What is cybersquatting?

The domain market is full of users occupying promising addresses. If these domain names are trademarked terms, they might be breaking the law. This practice, often considered illegal, is commonly referred to in internet terms as cybersquatting.

Cybersquatting meaning and types

While domain grabbers target unprotected terms, cybersquatters concentrate specifically on trademarks and proper names. The aim of registering legally-protected terms as part of the domain name is to sell them to the actual rights owner for a higher transfer fee.

Cybersquatting is also referred to as brand jacking or name jacking, depending on the type of trademark protection. If the controversial domain contains the name or part of the name of musicians, sports personalities, TV stars, or other celebrities this results in an overlap of both practices.

To put pressure on rights holders, many of these domains are used for malicious purposes. For example, they include content which shows the business or the person concerned in a bad light.

A special type of cybersquatting is typosquatting, where typos are purposefully made in brand name domains in order to intercept visitors.

Domain name law in the US

The Anticybersquatting Consumer Protection Act (ACPA) was created in the US in order to solve domain name disputes. This is also known as “Truth in Domain Names Act” and is an extension of the Lanham Act, which governs US trademark law on a federal level. It came into effect in 1999 and was intended to protect consumers from being misled.

A typical use for ACPA is cybersquatting. In order to appeal to the law, the plaintiff needs to be the trademark owner and show that the defendant is maliciously profiting from using their brand as a domain name. The domain and brand need to be identical or confusingly similar for the case to have any chance of success.

For disputes relating to international domains, ICANN (Internet Corporation for Assigned Names and Numbers) has introduced a central arbitration procedure, known as the Uniform Domain Name Dispute Resolution Policy (UDRP). This offers an alternative to negotiations before a state court and enables complainants to obtain a transfer of the disputed domain in addition to deletion.

When does using a brand name actually become controversial? Previously, such maliciousness was determined by US jurisdiction as being when a domain is registered in order to abuse a brand’s traffic domain for their own purposes, or when a domain is bought so it can be sold to the trademark owner. In addition, providing false data during the registration process is considered malicious. While the legal consequences of ICANN’s UDRP procedure are limited to deletion or transfer of a domain, the ACPA also allows claims for damages of up to USD 100,000 to be obtained.

Social media and cybersquatting

Social media sites like Facebook and Twitter continue to grow in popularity and this has led to a new form of cybersquatting where trademark-protected brands or names are registered by others. They have now made the practice a violation of their terms and services. Tony La Russa, manager of the St. Louis Cardinals, found out the hard way just how damaging cybersquatting can be. Someone registered a Twitter account using his name and posted many derogatory status updates with the aim of damaging his reputation. He was the first celebrity to file a lawsuit against the site, before later dropping it.

Facebook is also strict when it comes to trademark infringement. Trademark owners must report any unlawful profiles as soon as they see them. A further step to prevent cybersquatting is mobile phone authentication, which involves a user verifying their account by phone in order to get a username.

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