BY Daniela Stolfi-Tow – Cybersquatting is the practice of buying up domain names for profit from a trademarked name. So someone with intentions to profit, buys up the domain address containing your Trademark and wants YOU to pay a premium price to get back what is legally yours.
The Lanham Act, the federal trademark statute, and the case law interpreting it, place a duty on mark owners to take appropriate action to protect their marks when they discover infringement.
It is possible for a mark owner to lose rights in a mark permanently if the mark owner does not take necessary protective action to prevent infringement and improper use of the mark.
Thankfully, this is now prohibited under the Anticybersquatting Consumer Protection Act as well as a set of international guidelines called the Uniform Domain-Name Dispute-Resolution Policy created to protect companies, celebrities, and regular Trademark owners from having their names exploited for commercial purposes.
But it doesn’t stop people from trying.
Labeled “the scum of the earth” online, most cybersquatters are self-proclaimed “entrepreneurs” who try to make quick money extorting money from businesses by buying a $10 domain and attempting to sell it at a premium price. Most know the laws, but are banking you don’t. If they get a cease and desist, they will usually just give up and go on to the next victim.
Mostly they snatch up new domains before the owners do, but the real money is in expired domains. There are websites that allow domain brokers to monitor expired domain names in real time. Brokers look for popular or valuable domains that have been up for a while, have backlinks and high pagerank and then buy them.
Clients have said to me “But I am nobody, my business is small, is it even worth it?”
WELL YES, Think about it! If you had a website up for 5 years and all your marketing and collateral and history online had that domain name. How much time and money is it going to cost you to change all that? A lot! And they know you will be willing to pay to get it back. They paid $10. Even if you pay $300 its a win for them.
Most of these guys know it is illegal and are careful about how they go about the extortion process and will quickly comply to cease and desist letters to avoid legal action.
Then there are some who just don’t know it is illegal. I was surprised to see Mayor Caldwell on the news warning people about someone who had bought up a number of domains relating to Honolulu Rail Transit, and had set up websites with rail information. This person not only contacted them about purchasing the domains, but admitted it to reporters and has it listed on their site, that they were an “entrepreneur” who bought them with the intention of selling them.
I actually tried to do a good deed and warn the guy because I assumed he was some clueless guy who thought he was on to something based on how careless he was. But based on the this response he is either a cybersquatter or a clueless jerk or both.
Either way I expect his domain squatting business will be over very soon.