What Does “Cybersquatting” Mean?

Cybersquatting is the practice of registering domain names that represent a celebrity or well-known brand or company name, for the purpose of profit. The term can also be used to refer to social media, when users create and occupy a social media presence that appears to be that of a celebrity or well-known brand.

 

Anticybersquatting Consumer Protection Act

In 1999, Congress enacted the Anticybersquatting Consumer Protection Act (“the ACPA”) to protect trademark owners and the goodwill that belongs to their trademarks. The Act protects trademark owners by providing them with a cause of action against domain registrants who register Internet domain names with trademarks without the intention of actually creating a working website. These so-called “cybersquatters” register Internet domain names to create a profit by selling the registration to the trademark owners or even to third parties.

 

Criteria for Cybersquatting “Cause of Action”

The ACPA lays out the five elements that must be met to state a cause of action for domain name cybersquatting:

  1. there is a valid trademark entitled to protect;
  2. the mark is distinctive or famous;
  3. the defendant’s domain name is identical or confusingly similar to, or dilutive if famous mark;
  4. the defendant used, registered, or trafficked the domain name; and
  5. has a bad faith intent to profit 15 U.S.C. § 1125(d)(1)(A).

“Trafficking” under the ACPA includes, but is not limited to, “sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration” 15 U.S.C. § 1125(d)(1)(E). Intent can frequently be a difficult element for attorneys to argue… However, under the ACPA attorneys merely need to show the phonetic similarity between their clients’ trademarks and the registered domain.

 

Are Domain Name Providers Held Responsible?

The ACPA does not cover contributory liability. That means domain providers such as GoDaddy.com cannot be sued under the ACPA for the registration committed by another. However, many domain providers have enacted take-down policies to aid copyright and trademark owners by quickly submitting a form to alert the hosting site to remove the infringing site.

 

Social Media Cybersquatting

Recently, many celebrities have been utilizing the ACPA to protect their online social media presence. Fake celebrity accounts appear everyday on social media sites like Twitter and Facebook. Consequently, social media sites have implemented policies to curtail cybersquatting. Twitter began to allow famous users to verify their accounts, which puts a check mark on their page to establish the authenticity of the user’s profile. Shortly after, Facebook and Instagram both began implementing verified accounts on their sites.

 

How to Use Cybersquatting Laws to Resolve Your Issue

Companies can easily protect themselves from cybersquatters. When companies get ready to launch a website and have their trademarks and copyrights filed, a simple search can be done to see if the domain name leads them to a website. If the website is not a functioning one, but states “this domain name is for sale,” or “can’t find server” then more than likely it is a cybersquatter looking to profit from the domain name. Another example that could be a cybersquatter is if the website is functional, but only contains advertisements for the same product or service your company provides.

When dealing with cybersquatters, companies have three options:

  1. Pay the fee for the domain name. This is a good choice if it will be cheaper and faster than dealing with litigation.
  2. If companies do not want to give in and pay, they can use a cybersquatting lawyer and sue under the ACPA to obtain a court order to retrieve their trademarked domain name and possibly even money damages.
  3. Companies can use the Internet Corporation of Assigned Names and Numbers system to arbitrate; however, this method cannot provide money damages to the company.