Have you ever noticed that when a person or business name becomes popular or well-known, there’s often an unrelated third party prepared to park or register website domains in the name of that person or business? In many such cases, the third party’s objective involves making an easy profit by holding the domains “hostage” until the rightful owner of the name or mark is willing to pay a premium for the domains. This is called cybersquatting and it is illegal.
How do you recognize a domain which has been purchased with cybersquatting in mind? Most domains which have been purchased as a result of cybersquatting do not involve an active website. Instead, if a user clicks on the domain name, they will be directed to a holding site where the domain name can be purchased, or to a site that is currently under construction. In other cases, the domain may lead to advertisements for competing businesses.
Remedies for Cybersquatting
There are typically two options for taking action against cybersquatters. First, the rightful owner of the name can file a lawsuit against a cybersquatter pursuant to the Anticybersquatting Consumer Protection Act (ACPA), found at 15 U.S.C. § 1125(d). The ACPA is a federal law enacted in 1999 that establishes a cause of action for registering, trafficking in, or using a domain name which is confusingly similar to, or dilutive of, an existing trademark or personal name. This law was designed to thwart cybersquatters who purchase internet domain names containing trademarks or personal names with no intention of creating a legitimate website.
The ACPA allows a trademark owner to bring litigation against an alleged cybersquatter in federal court, and obtain a court order to transfer the domain name to the rightful owner, where cybersquatting is found to exist. The cybersquatter may also be liable for money damages to the true owner of the mark or name. For an owner to prevail in this type of lawsuit, they must establish the following facts, to the satisfaction of the federal court judge or jury:
(1) the cybersquatter had a bad faith intent to profit from the individual or business;
(2) the trademark was distinctive at the time the domain name was registered;
(3) the domain name is identical or confusingly similar to the individual or business’ trademark; and,
(4) the trademark is distinctive and its owner was the first to use the trademark in commerce.
An alternative remedy to the ACPA is the international arbitration system created by the Internet Corporation of Assigned Names and Numbers (ICANN). ICANN allows an action to be brought by any person who alleges the following:
(1) a domain name is identical or confusingly similar to a trademark or service mark in which they have rights;
(2) the domain name owner has no rights or legitimate interests in the domain name; and,
(3) the domain name has been registered and is being used in bad faith.
If these elements are proven, the domain name will be canceled or transferred to the trademark owner. However, financial remedies are not available to the rightful owner of the name or mark through the ICANN process.
There are various advantages and disadvantages to pursuing either of these processes, which should be discussed with an experienced trademark lawyer. Some trademark owners determine it is quicker and less expensive to simply pay the “ransom” demanded by a cybersquatter. Unfortunately, this option serves to promote this illegal conduct and makes it more likely cybersquatting will continue to be a problem for years to come. If you suspect your name or mark has been hijacked by a cybersquatter, contact us today to discuss your options. We offer a free initial evaluation for new clients.