The practice that’s come to be known as cybersquatting began when most organizations were not aware of the commercial opportunities available on the internet. Many individuals decided to buy up domain names with the idea that when business owners began to look to register such domain names for their businesses, they could sell the domains to them at exorbitant prices. Today, most business owners impacted are much smaller in size than those that were affected in the past. Some examples of early cybersquatting victims include Panasonic, Hertz, and Avon.
Most business owners today are aware of the seriousness of locking down a domain name for their business as soon as possible to avoid this problem, but many individuals still run into this issue today. Regardless of the size of your enterprise, if you are a victim of cybersquatting, you may be due compensation and have legal recourse.
What is Cybersquatting?
Cybersquatting, sometimes referred to as domain squatting, is registering, trafficking in, or using an Internet domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. This is the term as defined by the United States federal law known as the Anticybersquatting Consumer Protection Act.
Generally, cybersquatting occurs when an individual or group begins buying up domains that share the name of a company or companies that are gaining momentum but have not acquired that domain yet. The purpose of the purchase is strictly to sell back the domain to the company for a profit. Imagine if a company manufacturing vehicles didn’t have a website yet, and you purchased a domain that bore their company trademark so you could sell it back. You would then be in violation of the California Cybersquatting law.
Cybersquatting doesn’t generally happen by accident. Most cases brought to court involve an individual clearly being aware of their intentions. There are cases that are sometimes found to be frivolous. For example, an individual may come up with the same name for a different business, purchase the domain, and utilize it before another company seeks to use the name. In order to try and take the domain for themselves, they may falsely accuse the first organization of taking their branding or the domain for cybersquatting purposes when it is clearly a case of someone else having the idea for the domain name first.
Identifying Cybersquatting
Here is a brief checklist to identify cybersquatting and know how to handle it:
- The domain does not take you to a functioning website. If the domain takes you to a site claiming something along the lines of the domain being for sale, the odds are more likely you are dealing with a cybersquatter.
- Upon contacting the site owner, they are unable to provide a reason for the existence of the site. If a domain is being held with no intention to be built upon for an existing purpose by the owner, this is likely cybersquatting. You can contact a site owner by searching the domain with whois.net for information.
- Find out what the site owner is looking to sell the domain for. If the domain owner does not have a legitimate business need for the domain and yet is holding it ransom for a high price, you’re probably dealing with a cybersquatter. Keep in mind, however, that sometimes the price a cybersquatter is looking to charge is less than what it would cost for legal recourse. Consult with an attorney if you’re unsure. If the owner is willing to work with you and offer a fair price, it may be worth paying it.
Taking Action Against Cybersquatting
If you do decide to take the individual to court after contacting them, usually if they are being unreasonable or asking a ridiculous sum for the domain, you have two options to take action.
A victim of cybersquatting may:
- Sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA)
- Use an international arbitration system created by the Internet Corporation of Assigned Names and Numbers (ICANN)
Trademark experts generally advise using the ICANN procedure if possible due to the fact that it is considered to be faster and less expensive than suing under the ACPA and does not require an attorney. However, depending on the severity of your case, it may still be very much beneficial to consult with an attorney about your options.
If you do decide to sue under the ACPA, you must prove the following in court:
- the domain name registrant had a bad faith intent to profit from the trademark
- the trademark matching the domain was distinctive at the time of the registration or carried some value
- the domain name is identical or confusingly similar to the trademark
- the trademark qualifies for protection under federal trademark laws, meaning the trademark is distinctive and the owner was the first to use it in commerce
The accused cybersquatter will generally have to prove that there was a reason for the domain registration other than to sell it back to the trademark owner for a profit. If the accused can prove this, then the domain will usually be left with the original owner.
Need an Attorney for a Cybersquatting Case?
WB Law Group is a reputable business litigation firm with experience in matters involving California cybersquatting law. If you feel you need legal representation, we are happy to review your case and provide consultation.
For questions, or to schedule a consultation, contact us today at (559) 431-4888.