International trademark squatting has boomed in the past 10 years. More brand owners than ever are seeking to do business in foreign countries, only to find that their trademarks have been registered by unscrupulous individuals who are willing to release the marks only if they are paid the right price.
The increase in such trademark extortion is an unintended consequence of globalization and the Internet. As more companies are doing business overseas, requiring more trademark registrations in foreign countries, the opportunity for trademark squatting has jumped. And squatters are finding it easier to take advantage of those opportunities thanks to the Internet, which enables the wrongdoers to quickly find likely trademarks to hijack.
"The Internet allows [squatters] to search databases of trademark applications, see what applications are being filed and check if there is a concurrent domestic application in whatever country that [squatter] is in," says Robert L. Lee, a partner in Alston & Bird. "Not so long ago, WIPO [the World Intellectual Property Organization] didn't have search capabilities that allowed people to see which companies are filing what trademark applications where. Now, people can do that and see what marks companies think are valuable."