What Is Cybersquatting?

Cybersquatting involves buying website domains, especially those of well-known companies or brands, for financial gain or unlawful use. Cybersquatters often intend to profit from someone else's registered trademark by purchasing a domain name before the trademark owner can do so.

How Did Cybersquatting Begin?

Cybersquatting started in the 1990s before most businesses were active on the internet. People bought domain names of businesses with plans to sell the domains to those businesses for profit. When businesses realized that having a website was important and they tried to buy the domain names, they faced large fees from cybersquatters.

Buying and selling company domains isn't the only way to cybersquat. Cybersquatting can involve the following:

  • Buying domain names of common words to resell.

  • Buying misspellings of popular websites.

  • Buying expired domains to sell back to the original owner.

  • Buying domain names to create misleading websites. These sites may collect personal data or spread viruses.

Cybersquatting became a crime with the 1999 Anti-Cybersquatting Consumer Protection Act (ACPA). The ACPA made it illegal to buy domain names that are identical to or very similar to trademarks. A trademark is a word or phrase that identifies your products and services.

Businesses today are more aware of cybersquatting and how to avoid it. However, cybersquatting can still be a challenge for business owners.

How to Recognize Cybersquatting

If you suspect you're a victim of cybersquatting, search for the domain name and look for websites that:

  • Offer to sell you the domain name.

  • Are full of ads with no content.

  • Mimic your website.

  • Say negative things about your business.

  • Are under construction for a long time.

  • Show a "server not found" message.

If a website appears to have a valid purpose, it's probably not cybersquatting. Even the above clues aren't certain signs of a cybersquatter. "Server not found" or "under construction" could mean a business is still building its website.

If a website is using your desired domain for legal purposes, you can:

  • Offer to buy the domain from the owner.

  • Choose a different domain name.

  • File a trademark infringement suit. A trademark infringement suit claims that someone is illegally using your trademark.

To confirm if a domain owner is a cybersquatter, you must contact the domain owner and ask. You can find the owner of a domain through WHOIS Lookup. If the owner tries to sell you the domain for a large amount of money, you're dealing with a cybersquatter.

When you do face a cybersquatter, buying the domain from the individual is sometimes the best choice. Buying the domain is often cheaper than filing a lawsuit.

How to Fight Cybersquatting

The best way to fight cybersquatting is to prevent yourself from becoming a target. Register your domain name as soon as you decide on a trademark. If the domain name is already taken, consider a different trademark.

If you're dealing with a cybersquatter, you have two options to fight the cybersquatter:

UDNDRP mediation is often the better choice. Mediation is cheaper and faster than a lawsuit. You don't need a lawyer for mediation, but it's a good idea to talk to a lawyer before filing a dispute.

Fighting Cybersquatters Through UDNDRP

The Internet Corporation of Assigned Name and Numbers (ICANN) manages the internet domain name system. ICANN developed the Uniform Domain Name Dispute Resolution Policy in 1999. The UDNDRP sets standards for domain dispute resolution.

You can resolve a dispute with UDNDRP if:

  • A domain name is the same as or very close to a trademark you own.

  • The domain owner has no rights to or interests in the domain name.

  • The domain name is used in bad faith.

Most UDNDRP disputes are heard by two agencies:

  • National Arbitration Forum. The NAF provides arbitration services for businesses. Arbitration is when an outside individual or business resolves a dispute.

  • World Intellectual Property Forum. WIPO is a United Nations agency promoting intellectual property rights.

If the UDNDRP process rules in your favor, you can transfer or cancel the domain name. UDNDRP rulings don't award damages.

Fighting Cybersquatters Through ACPA

The ACPA lets you sue for rights to a domain name. ACPA suits are handled in federal court. You can cancel or transfer a domain name if you win an ACPA suit. Statutory damages, which can range from $1,000 to $100,000 per domain name, may be awarded.

To win an ACPA suit, you must prove:

  • The domain is used in bad faith with an intent to profit.

  • The trademark existed when the owner bought the domain.

  • The domain name is the same as or very close to the trademark.

  • The trademark falls under federal protection.

