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Cybersquatting – What is it? – Part 1

posted by: FraudWatch International date: Apr 27, 2016 category: All, Brand Protection comments: 3

It’s easy to think of Domains as something you own; however, this is incorrect, as domains are rarely owned. Therefore, the concept of domains being a tradeable commodity is inherently a flawed one. Most domains are rented temporarily from a central agency, for a few years at a time. This has lead to some unethical behaviour. In this article we wanted to focus on Domain Squatting (Cybersquatting).

What is Domain Squatting (Cybersquatting)?

According to the United States Anti-cybersquatting Consumer Protection Act (ACPA), “Cybersquatting (also known as domain squatting) is registering, trafficking in, or using an Internet domain name with bad faith and the intent to profit from the goodwill of a trademark belonging to someone else.”

The squatter could offer to sell the rights to the domain at an inflated price. It is essentially the online version of occupation without permission or rightful ownership.

However there is still no definitive description of Domain squatting, as each country has their own set of rules and regulations. There are also a number of legitimate reasons why a domain name might be squatted on.

Types of Domain Squatting

Whilst most people immediately think of the criminal aspect of Cybersquatting, there are, in fact several versions of Domain squatting. The main types covered in this article are: Criminal Cybersquatting, Protective Domain squatting and Unintentional Domain squatting.

Criminal Cybersquatting

This is the type of Cybersquatting that everyone knows. A criminal is trying to sell a domain to make money. They will intentionally register domain names purely for the purpose of selling them back to the legitimate Trademark owner and making money from it. For example, let’s say a new movie is about to be released called “Action Joe”. A cybersquatter would quickly register the domain “actionjoe.com” and then charge the movie company a large “ransom” to buy the domain back.

Protective Domain Squatting

Domain squatting is not always a criminal activity. Often, companies will register various domains for brand name protection. For example, ‘BankXYZ’ might pay to register domains which are variants on their business name. They have no intention of using these domains; they are simply keeping them to stop others from using domain names similar to theirs. Even though they are paying for the privilege, this is a legitimate form of Domain squatting.

Some businesses, on the other hand, may be unreasonable and try to force domain names to be deregistered if they feel they are too similar to their own. Consider ‘XYZBank’. They maybe a legitimate new start-up company from another country; however ‘BankXYZ’ really doesn’t want them using a similar domain. This then becomes a legal battle, even though ‘BankXYZ’ has never owned the ‘XYZBank’ domain. They want them taken down; however, they are not willing to pay for these domains themselves. This can also be considered an extension of Domain squatting.

Unintentional Domain Squatting

This lack of available domains can often lead to accidental Cybersquatting. You might register a domain that is similar to another company name; even using your personal name can get you in trouble. The Trademark business may try to buy it off you or take you to court to obtain the domain name. A great example of this is the Microsoft vs Mikerowesoft dispute.

Microsoft vs. MikeRoweSoft was a legal dispute between Microsoft and a Canadian Belmont High School student named Mike Rowe over the domain name “MikeRoweSoft.com”. Microsoft saw the name as a trademark infringement because of its phonetic resemblance to their trademarked corporate name and demanded that he give up the domain. The case gained the attention of the international press after Microsoft took a heavy-handed approach to the student’s part-time web design business and sent him a 25 page cease and desist order. The subsequent support that Rowe received from the online community was credited with “softening Microsoft’s stance,” leading to an eventual settlement with Rowe granting ownership of the domain to Microsoft in exchange for an XBox and additional monetary compensation.

Choosing a Domain Name

Aside from the age-old challenge of trying to think up a catchy name and brand, today’s new businesses face the additional 21st-century problem of having to come up with something that isn’t already taken.

Here’s a fun exercise: Think of 5 names for a new hardware business and then look them up using a domain name registrar like ‘GoDaddy’, and see if the domain names are available. Chances are they’re not.

If you have decided you need an online presence for your business, you need to first work out which domain names are available and how much they will cost to rent.

Tech Tip:

A Registrar is a company with a special license that can rent out domain names. You can search for the domain you want to register, and they will list which domains are available and how much it will cost to rent them. Every Registrar charges different fees.

Registering a Domain

When you buy a domain, you have to register it with contact details (name, phone number, company name, etc). These details get stamped on every webpage, almost like a Yellow Pages lookup feature.

You can look up this information online for any website using a tool called ‘Whois Lookup’. In the Query box, enter the URL you are searching for (DO NOT include the “www”) then complete the CAPTCHA verification, which is used to verify that a real person is entering the request, rather than a computer bot or automated software). Once you click Submit you will obtain information on who set up the domain and paid for it, and which registrar sold it. This information is freely available on most websites. When you register your domain, you can pay to have some information hidden. This information is useful if you ever want to dispute a domain name.

In the coming weeks we will discuss another domain-related criminal activity, called Typosquatting; provide details on how to enter into a Domain Name dispute; and discuss what to expect in the future.