Unscrupulous companies or individuals registering the domain names of legitimate companies to make a fast buck have been plaguing the industry for years. However, a recent spate of high-profile cases involving Marks and Spencer, BT, Virgin and author Jeanette Winterson fighting to win back their online identities, has highlighted the growing danger from so-called cyber squatters.

Companies fighting this menace have a number of options open to them, but the most obvious course of action - through the courts - could end up being the most expensive, and dotcoms should consider their options carefully before proceeding. In fact, many internet lawyers are advising that it is probably cheaper to pay the cyber squatter off than go through an expensive legal circus where only the lawyers end up as winners.

George Gardiner, a solicitor with Tarlos Lyon, said that even if the cyber squatters are asking £2000 to £3000 for a domain name, paying up will be cheaper than the legal options.

Eviction notice
Gardiner advised ebusiness managers to explore all avenues before paying up, however. "Fortunately, there are cheaper ways of evicting cyber squatters than the courts," he said. But he warned that these "do not always work".

The simplest method involves an appeal to the World Intellectual Property Organisation (WIPO). "The WIPO dispute resolution procedure was introduced last year as a way of quickly and cheaply evicting obvious cases of cyber squatting," said Gardiner.

Under WIPO rules, domain name holders are legally bound by their domain name contracts to take part in the procedure. Internet Corporation for Assigned Names and Numbers (Icann) mediators have the power to decide if the domain name should be handed over by the cyber squatter to the company, or be allowed to remain in the squatter's possession.

It was this method that was successfully used by Jeanette Winterson, the author of Oranges Are Not the Only Fruit, who found that Mark Hogath was demanding money for the rights to her internet name. "WIPO doesn't cost nearly as much as a legal case and is a lot quicker," said Gardiner.

Icann, and I will
The only weak point is that not all ISPs are signed up to the procedures. Fortunately for Winterson, Hogarth had registered her name with register.com, which abides by Icann rules and was therefore bound by its decisions.

The other cyber squatter victims that have recovered domain names through Icann have included AOL, Carolina Panthers, Buy PC and Alcoholics Anonymous.

Nick Lockett, solicitor for legal practice Sidley and Austin, whose company has been responsible for getting hundreds of domain names back from cyber squatters, said the Icann method was the cheapest and most effective. "The policy can be used as a fast, short, sharp shock to cyber squatters," he said.

Unfortunately, Icann cannot get involved in cases that are too complex, like theoretical cases involving a bookseller called William Harold Smith buying the domain name WH Smith with the intention of setting up an ebusiness.

In these more complex cases the courts are still the only sure-fire way of evicting a cyber squatter - but at a high price.

If you are forced to go to court, the most effective method is by complaining that there has been a breach of your company's trademark. For about £5000, it is possible to get your name back.

As far as the courts are concerned, if a person has a domain name with the sole purpose of selling it on, they will nearly always lose in a trademark dispute, warned Lockett.

Court in the act
The next legal option is to accuse the cyber squatter of trying to use your company name to 'pass themselves off' as your legitimate company. This is very expensive and a lot harder to prove. Generally, Lockett advises negotiating with the cyber squatters to avoid legal action whenever possible.

"It is important to realise that even if you win a court case and get damages, chances are that the person is an impoverished student and can't actually pay you," he said.

A lot of them don't really want to go to court and had registered the name in the hope of getting a small return. Legal negotiations can convince them of the error of their ways and not cost too much.

"Generally, you will only want to take a cyber squatter on in the courts if you want to send a message out to others that if they take your name, you will pursue them," said Lockett. "It tends to put them off."

On a lighter note, Gardiner said that one of the most bizarre incidents of cyber squatting which he had heard of involved a man who registered the names of every major attorney practice in the US with the idea that they would pay up rather than go to court. They didn't, and he lost.