One difficulty of ACPA suits is that cybersquatters might live outside the United States. Courts can try ACPA suits in rem jurisdiction for foreign cybersquatters. In rem means that a court can rule on property within its territory even if the owner is outside of it. In some cases, a trademark owner can file for legal action against the domain itself through in rem jurisdiction.

To sue in rem:

  • The domain must be registered with a U.S. company. Companies that offer domain registration services are called registrars. You can only sue in rem if the registrar is a U.S. company.
  • Notify the cybersquatter of your plan to sue. Notice can be given by mail or email.
  • Wait a reasonable period of time after you give notice. The court determines the amount of time needed. If a cybersquatter moves the domain to a foreign registrar during this period, you can no longer sue. Moving a domain to a foreign registrar means the property is no longer in the territory of U.S. courts.
  • Lock down the domain name. Locking down a domain means preventing transfer of the domain to a foreign registrar. You can't lock down a domain until after the reasonable time requirement. To lock down a domain, send a copy of the lawsuit to the domain registrar and request that the registrar lock the domain.

You should talk to an attorney before filing an ACPA lawsuit.

Proving Bad Faith

The hardest part of fighting a cybersquatter is proving bad faith. Bad faith requires an intent to mislead. This requirement protects people who innocently buy trademarked domain names.

For example, when the British Broadcasting Corp. (BBC) challenged the owner of BBC.org in 1999, the media organization lost because the domain was legitimately owned by the Big Blue & Cousins group, a Canadian computer club. The club owned the domain since 1994. Conversely, in 2000 when the BBC filed a complaint against a cybersquatter who was selling bbc1.com and bbc2.com, the names of two of BBC's channels, the court ruled that the cybersquatter should release control on the domains and cover the BBC's legal costs.

Another case involved the Boston Business Computing company's purchase of a BBC.com domain. The BBC argued it paid $375,000 for BBC.com and didn't want its brand name used by any company on a .com domain name. Boston Business Computing stated it wasn't trying to infringe on the BBC's trademark, but asked for compensation for its costs connected with moving their website to bosbc.com to avoid confusion.

Bad faith requirements also protect the free speech of people who buy domains to complain about companies. These are known as "gripe sites." Gripe sites are legal if they don't break defamation or libel laws and are not used for profit. However, posting negative material so that someone will buy the domain for a profit is illegal.

Courts look at nine factors to tell if a domain owner is acting in bad faith. Courts check if the domain:

  • Contains the owner's trademark or other intellectual property.

  • Contains the owner's name.

  • Provides goods or services.

  • Is used for lawful noncommercial purposes.

  • Confuses consumers with the intent to profit or defame.

  • Is offered for sale to gain profit.

  • Is registered under false information.

  • Is one of several misleading or trademarked domains bought by the owner.

  • Contains a unique trademark.

Intent of bad faith is hard to prove. Talk to a trademark lawyer for help understanding bad faith requirements.

Frequently Asked Questions

  • Where does the word cybersquatting come from?

Cybersquatting comes from the word "squatting." Squatting is illegally occupying a property. Cybersquatting is unlawfully owning web property.

Unlike regular squatters, cybersquatters pay fees for their domains. It's how they use the domains that is illegal.

Typosquatting is a kind of cybersquatting. Typosquatting is buying a domain name that is very close to a popular trademark. For example, faecbook.com is typosquatting Facebook.com.

  • Can individuals file against cybersquatters?

Domain disputes aren't limited to businesses. Celebrities and other people can dispute a domain if they can prove bad faith. Celebrities are also protected through right of publicity laws. These laws make profiting from a celebrity's name illegal. Celebrities can also claim common law trademarks of their name. However, a name may be legal to use if it's not for profit or in bad faith.

  • Can cybersquatting ever be legal?

Cybersquatting isn't legal. However, there's a similar practice called domain tasting. Domain tasting is buying expired domains to test their value. Domain tasting is legal if there's no plan to sell the domain for profit.

Protecting your business against cybersquatting isn't easy. For help identifying and fighting cybersquatters, post your question to a trademark attorney using UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies such as Google, Menlo Ventures, and Airbnb.