Lukáš Novák noticed an interesting thing while studying for an international relations degree last spring: Even though the domain names for all European Union presidency Web sites follow the same format, the domain name for the site of the Czech Republic's future presidency, in 2009, was not registered.

So the 25-year-old Web designer registered for the domain name to the Web site, www.eu2009.cz, for 1,600 Kč ($67).

The government now has a problem: It needs that site, but the site belongs to someone else.

"I wanted to see how the state would react to the fact that I have registered the domain," Novák says.

Foreign Affairs Ministry Spokesman Vít Kolář calls Novák a profiteer who purchased the domain name for "purely speculative" reasons. The ministry says it plans to get control of the domain name, but is not detailing just how — legal action, paying Novák off — it will go about it.

Domain name speculation, or cybersquatting, is the act of purchasing an Internet domain in the hopes that it can later be sold at a higher price. Last month, a man named Gary Kremen sold the rights to a domain name he had previously registered, sex.com, to a company in Boston for a reported $14 million (333 million Kč).

The practice is generally looked down upon, since most examples involve people who try to beat out businesses in registering a domain name not because they have a legitimate use for the site name, but for financial gain.

When Toyota Motor Corporation and PSA Peugeot Citroen announced in 2001 their intention to build a new car factory in the Czech Republic, a cybersquatter read the news and within two days registered www.tpca.cz, the domain name the venture would have most likely chosen to use.

The case is currently in court, and the company's Czech operation is now using another site.

"We are not going to pay for the domain out of principle," Matěj Matolín, the company's spokesman, says.

In another example, Vodafone had to do business with a cybersquatter who bought the domain name www.vodafone.cz. Vodafone spokesman Jakub Hrabovský says the company settled out of court, but would not say for how much.

More squatting

The Information Technology Ministry, and lawyers who deal with cybersquatting cases, say that the problem is increasing nationwide.

"Judging from our legal practice, domain name disputes are more and more frequent in the Czech Republic," says Karel Čermák, Jr., a patent attorney with Čermák, Hořejš, Myslil who has written about cybersquatting.

Still, it is difficult to say by just how much. Since many companies deal with these cases with as little publicity as possible, there are no solid data on the number of cases ongoing in the Czech Republic.

The World Intellectual Property Organization (WIPO), the United Nations' copyright agency, announced Jan. 26 a 20 percent increase in cybersquatting complaints internationally in 2005.

Those doing the complaining are mostly companies and celebrities — Morgan Freeman, Larry King and Lance Armstrong among them. With nearly 60 million domain names registered worldwide, Francis Gurry, deputy director general of the WIPO, says the number of cybersquatting complaints is expected to rise even higher.

Trademarks

Like elsewhere in the world, there is no specific law in the Czech Republic regulating cybersquatting.

"The only rule, similar worldwide, is the right of first registration," says Klára Volná, spokeswoman for the IT Ministry. "The one who applies first gets the domain. How else would we define the right to domains that include general names, for example the name novak.cz?"

That rule, however, does not apply to domain names covered by trademarks. Dozens of companies in the Czech Republic have successfully won the right for their domain names under trademark-registration law.

The courts are currently hearing a case involving Tina magazine. The publication claims that a speculator registered tina.cz without any link to the name Tina. If the court rules in favor of the magazine, it would set a precedent.

Čermák says he is seeing a smarter type of cybersquatter these days.

"I believe that most domain name speculators have recently become aware of court practices," he says, "which are mostly favorable to trademark owners and other legitimate owners of brand and other names."

As a result, future cases are likely to involve domain names that fall outside of trademark law, he adds. The European Union, for example, is not a registered trademark.

Novák says he plans to use www.eu2009.cz to give Czechs a place where they can comment on European issues. (Click on the site now and it says simply "under construction.")

If he goes ahead with that goal, the Foreign Affairs Ministry would have a difficult time proving that Novák, an EU citizen, has no link to the EU, says Ondřej Filip, executive director of CZ.NIC, the organization that manages all ".cz" domain names.

Other cybersquatters could use a similar loophole as long as they are sure the domain name is in demand.

"I don't really see why the Foreign Affairs Ministry insists on having this particular domain," Filip says. "If they insist on this one, it means it has a certain value for them, and Mr. Novák could therefore increase the price he would demand for it."

Novák doesn't deny the Foreign Affairs Ministry's claim that he is a cybersquatter.

"We live in a democratic state where everyone is allowed to express his opinion — including the Foreign Ministry and its spokesman," he said.