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Dealing With Cybersquatters:What to do if your company name or mark is being used by someone else in a domain name

What is cybersquatting?

Cybersquatting is when a person registers or uses a domain name (website address) in bad faith that is the same or similar to a trademark that is owned by someone else.

The typical example of a cybersquatting is as follows:  You run a company selling widgets, AwesomeProducts, Inc., and sell your products at the URL www.awesomeproducts.com.  Without your permission someone else has registered the website www.theawesomeproducts.com and is using your company logo and is selling knock-off widgets through this site.  The owner of www.theawesomeproducts.com is a cybersquatter and you would be entitled to have their website taken down or transferred to you.

However, a cybersquatter is not simply anyone who operates a website with a URL that is confusingly similar to your trademark.  For example, Delta Faucets and Delta Air Lines both operate their companies under the mark “Delta”.  Delta Faucets would be unsuccessful in arguing that Delta Air Lines is cybersquatting on the domain www.delta.com.  This is because Delta Air Lines has a legitimate right in the mark “Delta” and is not using the domain in bad faith.  No one is going to go the Delta Air Lines site and think they are shopping at the Delta Faucets site.  Consumer confusion is the cornerstone of trademark infringement, and trademark infringement is the underpinning of anti-cybersquatting policies.

Someone is cybersquatting on your trademark, what can you do?

The very first thing you should do is send the infringer a Cease & Desist letter demanding they stop infringing your mark (more information on Cease & Desist letters is available here).  If talking with the infringer is unsuccessful, you have two legal recourses you can take to obtain an order requiring the infringer to stop.  You can file a law suit under the Anticybersquatting Consumer Protection Act (ACPA), or you may file a claim for arbitration under the Uniform Domain-Name Dispute-Resolution Policy (UDRP).

The Anticybersquatting Consumer Protection Act (ACPA)

The ACPA is codified at 15 U.S.C. § 1125(d) and was enacted in 1999.  Cybersquatters often are in violation of other trademark laws, however, as cybersquatting became an increasing problem the ACPA helped clarify exactly what types of conduct are illegal and what a plaintiff must show to have an infringing site removed.

Under the ACPA a person is cybersquatting when:

  1. They have a bad faith intent to profit from another’s mark, and
  2. Registers or uses a domain name that is confusingly similar to that mark.
    1. If the mark is famous, the cybersquatter may be guilty of trademark dilution as well.

The major issue that is generally disputed in these cases is: what constitutes ‘bad faith’?  While there is no bright line test for determining bad faith, some of the factors the courts look to are:

  1. Any rights the cybersquatter has in the mark, e.g. if the cybersquatter has a federal registration for the mark.
  2. How descriptive the domain name is, e.g. if the domain name describes the products or services being sold, it is afforded less protection.
  3. If the cybersquatter has used the site for a purpose unrelated to your products or services.
  4. Evidence that the cybersquatter is intentionally confusing customers and/or diverting them from your site.

The bad faith factors are delineated in the statute, but judges are not bound to only look at those factors when determining if there has been bad faith.  Any reasonable argument for showing bad faith is admissible.

The ACPA is a federal law and so should be brought in a federal district court.  Many cybersquatters will essentially admit their guilt by not showing up to court, which reduces your litigation costs.  However, pursuing any litigation can be a costly endeavor, and should generally only be undertaken if you are serious about protecting your rights.  It is strongly advised that you obtain the help of a lawyer before bringing a civil action in federal court.

Writing a letter to the host having them take the site down is obviously a much less expensive method of protecting your mark.  Unfortunately, unlike infringers of trademarks and copyrights, web hosts will generally refuse to remove a site for cybersquatting unless you successfully pursue a claim under the ACPA or the UDRP.  (See here for information on DMCA takedown letters.)