Trademarks & Cyber Squatting
Cyber squatting is the practice of registering a Domain Name which is either a trademark, or resembles one. Most cyber squatters aim to redirect traffic for financial gain, by parking the domain name at a page with lots of pay-per-click advertisements, or by setting up a similar business to the target domain name and feeding of brand recognition.
Reselling the domain to the target company for a large profit is also popular. Illegal phishing sites have also been set up where by duplicate pages of legitimate sites such as bank or credit card companies are created in order to farm the user’s personal details.
Typo squatting is a similar practice to cyber squatting, the typo squatter will register a domain name which is a popular typo of a brand name website, like facebook.com, in the hopes of profiting from visitors mistyping the domain name of their desired destination. Wikipedia has been a victim of typo squatting multiple times, with domains such as “en.wikipedi.org” and “www.wiipedia.org” being registered and used to park ads and display pop-up windows.
Cyber squatting is now illegal under US federal law; an amendment called the Anti cyber squatting Consumer Protection Act was added to the Communications Act in 1999. This amendment makes people who register Domain Names that are trademarks or individual’s names, with the sole intention of profiting from goodwill related to that trademark or person, liable to civil action.
Various large companies who were victims of cyber squatting, including Panasonic and Harrods, have taken advantage of this amendment and had their domain names restored to them; others prefer to skip the litigation and pay up for ownership of the domain. In order for a cyber squatter to be proven guilty, it must be shown that:
• the domain name registrant had a bad-faith intention to profit from the trademark
• the trademark was distinctive at the time the domain name was first registered
• the domain name is identical or confusingly similar to the trademark
• the trademark qualifies for protection under federal trademark law
This strictness of the requirements for the prosecution provides the small domain speculator with a degree of protection from businesses snatching domain names that were registered in good faith, a practice known as reverse domain hijacking. Not all cases are clear cut such as a case of an alleged cyber squatter digging their heels in is that of “Mr. Charbucks”, a site owned by Wolfe’s Borough Coffee. Starbucks claimed, in December 2005, that the Mr. Charbucks site “diluted” their brand, an assertion which Wolfe’s strongly contested. The court decided ultimately that the defendant’s trademarks did not infringe the Starbucks trademark, nor dilute or tarnish the brand. It’s also interesting to note that cyber squatting laws are not infringed if the intention is not to profit from the name. Poking fun is perfectly acceptable, as Verizon Wireless discovered when they tried to invoke the cyber squatting act against the registrant of www.verizonreallysucks.com (one of Verizon’s lawyers having registered www.verizonsucks.com in a backfiring attempt to avert just such a situation). Because hacker ezine 2600 Magazine were not intending to sell on the site or hijack Verizon’s traffic for profit, they were deemed innocent and allowed to keep the name. Incidentally, to prove his point, 2600 editor Emmanuel Goldstein registered VerizonShouldSpendMoreTimeFixingItsNetworkAndLessMoneyOnLawyers.com.
It can be seen that it is worthwhile to be careful of trademark infringements when registering a domain, in order to avoid any possible future legal proceedings.