Running alongside the legitimate players in the domain name industry are an unscrupulous breed of internet criminals known as ”cybersquatters”. Cybersquatters register the trademarked names of established companies and try to make money off of the company’s well-known brand. Real domainers detest this kind of behavior, and are not part of it.

Trademark protection groups (and related legislation) are popping up as a direct result of cybersquatters continuing to register and exploit known trademarks. This activity damages a company’s brand equity as well as costing the company considerable sums tracking infringers and trying to eliminate the infringing domain names.

There is a considerable cost also to legitimate domainers and companies who exist on the right side of the domain name industry. All of these people suffer needlessly because of the abusive activity of cybersquatters.

Examples of companies that cybersquatters have tried to exploit are Verizon, Nieman Marcus, Louis Vuitton, and Microsoft. Typically, cybersquatters will register exact duplicates of such names or variations on the name including misspellings like “Verizan”.

Bottom Line: NEVER register the domain name of an established company or celebrity. That is not domain investing. It is cybersquatting. Cybersquatting is a crime and morally wrong as well. Being a wise domain investor means maintaining a clean portfolio and avoiding established trademarks.

The real opportunity in domain investing lies in quality generic domains which are coupled with full development. However, if development is not the primary goal, other monetization strategies can be implemented. Generic domains offer very good buy & hold potential due to their ability to attract eventual end user buyers looking to elevate their business through the acquisition of a Class-A premium domain name.

The domain registrant will typically receive a cease & desist letter accusing the registrant of infringing on a trademark (that is arguably weak or non-existent). The letter may demand that the registrant either cancel the domain registration through their sponsoring registrar, or transfer the domain name to the person/company claiming the infringement.

Reverse hijacking is more easily defended in regard to generic domain names. Pure generic and geographical domain names enjoy considerable protection under U.S. trademark law, and there is an extensive body of case precedent supporting this conclusion. That is excellent news for holders of generic domain names. However, some unscrupulous companies will try their luck with the UDRP process in the hope that you, the registrant, will fail to respond to their UDRP claim.

Key point: Always respond to a UDRP claim. They are winnable. You have 20 days to file a response to a UDRP. Reverse hijackers feel they have nothing to lose since submitting a UDRP claim can be done for as little as $1250. If you fail to respond to a claim in the allotted time, then the hijacker will win by default and your domain name will likely be transferred to the hijacker simply on your failure to respond.

There are cases in which a registrant was out of the country on business or vacation, and did not get back home in time to respond to a UDRP claim. So checking mail and email at least weekly is obviously important. If you lose a UDRP against a hijacker, you have 10 days to file a civil lawsuit for “injunctive relief” which will take the case to court where you can have the unjust UDRP decision overturned. However, it’s much easier to just respond to the UDRP and win the case up front.

Listed below are additional resources to further your research

• USPTO.gov (United States Patent & Trademark Office – Trademark Search)
• WIPO (World Intellectual Property Org. – UDRP Domain Name Case Search)
• NAF (National Arbitration Forum – UDRP Domain Name Case Search)
• DomainFight.net (an excellent site that will search the database of both WIPO & NAF)

Domain Attorneys (with numerous wins to their credit) 

• Ari Goldberger
• John Berryhill

Challenging and eliminating cybersquatting (trademark infringement) is a worthy goal and one that is supported by legitimate domainers. Honest domain investors understand the damage created by cybersquatting, and they avoid dealing in domain names that present clear infringement issues. Quite unfortunately, the general public have been misinformed as to what constitutes true cybersquatting, and wrongly assume it applies to registering domain names for resale, development, or other monetization techniques. Of course, these activities constitute a well-established, legal, and advisable business model that was a natural outgrowth of the successful domain name industry.

Internet domain names are virtual real estate. And like real estate, a developer/owner may choose to pursue any number of options for utilizing an internet property. As long as the domain name in question is not infringing on an existing trademark, then “cybersquatting” doesn’t enter the picture.

The ICA (Internet Commerce Association) is an organization that came into existence to help represent the domain name industry fairly, and to help protect the rights of domain name registrants and domain developers. The concern for legitimate domainers is that CADNA, or similar entities, will over-reach their purview and catalyze government action that limits or damages the rights of legitimate domain registrants. This cannot be allowed to happen as it would be as ethically unacceptable as cybersquatting. An equally damaging wrong commited in the opposite direction.

It is extremely unfortunate that blatant cybersquatters tried to exploit and steal the profits of companies. This behavior was so egregious, widespread, and publicly condemned that the cloud of contempt extended well beyond the cybersquatters to tarnish even honest domain developers and entrepreneurs.

Today, domaining is gaining respect and interest from the larger business community. There is much to overcome since so much misinformation and misguided contempt were disseminated by the general media (who were often too complacent to collect and report factual information). The media love to castigate, and cybersquatters fueled the fire with gasoline.

Domainers are working to maintain clean portfolios and to conduct honest, ethical business. One doesn’t have to steal and cheat to be successful in the domain investment community. But, as in any and every business sector, you always have some rotten eggs.  Key Point: Cybersquatting … is not domaining.

I encourage general readers, and in particular domainers, to speak out against cybersquatting, and to discourage those new in our industry from registering a known company’s domain name. Thankfully, the division between legitimate domaining vs. cybersquatting is becoming more clear everyday. It’s a shame the battle was so long and such an uphill climb. It’s not over. But we’re nearing the top … where we belong.