Our Colorado IP Lawyers Discuss Domain Name Disputes & Cybersquatting

Image of a computer hacker

These days, if your business doesn’t have a strong web presence, it’s as if it doesn’t exist. Savvy entrepreneurs buy domain names even before they have a website design in order to carve out a spot for their brand online.

What is a domain name?

A domain name is the user-friendly name given to a website so users don’t have to bother with technical, numerical IP addresses when navigating around the internet. The Domain Name System (DNS) translates the domain names people use to find a website into the corresponding IP address computers use to find a specific location on the internet. The DNS also tracks and regulates domain names.

No two domain names can be exactly the same, so once someone registers a specific domain name, no one else can use it. While the process of registering a name may seem simple and straightforward enough, the business of domain names can get complicated and disputes often arise.

What this article covers

This article covers one of the most common catalysts for such disputes: cybersquatting. Cybersquatting is, in its most basic dictionary definition, the practice of registering names, especially well-known company or brand names, as internet domains in the hope of reselling them at a profit.

Below, we provide a more thorough definition, but first, it’s important that if you have been the victim of, or accused of, cybersquatting, you contact a trademark attorney, like those in Robinson & Henry’s business litigation practice, right away. As you’ll learn in this article, untangling a domain name dispute can be an arduous process and, therefore, the help of an experienced attorney can be invaluable.

Click here to contact one of our attorneys.

What is cybersquatting?

Imagine this: you’re a famous singer/songwriter who has been around for years. It’s finally time to create a website to give your loyal fans a place to find you online. But when you go to register your domain – www.yourfamousname.com – you learn it’s already registered to someone else. They’ll let you have it, they say, for a cool $35,000 (they paid $10 for it).

The individual who bought a domain under your name and is now trying to sell it back to you is cybersquatting, a practice that is illegal under the 1999 Anticybersquatting Consumer Protection Act (ACPA).

Celebrities like Madonna and Bruce Springsteen, along with large corporations like Panasonic and Hertz and even everyday folks have found themselves in this situation. While it was more common and easier for cybersquatters to commandeer a domain in the early days of the internet, it has become more difficult and less common now that companies and individuals alike make establishing a domain a high priority. But that doesn’t mean it doesn’t happen.

When it’s illegal: differentiating between cybersquatting and domain investing

Generally, the intention is what makes cybersquatting a crime and a case comes down to whether the alleged squatter acted in bad faith (see more below, under “How to prove cybersquatting”). Cybersquatting is not to be confused with legal domain investing, though there is certainly a fine line between them.

Those in the business of domain investing liken the practice to the buying and selling of physical real estate. In a nutshell, domain investors buy and sell nontrademarked domain names, monitoring global trends and consumer patterns to help them learn what to buy, when to buy it and when to sell it. Cybersquatters, by comparison, intentionally buy domains for trademarked names or a variation of a trademarked name, for example, the trademarked name spelled with a typo.

Again, there is a fine line between legal domain investing and cybersquatting, so those participating in an honest investing business should be well versed in the regulations and policies laid out in the ACPA, by the World Intellectual Property Organization (WIPO) and by the Internet Corporation for Assigned Names and Numbers (ICANN).

It’s also always a good idea to consult with an attorney if you’re unsure about the legality of your practices. An experienced domain attorney can also represent you should someone file a uniform domain name dispute against you (see the section on “Fighting cybersquatting” for more information about uniform domain name disputes).

How to know if the domain you want is being used by a cybersquatter

Follow this two-step checklist to help you determine whether your dream domain is being used by a cybersquatter.

  • Click on the domain you want to use, or enter the domain you’d like to use (for example, www.yourname.com) into your browser’s navigation bar and see where it takes you. Two signs that you might be dealing with a cybersquatter include:
    • The absence of a live, functioning website. There might be text that says, “domain name for sale,” “server not found” or “website under construction.”
    • A live, functioning website that is filled with advertisements for goods and services relating to your industry and/or trademark (in which case the cybersquatter may be trying to take advantage of your brand awareness and good reputation).
  • Get in touch with the domain registrant (the person who currently owns the domain name). You can track down a name and email address using WHOIS (whois.net). The registrant might offer a reasonable explanation for the domain registration or he/she might offer to sell it to you for a specific price.

Keep in mind that these are just signs that someone may be cybersquatting; just because the website you land on says it’s “under construction,” doesn’t mean that someone isn’t actually working on building a valid website that will be live in the future.

Tip: If the domain takes you to a live, functioning website that looks to be legit and whose purpose seems to fit the domain, it’s less likely you have a case of cybersquatting, though you made have a case of trademark infringement.

Click here to learn more about trademark infringement.

