What Is Cybersquatting?

Cybersquatting examples show Cybersquatting (a.k.a. domain squatting) is the act of registering, trafficking in or using a domain name in bad faith. Cybersquatters neglect the existence of a trademark to profit from others. In fact, domain names are cheap and are sold on a "first come, first served" basis. 

As the internet started becoming popular, internet users knew businesses would need a website. Some users started buying domains to create sites that looked like they were from reputable companies.

Example: A cybersquatter could buy Heinz.com if the company hadn't created a website yet, looking to sell the domain to Heinz at a later date for profit, or use the domain name to attract traffic and generate money through advertising.

If a business has a good reputation but no website, the company either pays the owner of the domain name to transfer the domain or contacts a trademark attorney to start a lawsuit.

The second way is time- and cost-intensive, so trying to buy the domain directly from the cybersquatter is usually the preferred method. Today, opportunities for cybersquatters aren't as common since most businesses make the purchasing of their domain a high priority, especially if they have a strong trademark.

Understanding the Difference Between Cybersquatting, Typosquatting, and Gripe Sites

There are a few ways that cybersquatters can try to profit from companies on the web.

Typosquatting

Making a typographical error (typo) is a daily occurrence for most internet users, with some typos that are very common. Typosquatters will buy domains with a typo in them (example: linkdin.com rather than linkedin.com) and create a phishing site. The intent is always harmful, looking to skim users who make a typo.

A few years ago, a Russian man created the websites googkle.com and ghoogle.com to insert malware on user machines. Google won the rights back to the domains in 2005.

Gripe sites

A gripe site is created to critique or mock people, places, politicians, corporations, or institutions.

Gripe sites can also be used for goodwill such as arguing against unpopular claims and in fact, gripe sites aren't always illegal. Jerry Falwell, a pastor, wanted to take offline fallwell.com as the website was used to contradict his homophobic claims. He was unsuccessful: the courts deemed indeed that there was no commercial aspect to fallwell.com (no bad faith intent to profit), so the owner wasn't infringing any trademarks.

Another gripe site case is the one involving careeragentsnetwork.biz that an unhappy customer of careeragentsnetwork.com set up. The website wasn't commercial and simply warned others to avoid Career Agents Network; therefore, the website's owner won the lawsuit.

The case delivered two interesting insights:

  • In the case of gripe sites, freedom of speech is still valid.
  • People can sometimes legally use a trademark in a domain name.

The trademark holder loses in the majority of these cases unless the site is insulting, in which case a defamation case could succeed in court.

Cybersquatting

Cybersquatting differs from the above two instances in that web users look forward to profiting from companies who have yet to register a domain (or a domain that fits their brand). Cybersquatters plan to profit directly from the company at a later date for just registering the domain name.

How To Handle Cybersquatting

Cybersquatters usually act in bad faith, but not always, and sometimes it's tricky to work out what the cybersquatting intentions are.

Understand if it's a case of cybersquatting

A website is usually a case of cybersquatting when URLs are leading to a parked website or sites under construction or have clear 'site for sale' landing pages. These cases are not "real websites," so the URL owner might be waiting for you to buy it back at a higher price.

In other cases, there could be a perfectly plausible reason for the site to not be a real site yet, with a planned launch in the future. If the domain is a working website full of ads related to a trademark, this is another case of possible cybersquatting. On the contrary, if the website looks like a working website and the domain name fits the theme of the website with products or services not competing with the trademark, this likely isn't cybersquatting.

Example: The trademark "Moby Dick" relates to fine art dealing. The website www.mobydick.com relates to road cleaning machines. There is no competition between the products, so this isn't cybersquatting. However, in some situations, there might be a case of trademark infringement.

Taking action

Making assumptions of cybersquatting can be risky. The first thing to do is contact the domain name holder via a "WHOIS Lookup." The owner's contact details will be there, and you can find out if they have an explanation or they may be willing to negotiate the sale of the domain at a price you consider reasonable.

What You Can Legally Do

The Anticybersquatting Consumer Protection Act (ACPA) prohibits cybersquatting. If you can't reach an agreement for the sale of the domain with the squatter, you can contact lawyers to start a case file. Legal proceedings can be long and expensive. For that reason, many companies choose to make an agreement directly with the domain owner who has the upper hand in negotiations.

