith, Nominet has the authority to order its transfer.

In documents submitted to the hearing, Clydesdale said: “The registration of the domain name was a deliberate attempt on the part of the respondent to seek private gain from the business by precluding the company from owning the domain unless we were willing to pay an extortionate sum of money.”

It said Mr Cheng had “seemingly no affiliation to the CYB (Clydesdale and Yorkshire Bank) group of companies” and added that the domain name was “registered with the primary purpose of selling or renting it specifically to the complainant (or a competitor) for more than the respondent paid for it”.

Mr Cheng, whose listed address is in Beijing, did not submit any response to the hearing.

A record 3,074 cybersquatting dis- putes were handled last year by the World Intellectual Property Organisation (WIPO). The top 10 filing parties in 2017 included tobacco company Philip Morris, Michelin, Virgin Enterprises and Lego.

Cybersquatters typically buy domains when they spot new trademarks being registered, or when companies accidentally lose their ownership of domains by lapsing in subscription payments. As well as selling domain names back to legitimate owners, cybersquatters can use bogus sites to trick consumers into buying counterfeit products, or to steal information from visitors.

Francis Gurry, WIPO’S director general, said: “Cybersquatting undermines legitimate commerce and harms consumers. This is true especially where squatters use domain names to offer counterfeit goods or for phishing.”