At that point you can, of course, pay if you decide the price of purchasing the domain is reasonable and cheaper than, say, a lawsuit. Or, for other options see the next section, “Fighting cybersquatting,” below.

Fighting cybersquatting

If you believe you have been the victim of cybersquatting and you want to fight it, then your options are to either file a lawsuit (aka, sue) under the ACPA or file a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP). See the “Proving cybersquatting” section below for information on what is required to prove cybersquatting under both the ACPA and the UDRP.

Here’s what you can expect if you decide to fight cybersquatting under either the ACPA or the UDRP.

Fighting cybersquatting under the Anticybersquatting Consumer Protection Act (ACPA)

The ACPA allows those who believe they have been the victim of cybersquatting to sue the alleged cybersquatter in federal court. If the plaintiff (the victim) can prove that the alleged cybersquatter acted in bad faith (see the section below on “Proving cybersquatting” for more information on proving bad faith) and that the domain name is similar enough to the plaintiff’s trademark to cause consumer confusion, then the domain may be transferred to the trademark holder and the cybersquatter could face steep fines.

On the other hand, if the alleged cybersquatter can show that he/she registered the domain in good faith – with no intent to profit by selling it or exploiting the trademark’s popularity and reputation to generate ad revenue – and believed his/her use of the domain was fair and lawful, then the court will likely determine the domain was not acquired in bad faith and allow him/her to keep the domain name.

Fighting cybersquatting under the Uniform Domain Name Dispute Resolution Policy (UDRP)

The alternative to suing under the ACPA is to file a complaint under the UDRP, which is a process set by the Internet Corporation of Assigned Names and Numbers (ICANN) that defines how to resolve trademark-based disputes over domain names.

While this process is usually less costly and typically results in a resolution faster than a lawsuit, it’s important to note that you cannot collect damages under the UDRP; if it is determined that the complainant is the victim of cybersquatting, the domain(s) in question can be returned to the trademark holder (the complainant) or shut down.

As with a lawsuit under the ACPA, a complainant under the UDRP must prove the alleged cybersquatter registered the domain name(s) in bad faith.

Proving cybersquatting

Proving cybersquatting usually comes down to intent; when filing a cybersquatting lawsuit under the ACPA, a plaintiff (the person who is filing the suit) must prove the defendant (the alleged squatter) acted with “a bad faith intent to profit” from the trademark.

The requirement to prove the intent was in bad faith helps protect those who innocently, mistakenly register a trademarked domain, but proving bad faith can be difficult, which is why it’s a good idea to work with an attorney. An experienced trademark attorney will be able draw on his/her knowledge and experience with these types of cases in order to make yours as strong as possible.

To illustrate bad faith intent in cybersquatting scenarios, here are a couple of examples of real-life cases and sample scenarios involving bad faith:

  • In 2008, an internet company called OnlineNic purchased 663 domains that were variations of, and even identical to, Verizon Communications’ trademarks. Think domain names like “verizononline.com” and “myverizonwireless.com.” Verizon sued OnlineNic for bad faith registration and trademark infringement and was awarded $33.2 million.
  • In cases like this one, the alleged squatter purchases domains that are a slight variation of a trademarked domain, where the variation is usually a common typo or misspelling of the trademarked name (also known as typo squatting). The squatter might then try to monetize the domain by trying to sell it back to the trademark owner at a steep price or by selling advertising on the fraudulent website, taking advantage of visitors who misspell the domain of the trademarked name, arriving on it mistakenly, only to be bombarded with a barrage of pop-up ads. In this situations like these, the intent to benefit off the popularity and good reputation of the trademarked name shows bad faith.

By contrast, the ACPA lists factors that may prove a defendant did not act in bad faith, including: “i) the trademark or other intellectual property rights of the defendant in the name; (ii) the extent to which the domain name consists of the defendant’s legal or nickname; and (iii) the defendant’s prior use of the domain in connection with the bona fide offering of goods or services.”

Again, an alternative to filing a cybersquatting lawsuit under the ACPA is to file a complaint under the UDRP (see the prior section on “Fighting cybersquatting” for more information on the UDRP). For a complaint to be successful under the UDRP, a trademark owner must prove all of the following:

  • The domain name is the same as or similar enough to the trademarked name to cause consumer confusion;
  • The domain name holder has “no rights or legitimate interests in respect of the domain name;” and
  • “The domain name has been registered and is being used in bad faith.”

Contact us for help

Whether you need to file a domain name dispute, or you have been accused of cybersquatting, the business litigation attorneys at Robinson & Henry can help. We’ve represented clients on both sides of domain name disputes and can help you navigate through the process, including fighting for you in court should your case go to trial. Contact us at 303-688-0944 to request a free initial consultation.