Cybersquatting: What It Is and What Can Be Done About It

Here's what to do if someone is cybersquatting on the domain name that matches your trademarked business name.

Updated by Amanda Hayes, Attorney · University of North Carolina School of Law

If you own a trademark and find that someone's holding it hostage as a domain name until you pay a large sum for it, you might be the victim of cybersquatting. Learn what to do if this happens to you.

What Is Cybersquatting?

"Cybersquatting" is registering, selling, or using a domain name with the intent of profiting from the goodwill of someone else's trademark. In practice, cybersquatting generally involves buying up domain names that use the names of existing businesses for the sole purpose of turning around and selling the names to those businesses.

The practice that's come to be known as cybersquatting originated at a time when most businesses weren't savvy about the commercial opportunities on the internet. Some entrepreneurial souls registered the names of well-known companies as domain names, with the intent of selling the names back to the companies when they finally woke up. Panasonic, Fry's Electronics, Hertz, and Avon were among the "victims" of cybersquatters.

Opportunities for cybersquatters are rapidly diminishing because most businesses now know that nailing down domain names is a high priority.

Recognizing Cybersquatting

How do you know if the domain name you want is being used by a cybersquatter? Follow these steps to find out.

Check Where the Domain Name Takes You

As a general rule, you should first check to see if the domain name takes you to a website. You might be dealing with a cybersquatter if the domain name doesn't take you to a functioning website but instead takes you to a site that says either:

  • "this domain name is for sale"
  • "under construction," or
  • "can't find server,"

The absence of a real site can indicate that the domain name owner's only purpose in buying the name is to sell it back to you at a higher price.

Of course, the absence of a website doesn't always mean the presence of a cybersquatter. There could also be an innocent explanation and the domain name owner could have perfectly legitimate plans to have a website in the future.

If the domain takes you to a functioning website that's comprised primarily of advertisements for products or services related to your trademark, you might also have a case of cybersquatting. For example, suppose your company is well-known for providing audiovisual services. You find a domain using your trademark packed with ads for other companies' audiovisual services. In this case, a cybersquatter is likely operating the site to trade off your company's popularity to sell Google ads to your competitors.

Instead, suppose the domain name takes you to a website that appears functional, has a reasonable relation to the domain name, and doesn't compete with your products or services. In that case, you probably aren't looking at a case of cybersquatting. For example, if your trademark is "Moby Dick" for fine art dealing with whaling, and the website you encounter is for road cleaning machines, you don't have a case of cybersquatting. You might, under certain circumstances, have a case of trademark infringement.

Contact the Domain Name Registrant

Before jumping to any conclusions, contact the domain name registrant. To find the name and address of a domain name owner, you can use the Whois domain lookup.

Find out why the registrant owns your domain name. If the registrant seems like a cybersquatter, then you could take legal steps to fight the cybersquatter (discussed more below).

However, if the registrant is legitimately using the domain name, consider other options like:

  • using a different suffix (for example, .net instead of .com)
  • changing the domain name slightly, or
  • buying the domain name from them.

Sometimes, paying the cybersquatter is the best choice. It might be cheaper and quicker than filing a lawsuit or initiating an arbitration hearing.

(For more information, see our article on what to do if the domain name you want is taken.)

What You Can Do to Fight a Cybersquatter

A victim of cybersquatting in the United States has two options:

Trademark experts consider the ICANN arbitration system to be faster and less expensive than suing under the ACPA, and the procedure doesn't require an attorney.

Using the ICANN Procedure

In 1999, ICANN adopted and began implementing the Uniform Domain Name Dispute Resolution Policy (UDNDRP), a policy for resolution of domain name disputes. This international policy results in an arbitration of the dispute, not litigation.

Under ICANN, you can win against a cybersquatter as long as all of the following are true:

  • a domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights
  • the domain name owner has no rights or legitimate interests in the domain name, and
  • the domain name has been registered and is being used in bad faith.

If you (referred to by ICANN as the "complainant") win, the domain name will be canceled or transferred to you. However, financial remedies aren't available under the UDNDRP. Information about initiating a complaint is provided on the ICANN website.

Suing Under the ACPA

The Anticybersquatting Consumer Protection Act (ACPA) authorizes a trademark owner to sue an alleged cybersquatter in federal court and obtain a court order transferring the domain name back to the trademark owner. In some cases, the cybersquatter must pay money damages.

In order to stop a cybersquatter, the trademark owner must prove all of the following:

  • the domain name registrant had a bad-faith intent to profit from the trademark
  • the trademark was distinctive at the time the domain name was first registered
  • the domain name is identical or confusingly similar to the trademark, and
  • the trademark qualifies for protection under federal trademark lawsthat is, the trademark is distinctive and its owner was the first to use the trademark in commerce.

Defenses to ACPA lawsuits. If the accused cybersquatter demonstrates that they had a reason to register the domain name other than to sell it back to the trademark owner for a profit, then a court will probably allow him to keep the domain name.

For extensive information on cybersquatting, domain names, and changes to trademark statutes, get Trademark: Legal Care for Your Business & Product Name, by Stephen Elias and Richard Stim (Nolo).

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