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What is Cybersquatting?

Published on April 05, 2021

When the Internet first became a popular avenue for businesses to sell their goods, people who were tech-savvy found opportunities to make money by buying different domain names of companies with a trademarked name in order to allow them to buy the domain name for their use. These people began the trend of cybersquatting.

Cybersquatting is when a person buys a domain name and either tries to ransom it to the trademark owner or when the owner of the domain tries to direct the trademark owner’s business to the domain name they have purchased. In most cases where cybersquatting is involved, the case is typically found in favor of the company or brand if the person who purchased the domain name did so with bad intent. People can’t buy domain names with the intent purpose of reselling the domain to the rightful trademark owner or to make a profit off the company or brand’s sales.

As an up-and-coming business owner, it is very important to make sure you check the trademarks that are already created by businesses that may be similar to yours and to make sure you have full legal control over your domain. Here are some tips to help avoid becoming a victim of cybersquatting:

  • Purchase generic top-level domains so that you can have full control over the domain names that are closest to your actual brand name. This way cybersquatters can’t try to scam you.
  • Think of any possible way of misspelling your brand name. Another way to find this out is to tell different family or friends about your domain name and see how they all choose to spell the name. You can also try speaking into a speech-to-text device and see what the program comes up with.
  • Always make sure you keep your company’s domain registration information current. Don’t forget which card you purchased your domain name on, so you won’t forget to change it when your card’s expiration date rolls around.

What happens if the domain name you’re looking to purchase is already in use by someone else and they have clear advertisements directed to your product? Business owners who have fallen victim to cybersquatting have a couple of options. First, you can sue under the provisions of the Anti-Cybersquatting Consumer Protection Act (ACPA) or you can use the international arbitration system created by the Internet Corporation for Assigned Names and Numbers (ICANN).

When suing under the ACPA, the trademark owner must prove that the current domain owner has a bad-faith intent on profiting from the trademark, the trademark was already in place at the time of the domain name purchase, the domain name is identical or confusingly similar to the trademark, and the trademark qualifies for protection under federal trademark laws. This method allows the court to obtain a court order and transfer the domain name back to the trademark owner. In some cases, the cybersquatter may have fees to pay the trademark owner for damages as well. But according to Peter Kent, Cybersquatting Expert Witness, “If the accused can prove that they had a reason to register the domain name other than to resell for profit, or profit from the trademark holder’s business goodwill in some other way, the court may allow them to keep the domain name.”

If you decide to go through the ICANN, you will be going through arbitration of the dispute. You must show that the domain name is identical or confusingly similar to the trademark or service, that the domain owner has no rights or legitimate interest in the domain name, and the domain name has been registered and is being held in bad faith. If the trademark owner prevails, the domain name will be canceled or transferred to the trademark owner. Financial compensation is not available through this route.
No matter which route you decide to take to combat cybersquatters, you should always consult a professional to seek the best course of action. Whether you contact a representative from ICANN or seek out an attorney who is well-versed in fighting cybersquatters, it’s important to make sure you’re taking the proper steps to protect your business.

Technology Reporter