Cybersquatting

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Cybersquatting

The rise of the internet created new ways for infringing intellectual property rights and chief among them is cybersquatting.

What is Cybersquatting?

Cybersquatting is a type of domain name trademark infringement involving the bad faith registration of internet domain names. Individuals involved in this act will register, sell or use a website domain that inappropriately incorporates a protected trademark or service mark. The intent of undertaking this action is to profit from an established brand’s goodwill among consumers.

The cybersquatter can engage in a variety of bad faith actions. These could include anything from selling similar items on the infringing website to offering the owner the chance of purchasing the domain at an inflated price. Courts and international organizations will consider a variety of elements to decide whether bad faith actions have occurred. These factors include the following:

  • Does the domain name fall under the alleged cybersquatter’s intellectual property rights?
  • Does the domain name fall under fair use or have a noncommercial use?
  • Did the cybersquatter attempt to sell the domain name without prior good faith intent?
  • Was there intent to dilute or harm a registered trademark?
  • Did the alleged cybersquatter use intentionally misleading contact information?

These issues are some of the more common in considering whether cybersquatting has occurred, but courts and international organizations can consider many other elements. One of the most important, however, is whether the trademark in question has been registered with the U.S. Patent and Trademark Office (USPTO).

The USPTO now issues over 270,000 registrations yearly. Each of these brand identifiers garners federal protection from cybersquatting, and registration also serves as a basis for proving ownership to international intellectual property organizations. While common law trademarks do offer some level of protection, failing to register can reduce your avenues of recourse.

Cybersquatting Definition

The definition of cybersquatting puts it under the umbrella of trademark infringement. There are some distinct differences, however, between the two. Not every instance of digital infringement, for instance, constitutes cybersquatting. One example is when improper listing practices are used on Amazon. Although infringement has occurred, there was no bad faith registration of a domain name.

As social media became popular, the scope of cybersquatting laws extended to social platforms. In these situations, it can be difficult to differentiate between traditional trademark infringement and cybersquatting. For example, using a branded name to increase search results for another product would be traditional infringement. Pretending to be or represent a brand, however, is cybersquatting.

Anticybersquatting Consumer Protection Act

Prior to 1999, the Federal Trademark Dilution Act (FTDA) was the main avenue for responding to cybersquatting. This changed after the passage of the Anticybersquatting Consumer Protection Act (ACPA). The statute created a cause of action against cybersquatters that allows trademark owners to gain ownership of a domain and potentially receive monetary damages.

Often these types of cases are handled through the Internet Corporation for Assigned Names and Numbers (ICANN).   To sue under the ACPA, plaintiffs must prove the following:

  • The alleged cybersquatter intended to profit from bad faith registration.
  • Defendant registered, used or trafficked in a domain name that is either…
    • Confusingly similar or identical to an existing distinctive identifier.
    • Confusingly similar, identical or dilutive of a famous identifier.
    • The trademark belongs to specific organizations mentioned under U.S. Codes 18 and 36.

If these issues are proven in federal court, plaintiffs may receive injunctive relief, attorney’s fees and damages that range from $1,000 to $100,000 per domain name.  Website owners have many of the same defenses granted to other accused infringers. If someone registered the domain KodakComplaints.com and shared negative reviews of KODAK® products, for instance, they would meet both of the first two prongs. Since their intent is to critique rather than profit, though, they are not likely to be considered guilty of cybersquatting.

Cybersquatting Examples

Below are a few cybersquatting examples.

Typosquatting

More often referred to as a “fake URL,” typosquatting takes advantage of typing errors that consumers make while trying to visit websites. This often includes common misspellings of trademarked properties or typos.

Infringers who utilize this tactic will often create a fake website to accompany the domain address. This can trick consumers as to the source of products they’re purchasing. Cybersquatters may also utilize varying top-level domains in order to compel trademark owners to buy the website.

Examples:

  • Registering starbucks.org if it hadn’t been registered by the trademark owner.
  • Attempting to sell any top-level domain featuring “starbucks” after having no intent to legitimately use the website.
  • Registering potential misspellings or typos for starbucks.
  • Linking starbukcs.io to a website that sells competing coffee products.

