With the increase in ecommerce and the necessity of a web presence for any business, protecting trademarks has become increasingly important, as large companies face the risk of their valuable traffic being hijacked by cyber- and typo-squatters.

Cybersquatting is the practice of registering a Domain Name which is either a trademark, or looks a lot like one, in what is called "bad faith": a broad term which covers a multitude of sins. Some cybersquatters merely wish to smear the reputation of a well-known company by misdirecting their customers to a site on which appears satirical, polemical or obscene material. Others intend to redirect traffic for financial gain, simply "parking" the domain name at a page with lots of pay-per-click advertisements, or else setting up a very similar business in the hopes of feeding off brand recognition. Then there are those who plan to sell the domain name to its rightful owner at a huge profit. The intentions of others are even shadier: "phishing" sites, illegal in their own right, are designed to look exactly like the login page of the legitimate sites of banks or credit card companies, and farm unsuspecting visitors' contact and bank details for nefarious purposes.

Typosquatting is a related practice: the typosquatter will register a domain name which is a popular typo of a brand name website, like mircosoft.com, in the hopes of hijacking visitors who mistyped the domain name of their desired destination. Wikipedia has been a victim of typosquatting on several occasions, with domains such as "en.wikipedi.org" and "www.wiipedia.org" being registered and used to park ads, pornography and pop-up windows. A similar trick is to register a 800 number in the same way: the telephone and internet provider AT&T dropped its number 1-800-OPERATOR and substituted 1-800-CALL-ATT when it realised that MCI communications was gaining a lot of their business by registering the number 1-800-OPERATER, relying on customers misspelling the word.

Cybersquatting is now illegal under US federal law; an amendment called the Anticybersquatting 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 cybersquatting, 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 cybersquatter 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 is necessary to prevent large businesses snatching domain names that were registered in good faith, a practice known as reverse domain hijacking. Whilst some cases are clear-cut, a case of an alleged cybersquatter 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 cybersquatting 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 cybersquatting 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.

What are the implications for domain registration? Clearly, it is worth being careful that you are not infringing any trademarks when you register a domain name. Check before you register. It's better not to end up in court, even if you're found innocent. If you want to get someone's back up by registering a domain name, however, there are legitimate (and funny) ways of doing it, as Goldstein rather elegantly showed.

Resources:

Nolo.com - Cybersquatting: What It Is and What Can Be Done About It

Wikipedia.org

Wired.com: Real Cybersquatting Really Sucks

The Library of Congress (Thomas)

By Natalie Catchpole