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What is Cyber Squatting?

Updated: May 8

It takes a lot of time and money to build a business from the ground up. Coming up with a catchy yet meaningful business name, getting a logo designed, creating your first branded products or services — there's a lot that needs to be done before you can officially launch!

There's one aspect of your business's brand you might not think of until it's too late: your website's domain name.

Why should you be worried about this? There's a tactic called cybersquatting that could affect your ability to register your business's domain name. (Well, at least for a decent price.) Here's what cybersquatting is and how you can protect yourself from it.

What is Cybersquatting?

Cybersquatting is the unethical and unlawful practice of buying a domain name with the intent of profiting from someone else’s trademark.

Cybersquatting occurs when some purchases a domain similar to an established registered trademark with ill intent to capitalize on that purchase. If someone purchases a domain not realizing it's similar to a registered trademark and is willing to sell it back at a reasonable price when approached about it, that may not constitute cybersquatting.

The main difference here is the intent: does the domain purchaser have any intent to use the domain themselves? Did they only purchase it because it's similar to an established business name or product?

Cybersquatting Example

Here’s an example: Let’s say an ecommerce store sells hunting gear — the business is called Longhorn Clothing Company and they have a federal trademark.

Business is growing and they are looking to expand. They currently own the web address but they’ve caught wind that people are starting to search for “Longhorn Apparel” so they want to purchase the domain

When trying to buy the name, the Longhorn owners notice someone already owns the site.

Now, what happened was, a cyber squatter noticed the growth of Longhorn Clothing Company and had the foresight that customers were eventually going to incorrectly search for Longhorn “Apparel” rather than Longhorn Clothing. They purchased the address for a nominal fee in the hopes of reselling it to Longhorn Clothing for a small fortune.

The owner of Longhorn Clothing has a couple options: pay what the cyber squatter is asking, or file a claim against the Cyber Squatter under the Anti-cybersquatting Consumer Protection Act.

Is Cybersquatting Illegal?

Yes, cybersquatting is against federal law, as established in the Anti-cybersquatting Consumer Protection Act (ACPA). This act prohibits domain squatters from using an internet domain name with bad faith and intent to profit off of an established trademark.

How to Prevent Cybersquatting

If you have a federal trademark and are the victim of a cyber squatter, you do have rights.

It's difficult to foresee all of the different domain name variations your business might need in the future, and it's easier than you might think to fall victim to cybersquatters. Luckily, there are legal avenues designed to help you!

The ACPA allows federally-registered trademark owners to sue expected cybersquatters in federal court and attempt to obtain the domain. This does require proof that the cybersquatter didn't have any reason to purchase the domain in the first place. If they're able to prove there was some reason, it might be difficult to get the domain back.

Need Help with Cybersquatters?

It's best to enlist the help of an experienced attorney if you're dealing with issues related to cybersquatters. Contact us today to learn more about how we can help!

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