If you own a trademark and find that someone is holding it hostage as a domain name until you pay a large sum for it, you may be the victim of cybersquatting. Cybersquatting is registering, selling or using a domain name with the intent of profiting from the goodwill of someone else’s trademark. It generally refers to the practice of buying up domain names that use the names of existing businesses with the intent to sell the names for a profit to those businesses. The practice that’s come to be known as cybersquatting originated at a time when most businesses were not savvy about the commercial opportunities on the Internet. Some entrepreneurial souls registered the names of well-known companies as domain names, with the intent of selling the names back to the companies when they finally woke up. Opportunities for cybersquatters are rapidly diminishing, because most businesses now know that nailing down domain names is a high priority.
• Check where the domain name takes you: As a general rule, first check to see if the domain name takes you to a website. If it does not take you to a functioning website, but instead takes you to a site stating “this domain name for sale,” or “under construction,” or “can’t find server,” the likelihood increases that you are dealing with a cybersquatter. The absence of a real site may indicate that the domain name owner’s only purpose in buying the name is to sell it back to you at a higher price. Of course, absence of a website does not always mean the presence of a cybersquatter. There may also be an innocent explanation and the domain name owner may have perfectly legitimate plans to have a website in the future. If the domain takes you to a functioning website that is comprised primarily of advertisements for products or services related to your trademark, you may also have a case of cybersquatting. For example, if your company is well-known for providing audio-visual services and the website you encounter is packed with ads for other company’s audio-visual services, the likelihood is very strong that the site is operated by a cybersquatter who is trading off your company’s popularity to sell Google ads to your competitors.
• Contact the domain name registrant: Before jumping to any conclusions, contact the domain name registrant. Find out whether there is a reasonable explanation for the use of the domain name, or if the registrant is willing to sell you the name at a price you are willing to pay.
What You Can Do to Fight a Cybersquatter
A victim of cybersquatting in the United States has two options:
• sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA), or
• use an international arbitration system created by the Internet Corporation of Assigned Names and Numbers (ICANN).
Trademark experts consider the ICANN arbitration system to be faster and less expensive than suing under the ACPA and the procedure does not require an attorney.
Using the ICANN Procedure
In 1999, ICANN adopted and began implementing the Uniform Domain Name Dispute Resolution Policy (UDNDRP), a policy for resolution of domain name disputes. This international policy results in an arbitration of the dispute, not litigation. An action can be brought by any person who complains (referred to by ICANN as the “complainant”) that:
• a domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights
• the domain name owner has no rights or legitimate interests in the domain name, and
• the domain name has been registered and is being used in bad faith.
All of these elements must be established in order for the complainant to prevail. If the complainant prevails, the domain name will be canceled or transferred to the complainant. However, financial remedies are not available under the UDNDRP.
Suing Under the ACPA
The Anticybersquatting Consumer Protection Act (ACPA) authorizes a trademark owner to sue an alleged cybersquatter in federal court and obtain a court order transferring the domain name back to the trademark owner. In some cases, the cybersquatter must pay money damages.
In order to stop a cybersquatter, the trademark owner must prove all of the following:
• the domain name registrant had a bad-faith intent 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, and
• the trademark qualifies for protection under federal trademark laws that is, the trademark is distinctive and its owner was the first to use the trademark in commerce.
Defenses to ACPA lawsuits
If the accused cybersquatter demonstrates that he had a reason to register the domain name other than to sell it back to the trademark owner for a profit, then a court will probably allow him to keep the domain name.
What Can Be Done To Stop A Cybersquatter?
There is little you can do to safeguard completely against cybersquatting, short of buying up all conceivable domain iterations of your brand name and its potential misspellings. The most you can do is follow the best practice of checking regularly to see if a copycat website has popped up, and know what to do should it occur. Since many cybersquatting sites will attempt to trick your computer into sending over your private details or try to install malicious software on your device, it’s vital that you have the appropriate vulnerability management in place before you go investigating. A managed security service can help you safeguard your personal information and your business against phishing software and other threats. If you’re operating a business, you may want to look into investing in some CASB solutions. Cloud access security brokers (CASBs) are software tools that act as gatekeepers between your business’s local infrastructure and that of your cloud provider, ensuring that any traffic reaching your business complies with your security policies. Once you’ve carried out the checks mentioned above and have come to the conclusion that you’re dealing with a case of deliberate cyberstalking, you can:
• Raise a free complaint with the auDA through its official complaints form – just remember, if found guilty, the domain name will be deregistered completely and so may be bought up again by another cybersquatter.
• Consult the Dispute Resolution Policy and launch an independent arbitration process at a cost of $2,000 or more
• Report the incident to the Internet Corporation of Assigned Names and Numbers (ICANN) to enact the Uniform Domain Name Dispute Resolution Policy (UDNDRP), an international policy for the resolution of domain name disputes. If your claim is successful, the domain name will be cancelled or transferred to you, but this will not result in any financial remedies
• Hire a trademark attorney to look into the case for you. While this option is likely to be more pricey, it has the advantage of providing legal advice and dedicated service around your individual circumstances
Another option for dealing with a cybersquatter on your domain name is to file a lawsuit against the holder of the domain. This can be done by filing a lawsuit in Federal Court under the Anticybersquatting Consumer Protection Act (ACPA). The holder of the domain name is required to respond to the lawsuit, and failure to do so can result in a default judgment in your company’s favor. However, this method often takes longer than paying a cybersquatter for the domain and can be very expensive and time-consuming as you are required to navigate the courts. Use the international arbitration system that was designed by the Internet Corporation of Assigned Names and Numbers (ICANN). Under ICANN, a trademark owner can pursue the domain name through arbitration under the Uniform Domain Name Dispute Resolution Policy (UDRP). The complaining trademark owner must be able to prove that: they own a valid trademark; the domain name is identical or confusingly similar to their company’s trademark; that the cybersquatter has no legitimate interest in the domain name; and that the domain has been registered and used in bad faith. Each of the elements of the UDRP may appear on their face easy to establish, however, the facts may not be so clear after a thorough review. What makes the UDRP attractive is its speed and relative cost-effectiveness.
