Philippines Cybersquatting Law Draws Flak

A Senate bill against cybersquatting has drawn fire from cause-oriented groups who say the draft legislation is ill-considered and too broad. This criticism came after Senator Vicente C. Sotto III filed Senate Bill No. 2083, also known as the "Anti-Cybersquatting Act of 2000," which seeks to prevent fraudulent acquisition of a domain name over the Internet.

The bill defines "cybersquatting" as an act of acquiring a domain name ahead of its legitimate owner to gain exclusive right over its use or sale to top bidders. "It is clear that there is bad faith and intent to profit out of this act," Sotto noted.

He added that cybersquatting is also being done either to prevent a business competitor from using its trademark on the Internet or to use it to present negative content that can destroy a company or a person's reputation.

SBN 2083 makes it illegal for any person or entity to acquire a domain name if there is "bad faith, intent to profit, mislead, destroy reputation and deprive others from registering".

Violators will be penalized by imprisonment for a minimum of six months to a maximum of 10 years, or be fined not less than 2 million pesos (US$44,300) or more than 50 million pesos, or both, depending on the court's decision.

Sotto said that in most cases, cybersquatters sell the domain name to the real owner at a very high price.

"Just recently I have been offered by a cybersquatter to pay for a domain address under my name, ',' in the amount of $50,000," the solon said. "This is more than five figures over the price if acquired straight from a domain name registrar."

The bill, which is pending at the committee level, also allows a court to forfeit or cancel the domain name or to transfer it to the legitimate owner in cases of disputes or complaints. "It is unfortunate that we do not have enough laws to cover these kinds of illegal activities online. But with the e-commerce law in place, we have to provide legal safeguards for individuals and companies so they can do business over the Internet," Sotto said.


Senator Sotto's explanatory note to SB2083, however, drew fire after he used the celebrated trademark dispute between the Philippine Long Distance Telephone Co. (PLDT) and Gerardo Kaimo, the owner of, as an example of cybersquatting.

Kaimo, who uses to host a satirical Web site critical of PLDT and various political figures, disputed this characterization.

In a letter to Sotto, Kaimo's lawyers, Teodoro B. Cruz Jr. and Perpetuo T. Lucero Jr., took exception to the Senator's reference to the case as an instance of cybersquatting.

Cruz and Lucero pointed out that Kaimo has not attempted to reap any financial benefit from his ownership of the domain name, nor has he attempted to sell his domain name to PLDT. They added that Kaimo is not in the business of selling telephone services. "He is, therefore, neither a business competitor of the nation's largest telephone company, nor a cybersquatter seeking to profit from selling to anyone," the lawyers said.

Kaimo's lawyers added that:

- PLDT has admitted in court that it doesn't even own the trademark for PLDT, and that its application for the trademark is still pending with the Intellectual Property Office.

- PLDT owned its own domain name -- -- 28 months before Kaimo registered as his own domain name, so it cannot be argued that he is preventing PLDT from "using its trademark to market in cyberspace".

- Criticism of PLDT's poor service on the Web site is based on actual and legitimate consumer complaints, and is an exercise of free speech as protected by the Constitution.

In e-mailed comments to Computerworld Philippines, Kaimo said more was at stake than his own dispute with PLDT. " may have been mentioned," Kaimo said. "However, it should be made clear to the local Internet community, at least, that this is not a Kaimo vs. Sotto tiff. Neither is this an exclusive PLDTI (Philippine League for Democratic Telecommunications, Inc.) vs. Sotto matter. My Web site was merely an example of what Sotto thinks is unfair, i.e., a 'cause-oriented group' complaining about really bad service."

Kaimo added that the Sotto bill exposes to public scrutiny "the low level of Internet awareness in the government."

"I strongly advise people not to decide that this 'wild bill' is none of their business, and again wait for someone else to take up cudgels for them, especially if they intend to make the Internet a part of their business," Kaimo said.

The other respondent in the PLDT trademark case, the PLDTI reiterated Kaimo's points and maintained that it is not affected by the new legislation. "The league did not create nor does it maintain the site, so the league should not be affected," said PLDTI president Manny Amador.

Amador also attacked what he described as an overly broad definition of cybersquatting. "The fact that the bill's definition of cybersquatting includes use of a domain name to criticize another party, means that the bill, if passed, will violate constitutional rights to free speech. Current laws already prohibit libel, but Senator Sotto's bill goes farther than that and punishes even what has traditionally been considered 'fair use' of a trademark."

Amador said criminalizing cybersquatting will also put Filipinos at a disadvantage since the practice is not a crime in most other countries. Thus, foreign companies can cause Filipinos to go to jail and suffer other criminal punishments for cybersquatting, while Filipinos cannot do the same to foreigners who engage in the same practice.

"The draft text of the law seems to have been the product of a hasty, knee-jerk reaction," Amador said. "There are many factual errors that show a lack of understanding the concept of cybersquatting, of how the Internet works, and the bill's implications on constitutional rights."

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