A cybersquatting victim in the U.S can either sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA) or use the Internet Corporation of Assigned Names and Numbers (ICANN), which is an arbitration system. The ICANN procedure doesn't require an attorney, so it's faster and cheaper than using the ACPA.

How To Use the ICANN Procedure

The ICANN procedure solves disputes via arbitration rather than litigation. Someone can take action if the complainant believes these three elements are valid:

1. A URL is the same, or similar enough to confuse a trademark which the complainant has rights to

2. The cybersquatter purchased the URL with no legitimate interest in the domain

3. The domain is registered and used in bad faith

If the accuser wins, the domain is either canceled or transferred to him. No monetary compensation is involved. To file a complaint, take a look at the ICANN website.

How to File A Lawsuit Under the ACPA

The owner of a trademark can sue who they believe is a cybersquatter in federal court with the Anticybersquatting Consumer Protection Act (ACPA) under the Lanham Act. The court can order the cybersquatter to transfer the domain to the trademark owner, and possibly to pay him/her money for damages.

In order to determine if the website's owner is guilty of cybersquatting, the courts need to consider various nonexclusive factors:

  • If trademark rights are present in the domain name
  • If the domain name refers to the legal name or nickname of the website's owner
  • If the owner of the website has previously used the domain name in bona fide to sell goods or services
  • If the owner is using the mark in a bona fide noncommercial or fair way
  • If the owner has the intent to divert customers from the mark owner's site to their own, to make money or harm the mark in any way by creating confusion among the customer
  • If the website's owner has tried to sell the domain to the mark's owner without having any intent to use the mark to sell goods
  • If the owner has bought more than one domain name that is similar to other registered marks, often famous
  • If the owner has given false information when registering the domain name or if he tried to hide his contact information later on

The State of California has also passed the California Political Cyberfraud Abatement Act (CPCAA) which prohibits certain behaviors in bad faith regarding political websites. Precisely, the act prohibits the creation websites where the owner pretends to be someone else and prohibits any conduct that denies access to political websites. Political campaigns and politicians aren't often treated as trademarks, but the names of the most famous one such as Obama are granted trademark protection.

When Does A Case Win?

Given the different scenarios that come to light, brands or celebrities may or may not have a reasonable claim to win the rights to a domain name. With so many gray areas, we can narrow each case down to these two points to determine the chance of success:

  • If a trademark is in place prior to a squatter buying a domain, the case is straightforward. The trademark owner can prove the infringement through the courts (expensive) or the cheaper relevant domain name dispute resolution policy (UDRP) route. WIPO is a popular UDRP provider.

  • If a trademark isn't in place when the squatter buys the domain, things get tricky. The trademark can be either registered or unregistered. The latter case often involves celebrities when their names become distinctive worldwide. In court proceedings, it doesn't matter when the trademark was registered. Going with the cheaper UDRP option, the domain needs to be registered after the trademark is issued.

Example: Wayne Rooney was successful in getting the WayneRooney.com domain via the UDRP, even though the domain was registered prior to the trademark. The WIPO, in this case, stated that the name "Wayne Rooney" was an unregistered trademark because at the time he was already a famous person. The case had many variables, but this demonstrates the gray area complicating these cases every year.

Ultimately, determining the goal of the accused cybersquatter when buying a domain name usually determines the result.

Examples of Celebrities vs. Cybersquatters

Tom Cruise

Tom Cruise went to the WIPO in 2006 with his case against Jeff Burgar who had owned the domain TomCruise.com for over 10 years. The domain redirected users to his site Celebrity1000.com, which earns money with third party advertisements.

Jeff Burgar was known as a notorious cybersquatter and had frequent dealings with the WIPO. Previous cases in front of the WIPO involving Burgar included CelineDion.com, KevinSpacey.com, and JeffreyArcher.com, to name a few. In this case, Tom Cruise was successful in having the domain transferred to him, though the cases put forward by each party are interesting.

The lawyers for Tom Cruise based their case on three points:

  • Cruise had "common law trademark and service mark rights" to his name, Tom Cruise.

  • Burgar made money from the domain via third-party ads.

  • Internet users probably thought Tom Cruise was personally affiliated with Celebrity1000.com.

Jeff Burgar counter argued with the following:

  • Celebrity1000 was a fansite with the actor's biography emphasizing this aspect.

