Cybersquatting and Domain Name Trademark Disputes: What Can You Do?

You search your business name online and discover that someone else owns a domain using your name or trademark. The domain may be sitting unused, redirecting visitors to another website, or being used by someone who appears to be associated with your business.

For a trademark owner, discovering a domain like this can be concerning. A domain that closely resembles your brand can divert customers, create confusion, interfere with online sales, or potentially damage the reputation that your business has built around its name.

A domain name dispute can involve cybersquatting, trademark infringement, or both, depending on how the domain was registered and how it is being used. Trademark owners may have several options for addressing the problem, including negotiating a transfer, filing a domain name dispute, or pursuing legal action.

However, the fact that someone registered a domain containing your business name or trademark does not automatically mean that cybersquatting has occurred. Understanding the difference can help businesses determine what options may be available.

What Is Cybersquatting?

Cybersquatting generally involves registering, trafficking in, or using a domain name associated with another party's trademark in bad faith.

One of the most recognizable examples occurs when someone registers a domain containing an established trademark and then attempts to sell the domain to the trademark owner for significantly more than the cost of registering it. However, cybersquatting can involve other conduct as well.

For example, someone may register a domain that closely resembles an established brand and use it to redirect visitors to another business. A domain may also be used to advertise competing products, imitate the trademark owner's website, or otherwise take advantage of the reputation associated with an existing trademark.

The important distinction is that owning a domain that resembles someone else's business name does not automatically constitute cybersquatting. The trademark rights involved, the registrant's legitimate interests in the name, the timing of the registration, and evidence of bad faith can all affect whether a viable claim exists.

What Does Cybersquatting Look Like?

Cybersquatting is not always as obvious as someone registering your exact trademark and immediately offering to sell the domain back to you.

Potential cybersquatting can involve a person registering a domain that is identical or confusingly similar to an existing trademark. It can also involve a domain that intentionally misspells a trademark, redirects customers to another business, advertises competing products, or creates the appearance that the website is affiliated with the legitimate trademark owner.

Another related practice is known as typosquatting. Instead of registering the exact trademark, someone registers a predictable misspelling or variation of the name in the hope that users will accidentally visit the other website.

For example, a customer attempting to visit a company's website could mistype one letter in the domain and arrive at a website controlled by someone else. This can become particularly problematic when the other website sells competing products, displays misleading information, or attempts to imitate the legitimate business.

Who Legally Owns a Domain Name?

Registering a domain name generally gives the registrant certain contractual rights to use that domain during the registration period. However, registering a domain does not automatically give the registrant trademark rights in the words contained within it. Similarly, owning a trademark does not automatically give a business ownership of every domain name that contains the trademark.

This distinction becomes important when a domain name dispute occurs. If another person registers a domain containing your trademark, the analysis does not necessarily end with determining who registered the domain first. The dispute may also involve when trademark rights arose, whether the domain registrant has a legitimate interest in the name, how the domain is being used, and whether there is evidence of bad-faith conduct.

Registering a business name, purchasing a domain name, and obtaining trademark protection are separate steps. A business that owns one of these assets should not automatically assume that it owns the others.

Businesses that are still developing their brands can learn more about this distinction in our guide discussing whether you can trademark your business name.

What Happens If You Register a Domain for an Existing Trademark?

Registering a domain that contains another company's trademark does not automatically violate trademark law. There may be legitimate reasons for two businesses or individuals to use the same or similar terms, particularly when those terms have multiple meanings or the parties operate in unrelated industries.

The situation becomes more concerning when the domain was registered or is being used to take advantage of another party's trademark rights. For example, a registrant may attempt to sell the domain to the trademark owner at an inflated price, divert customers to a competing business, disrupt the trademark owner's business, or attract visitors by creating confusion with an established brand.

The surrounding circumstances are therefore important when evaluating a domain name dispute. The existence of a similar domain is only one part of the analysis.

The same principle applies more broadly to trademark infringement. Another business using a similar name does not automatically establish infringement because trademark disputes generally require an examination of the marks, the associated goods or services, potential consumer confusion, and other relevant circumstances.

If another person or business is using your trademark beyond a domain name, our article on what happens if someone uses your trademark discusses the issue in greater detail.

Why Is Cybersquatting Illegal?