Legal Mechanism for Combating Cybersquatting
The Lanham Act is the primary law on trademark infringement in both the physical and the cyber marketplaces. Although the UDRP is the overwhelming choice of regime for cybersquatting in the 15 years of operation, Panels have handed down more than 45,000 decisions covering a multiple of domain names, the great majority of which favored trademark owners; there may be reasons for preferring a civil action, reasons that lie in the differences between the two regimes. While the ACPA and UDRP (and now the URS) have similar missions, they are differently constructed. The ACPA is an “either/or” model, which means that liability rests on proof that an alleged infringer either registered or is using the domain name in bad faith. The UDRP is an “and” model, which means that liability rests on proof that the alleged infringer registered and is using the domain name in bad faith. There is one other distinguishing feature that is particularly important and rarely highlighted, which is that the ACPA is a symmetrical and the UDRP an asymmetrical regime. With the ACPA, the prevailing party is entitled to injunctive relief, damages and attorney’s fees. For trademark owners this could be a primary incentive for a civil action, although it is also a double edged sword because, if the trademark owner overreaches its statutory rights, it will pay a heavy price in the form of attorneys’ fees and damages. With the UDRP each party bears its own costs and legal fees which are modest relative to a federal action. The asymmetry lies in the fact that only the complainant/trademark owner has an affirmative remedy, which is either cancellation or transfer of the domain name to its own name. For the domain name holder, the best it can get is a clean bill finding it either has a right or legitimate interest in the domain name, in which case it wins outright; or, if it lacks a right or legitimate interest the trademark owner fails to prove abusive registration. If the trademark owner has overreached by attempting a reverse domain name hijacking the Panel is authorized to issue a declaration to that effect, but the sanction is without economic penalty. The compensatory reasons for a trademark owner choosing the UDRP lie in the efficiency of its procedures and the quickness in resolving disputes. Reasoned decisions are generally delivered within 45 days of filing a complaint. Also, in the 15 years of its existence, the UDRP has developed an impressive jurisprudence that is partly based on trademark law, but which has essentially developed in much the same way as the common law, namely through successive decisions. This makes for a fairly predicable outcome in most cases. There is no appellate procedure under the UDRP, but if either party is unhappy with the UDRP decision it may commence a de novo civil action under the ACPA.
Arbitrating Under The UDRP
The UDRP has a simple three part structure. For standing to maintain an administrative proceeding the complainant has to prove two elements: the domain name is either identical or confusingly similar to the trademark; and complainant has to have a trademark right. Applicants for trademark rights are ineligible. Other parties who may be aggrieved by a domain name registration but have no trademark rights (an individual personal name for example), have no standing to complain. If complainant has standing it must then prove that respondent lacks any right or legitimate interest in the domain name in issue. Finally, the complainant has to prove that the respondent has registered and is using the domain name in bad faith. The common denominator of bad faith is targeting a complainant’s trademark with the intent of profiting from it. Bad faith is defined by the respondent’s acts in either registering or using the domain name. There are four nonexclusive circumstances that, in practice, cover a good bit of the universe of possibilities. Bad faith is found on proof of
3. competitor foul play, and
The first three are distinguished by focusing on registration. The fourth targets mark owners through their use of the domain name.
Cyber law, is been fast evolving into its own castigation pushing the traditional law firms into lucrative new legal areas. Legal combats most active area has been domain name disputes that involve indictments of trademark infringement, habitually by cybersquatters. Introduced by United States for the first time, cyberspace specific trademark legislation with Anti-Cybersquatting Infringement Act of 1999 (ACPA) was inclusive in US Trademark law.
Trademark law, has advanced to certify that the consumer is not mislead with respect to the product source. Accordingly trademark law helps maintain quality assurance. The benefits extend to the trademark owner. A trademark signifies a substantial expanse of benevolence from the view point of trust and recognition of customers. Hence, the trademark becomes valuable assets to businesses that their owners are profound to protect. Internet being most widely used commercial tool, company’s haven been beleaguered by cybersquatters. These squatters register trademarks as domain names thereby not allowing the trademark owners’ have their website created using their own mark. Since domain name disputes encompass trademark, traditional trademark law has been applied as well bigoted competition, slander, distorted and deceptive practises and passing off.
Domain Name Disputes
In 1993, very few businesses realised the commercial opportunities with internet still being in its infancy. The leading corporations were also slow to identify the use of technology provided by internet those days. In 1995, the number of domain names registered worldwide was 100,000 and 5 million in 1999. By 2000, this number jumped to 15 million domain names. In recent times, there has been a rapid increase in the growth of businesses and in respective domain name registration. Domain name registration has heated up from then.
Domain name is the internet protocol address uniquely assigned to a single computer via internet. Once this IP address coincides with name of a business that moment it becomes a valuable asset. For instance, an IP address 184.108.40.206 when turned into something like puma.com, this leads us to a totally new world which would involve consumer recognition and loyalty towards the brand or trademark. The association with the trademark makes the domain name a profitable tool.
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