Name Jacking

Personal names can be trademarked in the United States under certain circumstances. This typically only occurs if they’ve established secondary meaning in the market (e.g. Madonna, Beyoncé). Name jacking is a complex area of the law, so it may not always fall under the Anticybersquatting Consumer Protection Act.

Name jacking can also occur on social media. Even in the absence of a registered domain name, creating a profile representative of a celebrity or famous individual could constitute cybersquatting. This is another murky area considering the number of fan sites currently in existence. If the page starts selling unlicensed merchandise, it may be considered evidence of cybersquatting.

Filing Cybersquatting Lawsuits

Before opting for trademark litigation in relation to cybersquatting, a typical first step is to send a cease and desist letter. This is your opportunity to notify the infringer that their actions are violating your rights and that they’ll likely be held liable in a court of law.

Make sure to include the following information:

  • All contact information from IP owner and domain registrant.
  • Demand that cybersquatting end and website be transferred.
  • Demand that no further cybersquatting activities take place.
  • Proof that the sender has exclusive rights to the trademark in question.
  • Explanation of further legal action that may take place.
  • Deadline for a reply (usually 10 days).

If the infringing behavior doesn’t cease after this point, filing trademark litigation under the Anticybersquatting Consumer Protection Act may be appropriate. Doing so will often result in the cybersquatter looking to immediately settle the case or refusing to fight back in court at all which would lead to a default judgment.

You also have the option of utilizing ICANN’s Uniform Domain Name Dispute Resolution Policy to file a UDRP Complaint. This administrative proceeding is often faster and less expensive than ACPA litigation. Plaintiffs are typically successful, and cybersquatters are often ordered to cancel or transfer domain ownership. Unfortunately, UDRP complaints do not lead to financial compensation so the only award is transfer of the domain name.

Cybersquatting Cases

Many companies experienced cybersquatting in the early days of the internet. This is because forward-thinking cybersquatters would often purchase domain names before corporations even realized they should by them. Even with knowledge of this importance increasing, though, we’re still seeing more cases of cybersquatting. Around 3,500 are filed yearly with WIPO alone.

The following famous cybersquatting cases had huge effects on intellectual property rights.

Nissan Motors v. Nissan Computer

Most people immediately think of cars when they hear the name Nissan, and this is understandable since the company has used the label since the 1970s. In 1994, however, nissan.com was registered for Nissan Computer Corporation. This was five years before the automobile company decided they wanted the domain.

Nissan Motors claimed that the domain name constituted trademark dilution, infringement and cybersquatting. This would typically be a valid claim, but the owner of the domain and corporation is named Uzi Nissan. Uzi’s companies are simply titled after his surname, so cybersquatting did not occur. Nissan Motors ended up registering a different domain for their company.

PETA vs Doughney

People for the Ethical Treatment of Animals (PETA) has existed since 1980. In 1995, Michael Doughney registered the domain peta.org and titled it “People Eating Tasty Animals.” PETA attempted to get Doughney to transfer the domain name willingly, and when he refused to do so, they sued him for trademark infringement, cybersquatting and dilution.

The website’s content proved without a doubt that it was a parody page, but the court ruled that this wasn’t conveyed in the domain name itself. Doughney also wasn’t facing accusations of cybersquatting until he made statements implying that PETA should pay him money to transfer the domain. Doughney had to surrender the domain, but due to a lack of malicious intent, he wasn’t ordered to pay damages.

Later courts have decided that a website’s content should be considered in addition to the domain name.

Microsoft v. MikeRoweSoft

In 2003, Mike Rowe set up MikeRoweSoft.com to promote his web design services. He did so because of the phonetic pun that sounded like ‘Microsoft.’ Since the domain could be phonetically confused with Microsoft.com, though, the larger corporation requested that he transfer the domain name. They offered him $10 for the price of the original registration.

When Rowe demanded $10,000 for the domain, Microsoft sent a cease and desist letter accusing him of cybersquatting. After massive public backlash against the company, a settlement was reached outside of court.

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