Cybersquatting
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Derived from the term Squatting which is the act of occupying an abandoned or unoccupied space or building that the squatter does not own, rent or otherwise have permission to use.
Cybersquatting is a term used to describe the practice of registering and claiming rights over Internet domain names that are, arguably, not for the taking. The cybersquatter then offers the domain to the person or company who owns a trademark contained within the name at an inflated price, an act which some deem to be extortion.
Cybersquatters usually ask for prices far greater than that at which they purchased it. Some cybersquatters put up derogatory remarks about the person or company the domain is meant to represent in an effort to encourage the subject to buy the domain from them.
Cybersquatters sometimes register variants of a popular trademarked names, a practice known as typosquatting.
Cybersquatting is one of the most loosely used terms related to domain name intellectual property law and is often incorrectly used to refer to the sale or purchase of generic domain names such as shoes.com; where a covetous party has designs on unseating the entity that was first to register. See also Typosquatting.
Legal resolution
Domain name disputes are typically resolved using the Uniform Domain Name Resolution Policy (UDRP) process developed by the Internet Corporation for Assigned Names and Numbers (ICANN). Critics claim that the UDRP process favors large corporations and that their decisions often go beyond the rules and intent of the dispute resolution policy.
Court systems can also be used to sort out claims of cybersquatting, but jurisdiction is often a problem, as different courts have ruled that the proper location for a trial is that of the complainant, the defendant, or the location of the server through which the name is registered. People often choose the UDRP process because it is usually quicker and cheaper than going to court, but courts can and often do overrule UDRP decisions. In Virtual Works, Inc. v. Volkswagen of America, Inc., the United States Supreme Court created a common law requirement that the cybersquatter exhibit a bad faith intent in order to confer liability. This means that domain names bearing close resemblance to trademarked names are not per se impermissible. Rather, the domain name must have been registered with the bad faith intent to later sell it to the copyright holder.
Some countries have specific laws against cybersquatting beyond the normal rules of trademark law. The United States, for example, has the U.S. Anticybersquatting Consumer Protection Act (ACPA) of 1999.
Under UDRP policy, successful complainants can have the names deleted (which often just means someone else will register it) or transferred to their ownership (which means paying regular renewal fees on all the names or risk them being registered by someone else). Under the ACPA the cybersquatter can be held liable for actual damages or statutory damages in the amount of a maximum of $100,000 for each name found to be in violation.
There have been several instances of companies, individuals or governments trying to take generic domain names away from their owners by making false claims of trademark violation. Sometimes they are successful. This practice is called "reverse domain hijacking" and is also punishable by a penalty of up to $100,000 for each violation.
The term cybersquatting is sometimes wrongly used to refer to the sale or purchase of generic domain names. Due to the shortage of descriptive and generic available domain names, covetous entities often try to exploit the term Cybersquatting to suit their desired ends.
