Intellectual Property Law: A Better Solution for Stopping “Cybersquatters”

Perhaps the best space a business can own is not a physical space at all, but space on the internet, which usually means registering and owning a domain name.   A domain name is like home-sweet-home to a business and is often a target for trademark infringement.   Unscrupulous individuals, and sometimes even business competitors, may attempt to capitalize on your company’s trademarks through improper domain name registrations.  This practice is known as “cybersquatting” – and it is illegal.   

This article explains a cost-effective and relatively quick way for business owners who have been harmed by a cybersquatter, to stop the harm and even obtain ownership of wrongfully registered domain.

Cybersquatting is the registering, selling or using of a domain name with the intent of profiting from the goodwill of someone else’s trademark.  The practice was rampant in the early days of the internet.  During this time many companies had yet to develop an online presence; when they went to do so they discovered that all of the possible domain names had been taken.   But cybersquatting continues today.

Often cybersquatters have no intention of constructing a website.  They simply hold a domain name hostage by registering hundreds of possible combinations with the hope of selling the rights to a single domain name back to the business who needs it. 

Over the years, countless companies have fallen victim to cybersquatting.  Well known companies such as Panasonic, Hertz and Avon were among the first.    Celebrities are also prime cybersquatter targets because the thought of having their own personal “.com” usually doesn’t cross their mind until they have already gathered substantial fame.  Small and medium-sized businesses and business owners are the most common victims.   Although cybersquatting victims have the right to sue in court, that can be expensive and time-consuming, and courts often take a year or longer to finally render a judgment.  In order to sue in court, a plaintiff also has to find and serve the Cybersquatter with the lawsuit, which is often impossible or impractical because cybersquatters are usually residents of foreign countries and are good at hiding their true identities.

Thankfully, business owners do not also have to turn to courts to stop cybersquatters.  There is a much faster and less expensive process that also does not require the business owner to find and serve the cybersquatter, which is to initiate a proceeding pursuant to The Uniform Domain Name Dispute Resolution Policy (UDRP).  The UDRP is international policy created by the Internet Corporation of Assigned Names and Numbers (ICANN) as an alternative to filing a lawsuit against cybersquatters.  Every individual who has registered or owns a domain name had to agree to be subject to this policy and to the UDRP process.    

The purpose of a UDRP action is for a trademark owner to secure the transfer of a cybersquatter’s domain name(s).  In order to win, the trademark owner must prove that the domain name at issue is identical or very similar, is being used in bad faith, and that the cybersquatter has no real interest in it.   A UDRP does not require live testimony. 

A possible downside to a UDRP is that it does not provide for the award of any monetary damages.  Then again, most cybersquatters are very difficult to find and are in foreign countries, which would make any damages award nearly impossible to collect.

Bowie & Jensen has represented dozens of businesses and their owners in the UDRP process, and has successfully secured the transfer of domains from cybserquatters to the rightful business owners. 

For more information on cybersquatting and the UDRP process, including the cost, please contact intellectual property attorney,  Joshua Glikin.