Trademark holders are having to content with increasing numbers of cybersquatters, according to new figures from the  World Intellectual Property Organisation (WIPO) released last week. In related news, Microsoft made further efforts to protect its brand by taking legal actions against several cybersquatters in the UK and the US.

Cybersquatters register domain names that are variations on well-known brands or misspelled versions of them, in an attempt to draw consumers of these brands to their sites. These sites are usually filled with pay-per click advertising, for which the cybersquatter makes money every time the site gets a hit.

According to WIPO, there was a 25 percent increase in cybersquatting disputes in 2006, while Microsoft has reclaimed over 1,000 names in the past six months.

WIPO has warned that domain tasting – where names can be registered for free for a limited 5-day period – and software that can automatically register any expired domains are both enabling speculators to make money from the domain registering process, with potentially damaging consequences for trademark holders.

"Domain names used to be primarily specific identifiers of businesses and other internet users, but many names nowadays are mere commodities for speculative gain,” said WIPO's Francis Gurry, in a statement.

But firms are still unaware of the practice, according to Microsoft's internet lawyer, Jean-Christophe LeToquin. "It is a massive business but our hope is that by going after the main targets abusing our domain, we are not an attractive target," he explained.

Phil Turnbull of domain registrar Hostway, advised firms to ensure their name is defensively registered with all the major domains, and that they keep track of the various expiry dates on these to minimise the potential risks.

"The registration bodies and authorities need to get a better handle on domain tasting and speculators up front," Turnbull added. "We need more ways to tighten up what domains are used for."

Emily Taylor of .uk registry Nominet said the organisation has taken steps to outlaw domain tasting by putting a limit on the number of registrations that can be deleted by registrars.

She added that WIPO's current dispute resolution service – UDRP – hasn't been updated since 1999, "despite significant changes to the Internet market in general and cybersquatting in particular."