Cybersquatting might sound like a tech buzzword. However, for businesses and individuals, this is a real legal issue with tangible consequences.
Cybersquatting happens when someone registers, uses, or sells a domain name that’s identical or confusingly similar to a trademark or personal name. Many times, this is done to profit from someone else’s established reputation.
But what qualifies as cybersquatting under U.S. law? We will look at what this means for your business and what you can do to protect yourself.
The Domain Name Must Be Identical or Confusingly Similar
Under the Anti-Cybersquatting Consumer Protection Act (ACPA), trademark owners have a way to take action against bad actors. The first step is looking at whether the domain name resembles your trademark or personal name.
Exact matches are not necessary. Slight variations, misspellings, added words, or hyphens can qualify if they can confuse the public. Courts will consider whether the average internet user might be misled.
There Must Be Bad-Faith Intent to Profit
Not every overlapping domain is considered cybersquatting. The main factor is intent. Under the ACPA, a court will look for evidence that the registrant acted in bad faith to profit from your established business or reputation. Some common examples include:
- Attempting to sell the domain back to the trademark owner or a competitor at an inflated price.
- Redirecting web traffic to a competitor’s website or another commercial site.
- Registering multiple domains that match well-known trademarks.
- Using the domain to tarnish or damage the reputation of the trademark owner.
However, registering a domain name for legitimate purposes does not constitute cybersquatting. It is the intent to profit from another party’s trademark that is the main differentiator.
The Trademark Must Be Distinctive or Established
For a cybersquatting claim to succeed, the trademark or name must be distinctive or already established at the time the domain was registered. This protects individuals who may have registered a domain before a brand gained recognition.
Timing matters. The trademark must exist and be sufficiently recognized for a bad-faith claim to hold.
Trafficking in Domain Names Can Also Be Cybersquatting
Someone does not have to build a website to be guilty of cybersquatting. Buying and selling domains that mirror established trademarks with the intent to profit can meet the legal definition. Even sitting on a domain without using it but intending to sell it at a premium can qualify as cybersquatting under the law.
Additional Considerations
Courts look at several factors to assess whether a domain was registered in bad faith, including:
- Whether the registrant has a history of registering domains similar to existing trademarks.
- Whether they have legitimate interests in the name, such as personal names, commonly used phrases, or previously held trademarks.
- Whether the domain is being used for legitimate noncommercial purposes, like commentary or fan pages.
No single factor guarantees a finding of cybersquatting. Instead, courts consider the overall context and the registrant’s behavior.
Why Cybersquatting Can Hurt Your Business
Your domain name is often the first impression potential customers have of your business online. Losing control of it, or having someone exploit it for profit, can affect both your reputation and your bottom line.
This is why many businesses take proactive steps to prevent domain disputes. They may register multiple domain variations and closely monitor domain activity to protect their brands.
If you discover a domain that infringes on your trademark, legal options are available under the ACPA. However, you want to act quickly. This allows you to prevent consumer confusion, preserve your reputation, and regain control of valuable online property.
In many cases, disputes can be resolved through negotiation. Keep in mind that in some situations, litigation or arbitration may be necessary.
Protect Your Digital Identity
Now that you know what qualifies as cybersquatting under U.S. law, you can protect your online presence.
You have the right to protect your business, and Iconic Inc. can help you do so. Reach out to us today to learn your options and keep your brand or business safeguarded from bad digital actors. Schedule a consultation today.