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ONLINE BUSINESS

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

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If you own a trademark and find that someone is holding it hostage as a domain name until you pay a large sum for it, you may be the victim of cybersquatting. You can sue to get your domain name -- and possibly some money damages -- under a 1999 federal law known as the Anti-Cybersquatting Consumer Protection Act.

Under the act, cybersquatting means registering, trafficking in, or using a domain name with bad-faith intent to profit from the goodwill of a trademark belonging to someone else. It refers to the practice of buying up domain names reflecting the names of existing businesses, intending to sell the names for a profit back to the businesses when they go to put up their Web sites.

The Origins of Cybersquatting
The practice that has come to be known as cybersquatting originated at a time when most businesses were not savvy about the commercial opportunities on the World Wide Web. 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 a cybersquatter has your name? As a general rule, you should first see whether your proposed but unavailable domain name takes you to a legitimate Web site. Simply open your browser and enter "www." followed by the domain name.

If the domain name takes you to a Web site that appears to be functional and reasonably related in its subject matter to the domain name, you probably aren't facing a case of cybersquatting. However, you may have a case of trademark infringement.

But if your browser produces any of the following results, and you are a famous individual or are using your existing business name as your proposed domain name, you may have a case of cybersquatting on your hands:

  • You get a " can't find server" message.
  • You get an " under construction" page.
  • You get a page that appears to have no relationship to the meaning of the domain name. For instance, if you type the well-known Nolo trademark WillMaker into your browser (www.willmaker.com), you get Shells' Ragtown Political Art Studio. (Yes, Nolo.com appears to have its own cybersquatter problems.)

Although each of these results suggests the possibility of cybersquatting, there may also be an innocent explanation, especially if the Web site is still under construction. It's very easy and inexpensive to register or reserve domain names but more difficult to put up the actual Web site. You can reserve a domain name for two years, so the fact that a Web site is not up, even months after the name was reserved or registered, does not necessarily mean that the registrant doesn't have perfectly legitimate plans to have a Web site in the future.

Before jumping to any conclusions about a proposed domain name that is not available, contact the registrant. (You can get contact information through the domain name registry.) Find out whether there is a reasonable explanation for the use of the name, or if the registrant is willing to sell you the name at a price you are willing to pay.

Sometimes paying the cybersquatter is the best choice. Even though there's a law against cybersquatting, enforcing it requires suing in federal court and, almost by necessity, hiring lawyers. It may be a lot cheaper and quicker for you to come to terms with a squatter. Although you may be able to recover your costs and attorney fees if you win, there is no guarantee; it's completely up to the judge.

Last updated: May 12, 2000




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