Cybersquatting Law | How to Combat Cybersquatting

Anyone who owns a business should make themselves aware of cybersquatting. As people around the world increasingly live their lives online, more risks arise everyday for businesses. What is the definition of cybersquatting? When someone purchases a domain name or names with the same name as a business that already exists. And, holds onto it with the sole intention of selling the domain to the business for profit. 

Trademark owners are targeted in particular. Perhaps you’re wondering how cybersquatting started. With innovation comes opportunity. Not everyone involved in technological advancement wants to use those developments for good. In the earlier days of the internet, folks with bad intentions registered online domain names using the names of major companies. They did this with a specific plan in mind. When the major companies realized their name was already taken, the entities who bought those domains sold it back to them at a high cost. 

Indicators of Cybersquatting!

When searching a particular domain, you might find that the domain name brings you to an unwanted destination. A site that says things like “can’t find server,” “under construction,” or “this domain name is for sale.” These can be indicators of cybersquatting! Alternatively, domains that lead to an actual website could also suggest that cybersquatting is taking place. Sometimes you’ll find that a domain goes to a website filled with advertisements for goods or services tied to your trademark. So, if your company is a reputable art supply business and the website with your business name advertises competitors – this could mean that someone is cybersquatting. Cybersquatters use the reputation and brand popularity of established companies to sell advertisements to competitors. 

There are different versions of cybersquatting, too. Typosquatting, name jacking, identity theft, and reverse-cybersquatting. Typosquatting banks on user typos – spell the name slightly wrong, get taken to a different website. These domains are spelled incorrectly on purpose to divert traffic away from established brands. Name jacking is when a cybersquatter registers a domain using the name of famous people. Identity theft is when a cybersquatter buys a domain that wasn’t renewed by the owner of the trademark. And, reverse-cybersquatting is when trademark holders coerce domain registrants into transferring ownership. 

Cybersquatting Law | Is Cybersquatting Legal or Not?

Lots of businesses want to know if cybersquatting is legal or not. It is illegal! Let’s talk about the Anti Cybersquatting Consumer Protection Act (ACPA). Passed in 1999, the ACPA gives businesses the power to take legal action. Namely, against those who are “registering, trafficking in, or using a domain name confusingly similar to, or dilutive of, a trademark or personal name.” This means, trademark owners can sue cybersquatters in federal court under the ACPA law. To do this successfully, mark owners need to understand the following: 

• If a mark owner wants to claim their trademark is diluted by a domain name, the mark needs to be well-known at the time the domain was registered. Dilution refers to the weakening of a trademark by way of infringement. 
• Mark owners need to prove that the cybersquatter intended to infringe on their rights for profit. 

Lots of businesses want to use their business name for their domain name. Of course, why wouldn’t you want that! You’ve got a product or service, a consumer base that associates your brand with those offerings, and you want to extend that identity to the online space. Unfortunately, doing so without an issue isn’t always easy! So, if someone’s already using a domain name that’s the same as your business name, you have a few options. 

Trademark Law & Cybersquatters

Trademark law in the United States dictates that the owner of a trademark is the one who first used that trademark in commerce for a given type of goods or services. First on the market and in commerce takes precedence! Meaning, if you sold your goods or services before the registrant of the domain name in question started using it for similar offerings, you can take action. 

Trademark owners who wish to challenge a domain name have the power to file a cybersquatting lawsuit. Under the ACPA, mentioned above, cybersquatting victims can file lawsuits in federal court to get possession of a domain name. Likewise, mark owners can sue for damages and receive financial compensation. Additionally, businesses can go forth with a trademark infringement lawsuit. That allows trademark holders to potentially have the court order that the domain name registrant transfer the ownership of the domain. 

There’s also the Internet Corporation for Assigned Names and Numbers (ICANN). This nonprofit organization seeks to establish a “stable, secure, and unified global Internet.” Through ICANN, trademark owners or business owners can utilize the Uniform Domain-Name Dispute-Resolution Policy (UDRP). The UDRP is a procedure that applies solely to disputes regarding cybersquatting. If anyone registers your business name with ill intent and plans to profit from your trademark, that’s where the UDRP comes in. This option may cost businesses less than filing a federal trademark infringement lawsuit. And, it may take less time than filing a lawsuit. 

Protecting Yourself From Cybersquatting…

How do you protect yourself from cybersquatters? For one, you should register your trademark(s) sooner rather than later. Legal action is only possible for registered trademark owners. Another good idea is to educate yourself on the parameters of your legal protections as a trademark holder. You may also consider buying top-level domains (TLDs) in the country or countries you want to conduct your business in. And, similarly, monitor the expiration date of any/all domains that you have. Not to mention, there are many software solutions available to address cybersquatting, which could be worth the investment. We should note, too, that it does just happen that a domain name is registered with a name similar to yours. Rather than taking legal action or the like, you can contact the owner of the domain and try to find a resolution that way. 

If you’ve been the victim of cybersquatting or just want to learn more about how to protect your business, contact our team at Stockman & Poropat, PLLC today! We can help with trademark registration and/or taking the necessary legal action to get you the domain you need to maintain a successful business.

Up next we will be discussing Selling Trademarks.