Cybersquatting

Cybersquatting is the purchase of a domain name in bad faith. Usually this is done with the intention of reselling that domain name back to the legal copyright holder, although sometimes there are other reasons. This is considered a violation of the trademark laws.

An example of cybersquatting would be if someone purchased the domain name "mcdonalds.ws" and then proceeded to attempt to sell it back to McDonalds.  It would also be considered a violation of the law if the purchaser put up a web site describing how bad McDonald's food was or commenting on the service.

Cybersquatting was made illegal by the passage of a federal law in 1999 known as the Anti-Cybersquatting Consumer Protection Act. The law became necessary because numerous large companies were forced to pay large sums to buy their domain names from third parties. These companies included such notables as Panasonic, Fry's Electronics, Hertz and Avon.

How do you know if a company is a victim of cybersquatting? Type in a name that has been trademarked preceded by "www" and following by ".com", ".net" or ".org". If you get a valid web site which looks like it is related in some way to the domain name, then there is no cybersquatting in effect (although this could be a simple trademark violation). However, if you get one of the following results, then this could be a cybersquatter.

• Can't find server
• under construction
• page with no relationship to domain name

Of course there could be a reasonable explanation for each of these results, so they do not always mean there is cybersquatting occurring. It's a good idea to contact the domain name owner before taking any legal action to find out what's going on.

How do you prove someone is cybersquatting?

• The domain name registrants intention was to profit from your domain name in bad faith
• Your trademark was in effect and widely known at the time the domain name was registered
• The domain name is identical to your trademark
• And you have actually registered the trademark

How do you know there is a bad faith intent? Well, there is probably no bad faith intent if one of the following is true:

• The domain name is the same as the person's name or nickname.
• They are actually selling or intend on selling something on their web site
• Does the web site owner actually have a legitimate use of the domain name? This would be, for example, true for a company named "McDonalds Plumbing". They would have a legitimate reason for owning the "McDonalds" domain name.

Some clues that cybersquatting is occurring include:

• The domain name owner has put up a web site which in some way harms your company. For example, if you had somehow purchased "AOL.ORG" and created a web site about how AOL provided terrible service, you are cybersquatting.
• If the domain name owner never legitimately used the domain name and simply offered to sell it to you, he is cybersquatting.
• If a person buys up a lot of names and has sold them over and over, there is a pattern of cybersquatting.
• If the domain name is the same as a very famous trademark, then it has a greater likelihood of being considered cybersquatting.

What can happen if someone is found guilty of cybersquatting is they can be ordered to hand over the domain name. In addition, if the domain was purchased after 1999, they can be ordered to pay monetary damages.