In the United States, trademark owners may be able to pursue certain cybersquatting claims under the Anticybersquatting Consumer Protection Act, or ACPA. The ACPA addresses certain situations in which a person registers, traffics in, or uses a domain name with a bad-faith intent to profit from another party's protected mark.

The existence of a similar domain alone does not establish bad faith. The registrant may have an independent and legitimate reason for using the name, or the domain may have been registered before the trademark owner developed rights in the mark.

Courts evaluating claims under the ACPA may consider several circumstances when determining whether bad-faith intent exists. These circumstances can include the registrant's own rights in the name, prior use of the domain, the registrant's intent to divert consumers, offers to sell the domain, and patterns of registering domains associated with other trademarks.

This is one reason why businesses should investigate potential trademark conflicts before investing significantly in a new brand. A trademark clearance search can help identify existing trademark rights and other uses that may create problems as the brand develops.

Is Cybersquatting a Crime?

Cybersquatting claims brought under the ACPA are generally civil matters rather than criminal prosecutions. A trademark owner pursuing an ACPA claim is generally seeking civil remedies for the alleged misuse of its trademark in a domain name.

However, conduct involving a domain name can potentially create additional legal issues depending on how the website is being used. A website that impersonates a legitimate company to obtain customer information, for example, may present legal concerns beyond cybersquatting itself.

Is Domain Flipping the Same as Cybersquatting?

Domain flipping and cybersquatting are not necessarily the same activity. People can purchase domain names and later sell them for a profit without necessarily violating another party's trademark rights.

The legal concern becomes different when someone registers a domain because it incorporates another party's trademark and then attempts to profit from the goodwill associated with that trademark. The registrant's intent, rights in the name, and use of the domain can therefore be important when distinguishing ordinary domain investing from potential cybersquatting.

A high asking price by itself does not necessarily establish cybersquatting. The broader circumstances surrounding the registration and use of the domain still matter.

What Is the UDRP?

A federal lawsuit is not the only potential option available to trademark owners dealing with an abusive domain name registration. Certain disputes can also be addressed through the Uniform Domain Name Dispute Resolution Policy, or UDRP.

The WIPO guide to the UDRP explains the administrative process for resolving certain disputes involving abusive domain name registrations. The policy applies to generic top-level domains such as .com, .net, and .org, as well as other domain extensions that have adopted the policy.

To succeed in a UDRP proceeding, a complainant generally must establish three elements. The complainant must show that the disputed domain is identical or confusingly similar to a trademark in which the complainant has rights, that the registrant does not have rights or legitimate interests in the domain, and that the domain was registered and is being used in bad faith.

Evidence of bad faith can include circumstances showing that the registrant acquired the domain primarily to sell it to the trademark owner for an amount exceeding certain registration-related costs. Bad faith can also involve patterns of preventing trademark owners from registering corresponding domains, attempts to disrupt a competitor's business, or intentional efforts to attract users by creating confusion with another party's trademark.

The facts of each dispute are different, so the existence of one factor does not necessarily determine the outcome of a UDRP proceeding.

Can You Get a Domain Name Transferred to You?

A trademark owner may be able to obtain a disputed domain through a successful UDRP proceeding. The remedies available through the UDRP generally include the cancellation of the domain registration or the transfer of the domain to the successful complainant.

The UDRP does not provide monetary damages. This distinction is important because a trademark owner's objectives may determine which enforcement option makes the most sense.

If the primary concern is obtaining control of a domain, a UDRP proceeding may provide a focused way to address the dispute. However, if the conduct involves broader trademark infringement or other harm beyond the domain itself, the trademark owner may need to evaluate additional enforcement options.

What Is the Difference Between a UDRP Proceeding and a Cybersquatting Lawsuit?

A UDRP proceeding and an ACPA lawsuit can both address certain domain name disputes, but they are different processes with different potential remedies.

A UDRP proceeding is an administrative proceeding that focuses primarily on whether a disputed domain should remain with the registrant or be transferred or canceled. It does not provide monetary damages.

An ACPA claim, by contrast, is brought through federal court. Depending on the facts and claims involved, litigation may provide remedies that are not available through a UDRP proceeding.

The appropriate approach therefore depends on the nature of the dispute and the trademark owner's objectives. A situation involving only a disputed domain may require a different strategy from one in which another party is using the trademark across a domain, website, advertisements, social media accounts, and online marketplace listings.

