For nearly a decade, the issue of cybersquatting has been at the center of Internet governance debates among policy and business communities. Cybersquatting has cemented itself in the lexicon; has garnered international attention, and has been the subject of legislation in the United States. Unfortunately, cybersquatters are nimble enough to stay one step ahead, and they continue to find new avenues for domain name abuse.

Recently, cybersquatting opportunists have employed two tactics called domain name tasting and domain name kiting as new means to the same abusive ends. These practices are deliberate exploitations of the Internet Corporation for Assigned Names and Numbers (ICANN) 5-Day Add Grace Period (AGP). The AGP provision was intended to protect registrars from instances in which a registrant mistakenly registered a name he or she did not wish to keep or pay for, or when credit card transaction processors refused payment following notification of a lost or stolen credit card (a credit card charge-back).

An unintended consequence of the AGP is that it affords cybersquatters the means to “taste” domain names by registering millions of names and examining the popularity of each within the 5-day window. This test period allows cybersquatters to pay only for the names that provide a satisfactory return on investment and return those that do not, free of charge. The AGP is also used to “kite” domain names—essentially keeping a name for no cost by perpetually registering, dropping and re-registering it.

Since brand-rooted domains attract Internet traffic, the majority of domain names kept by cybersquatters are then used to post pay-per-click (PPC) advertisement links in order to easily monetize visitor traffic. Internet users that visit these sites find posted lists of “sponsored links” to sites that may be relevant to the industries of the infringed brands, and in most cases correspond exactly to the brand being infringed in the domain name. When users click the links, those brand owners are charged click fees by search engines that share the proceeds with the domain name registrants.

These fees add up. When used in conjunction with cybersquatted domains, PPC sites are among the worst kinds of infringement on the Internet today because they divert traffic likely intended for a brand owner’s site and often monetize this traffic at the direct expense of the brand owner and consumer experience. Consequently, tasting and kiting have proven extremely costly and disruptive to brand owners. However, they have garnered relatively little attention in the national media and until recently, had not been formally addressed by the United States Congress, the Department of Commerce, or ICANN.

Today, approximately 30-32 million domain names are actively involved in AGP schemes or have been registered after being identified using this tactic. Approximately 2 million additional new names are being tasted every day. The volume of names, the rapid turnover inherent in these practices and the lack of sufficient preventative legislation, make it nearly impossible for trademark owners to adequately police infringements and protect their customers and themselves. This, in turn, compromises the security and value of doing business on the Internet.