  • Burgar's use of the domain should be protected under the right to free speech.

  • When people typed in www.tomcruise.com, they didn't expect to see the actor endorsing the website. They wanted information about the actor, which Celebrity1000.com provided on the redirected URL.

  • Cruise hadn't taken action for 10 years (the domain was first registered in 1996), so Cruise essentially implicitly agreed to let Burgar own the domain name.

Donald Trump

The TRUMP trademark is a distinct trademark owned by Donald Trump. He claimed that trademark laws were broken when the company "Web-adivso" registered TrumpIndia, TrumpBeijing, TrumpAbuDhabi, and TrumpMumbai.

The websites were registered in 2007, the same year the Trump organization announced plans to build TRUMP branded hotels in Bangalore and Mumbai, India. The websites parodied Donald Trump, and their content was related to his shows, "The Apprentice" and "The Celebrity Apprentice."

In late 2010, Trump's lawyers requested the company remove the websites and pay $100,000 in compensation for each of the four domains because these were damaging Trump's reputation. When Webadivso refused to let go of the domains and to pay the damages, the two parties went in front of a WIPO panel.

Trump's lawyers were able to prove their case, and the courts ordered Webadviso to pay $32,000 in compensation, in addition to the transferring of the four domains to Trump.

The domains were not identical, but confusingly similar because the two words trump + location is a common method for hotels to label websites. In this case, the addition of a generic location added distinctiveness to the trademark since Trump is a real estate magnate.

Given the timing of the domain names' registration in 2007 after the announcement of the new hotels in India, the respondent knew they were going to use the TRUMP brand name, and therefore had no legitimate interest in the sites. The respondent acted in bad faith and took advantage of the opportunity with the goal to profit.

Other High Profile Cases Involving Celebrities

Jennifer Lopez filed a successful lawsuit in 2009 when a website posted indecent photos, videos and fake news about her on JenniferLopez.biz (and .org), with the intent to profit from the sites. The sites were mentioned to be fan sites, but the affiliate links led to a profit motivation.

When Paris Hilton registered parishilton.com, she soon found out that there were numerous websites already using her name. Paris.org was a site made by a cybersquatter, who was making a nice living by posting pictures and videos of the star. Even smaller sites such as parishiltonsunglasses.com are clearly cybersquatting.

Madonna is a highly searched name on the internet, and the queen of pop discovered that the website madonna.com was hosting objectionable images of her. The website sold related adult content on the web thanks to the name, so they didn't have much of a case with the WIPO proceedings.

Examples of Companies Vs. Cybersquatters

Large companies like BBC News, Dell, and eBay, have often had to fight cybersquatters who had registered domains that broke trademark laws. However, some cases caused the companies bad publicity when they went on with the proceedings, as Microsoft found out with the MikeRoweSoft.com case.

Teenager Mike Rowe thought he was clever registering MikeRoweSoft.com. It didn't take long before Rowe received a letter requesting the transferring of the domain to Microsoft with $10 on offer to cover the cost of the domain registration. Mike hit back with a $10,000 compensation request, which led to Microsoft accusing Rowe of being a cybersquatter.

When the WIPO issued a cease and desist order to Rowe, Microsoft received negative publicity and eventually settled out of court with the teenager. Microsoft might have been too aggressive in defending their trademark, but this was a tricky situation. If they didn't pursue this case, their trademark would be weakened in future infringement cases and could have set a precedent in the future.

New Opportunities for Cybersquatters

Cybersquatters are less and less using .com domains, but there are new opportunities for them, thanks to 1000+ new, generic top-level domains (GTLD's). It's now possible to register domains such as adidas.clothing, like Australian Venura de Zoysa did six days after the .clothing GTLD was released. It didn't take long for Burberry.clothing and Tommyhilfiger.clothing to get snapped up either.

With so many GTLD domains, brand owners face extraordinary costs to keep cybersquatters at bay. Companies can buy the domains back on a case by case basis, but it's expensive. Instead, the Uniform Rapid Suspension System allows trademark owners to potentially stop cybersquatters by filing a complaint within 24 hours, which costs $200 + legal fees. This adds up quick when a company has several trademarks given the number of GTLD's.

Cybersquatting is a real problem for celebrities and companies, as the examples show. Companies need to keep an eye out for squatters in order to protect their trademarks.

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