Do You Need a Registered Trademark to Fight Cybersquatting?

A federal trademark registration can provide important advantages, but the absence of a federal registration does not necessarily mean that a business has no trademark rights.

Businesses in the United States can sometimes develop trademark rights through actual use of a distinctive mark in commerce. These rights are commonly referred to as common law trademark rights.

However, common law rights can raise additional questions involving priority, geographic scope, evidence of use, and the extent of the trademark owner's protection. Establishing the existence and scope of those rights may therefore require a more fact-specific analysis.

Our guide to common law trademark rights explains how these rights can arise and how they differ from federal trademark registration.

Federal registration can provide additional legal benefits and can make ownership and enforcement significantly clearer. Businesses developing a new brand should therefore consider trademark registration before a dispute arises rather than waiting until another party begins using the name.

What If the Domain Was Registered Before Your Trademark?

The timing of the domain registration can have a significant effect on a cybersquatting dispute.

Under the UDRP, a complainant generally must establish that the disputed domain was registered and is being used in bad faith. If a person registered a domain before the trademark owner developed rights in the mark, establishing that the original registration was intended to target those trademark rights can be more difficult.

However, the timeline of a dispute can involve more than simply comparing the current trademark registration date with the date that appears in a domain record. Trademark rights may have existed before federal registration, and certain changes involving the ownership or registration of a domain may also affect the analysis.

Businesses should therefore establish a clear timeline showing when they began using their trademark, when their trademark rights arose, when the disputed domain was registered, and how the domain has been used.

What Should You Do If Someone Is Using Your Trademark in a Domain?

If you discover a domain that appears to be using your trademark, it can be helpful to preserve evidence before contacting the registrant.

Businesses should document how the domain is being used and preserve screenshots of the website. Relevant evidence may include advertisements, products being offered, website redirects, contact information, statements suggesting an affiliation with your company, and any other use of your trademark.

Communications from the registrant should also be preserved. An email offering to sell the domain, for example, may become relevant when evaluating the registrant's intent.

The next step is to evaluate your own trademark rights and the history of the domain. You should determine when your business began using the trademark, whether you own a federal registration, what goods or services are associated with the mark, when the domain was registered, and whether the registrant appears to have an independent reason for using the name.

These facts can help determine whether the situation involves cybersquatting, trademark infringement, a legitimate competing interest in the name, or simply a domain that is unavailable.

Businesses should also be cautious about immediately contacting the domain owner before understanding their legal position. The appropriate first communication can depend on the circumstances surrounding the domain and the trademark rights involved.

How Can Businesses Reduce the Risk of Cybersquatting?

Businesses can reduce some domain-related risks by treating domain names as part of a broader trademark and brand-protection strategy.

Securing an important domain early can help prevent problems after a brand begins gaining recognition. Businesses may also consider registering commercially reasonable variations of their primary domain when those variations are particularly important to customers finding the legitimate website.

Domain registrations should also be monitored and renewed before they expire. Allowing an important domain to lapse can create an opportunity for another person to register it.

Trademark monitoring and enforcement can provide another layer of protection by helping businesses identify potentially problematic uses of their names as they appear. This becomes particularly important as a brand expands across websites, social media, online marketplaces, advertising platforms, and other digital channels.

A trademark registration does not prevent another person from attempting to misuse a brand. Instead, trademark protection can provide businesses with stronger tools for addressing unauthorized uses when they arise.

What Can You Do If Someone Registered a Domain Using Your Trademark?

Discovering your trademark in someone else's domain does not necessarily mean that your first step should be filing a lawsuit. The appropriate response depends on the trademark rights involved, the history of the domain, the registrant's legitimate interests, how the domain is being used, and whether there is evidence of bad faith.

Depending on those circumstances, a trademark owner may consider contacting the registrant, negotiating a domain transfer, filing a UDRP complaint, pursuing an ACPA claim, or addressing separate trademark infringement.

The domain itself may also be only one part of a larger brand-protection issue. Businesses that discover unauthorized uses should consider whether the same name is appearing on websites, social media accounts, advertisements, marketplace listings, or other online channels.

Stockman & Poropat, PLLC works with businesses and trademark owners on trademark registration, infringement, enforcement, and brand-protection matters. If someone has registered or is using a domain that incorporates your trademark, contact Stockman & Poropat, PLLC to discuss the circumstances and the options that may be available.