With the internet growing more and more in usage for business purposes, it’s no surprise that more and more business litigation matters involve online crimes. Everything from website copyrights  and online marketing strategies to cases involving hacking and theft of online “property” are capable of being business litigation matters that end up in court.

Since the inception of the internet, cases involving online property rights and branding have seen their day in court. Laws have needed to be implemented to protect the rights of individuals who seek to do business online. One of these laws involves what is defined in California law as “cybersquatting”. Our clients have been on both sides of the fence in these situations, and we are prepared to help your company as well.

money in the hands

What is Cybersquatting?

Cybersquatting, sometimes referred to as domain squatting, is registering, trafficking in, or using an Internet domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. This is the term as defined by the United States federal law known as the Anticybersquatting Consumer Protection Act.

Generally, cybersquatting occurs when an individual or group begins buying up domains that share the name of a company or companies that are gaining momentum but have not acquired that domain yet. The purpose of the purchase is strictly to sell back the domain to the company for a profit. Imagine if a company manufacturing vehicles didn’t have a website yet, and you purchased a domain that bore their company trademark so you could sell it back. You would then be in violation of the California Cybersquatting law.

Cybersquatting doesn’t generally happen by accident. Most cases brought to court involve an individual clearly being aware of their intentions. There are cases that are sometimes found to be frivolous. For example, an individual may come up with the same name for a different business, purchase the domain, and utilize it before another company seeks to use the name. In order to try and take the domain for themselves, they may falsely accuse the first organization from taking their branding or the domain for cybersquatting purposes when it is clearly a case of someone else having the idea for the domain name first.

Taking Action Against Cybersquatting

The first step of taking action against cybersquatting is identifying if you are dealing with a cybersquatter. If a domain is not available through a hosting company and the site in question is not a functional site or has a “for sale” page up, odds are that you are dealing with a cybersquatter. This isn’t a universal truth, however. Sometimes the page has just been purchased, or the owner has legitimate reasons for not having a site up yet. Other examples of cybersquatting indications are a website full of ads for related services using your brand name. The individual may be taking advantage of your brand to earn money through advertising with your competitors.

The first step you should take regardless is to contact the person who owns the domain. Performing a “WHOIS Lookup” is a widely used task to determine the owner of the site and provide contact information. This should be done for two reasons. One is that jumping to conclusions is not beneficial for either party and likely won’t help you to get the domain you want. The other reason is that the price for which the other party is willing to sell the domain may be less than what it would cost to take the person to court. There is no benefit to taking someone to court if it costs more than what the person is asking for the domain, especially since no case is ever guaranteed to end in your favor.

If you do decide to take the individual to court after contacting them, usually if they are being unreasonable or asking a ridiculous sum for the domain, you have two options to take action.

A victim of cybersquatting may:

  • Sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA)
  • Use an international arbitration system created by the Internet Corporation of Assigned Names and Numbers (ICANN)

Trademark experts generally advise to use the ICANN procedure if possible due to the fact that it is considered to be faster and less expensive than suing under the ACPA and does not require an attorney. However, depending on the severity of your case, it may still be very much beneficial to consult with an attorney about your options.

If you do decide to sue under the ACPA, you must prove the following in court:

  • the domain name registrant had a bad faith intent to profit from the trademark
  • the trademark matching the domain was distinctive at the time of the registration or carried some value
  • the domain name is identical or confusingly similar to the trademark
  • the trademark qualifies for protection under federal trademark laws, meaning the trademark is distinctive and the owner was the first to use it in commerce

The accused cybersquatter will generally have to prove that there was a reason for the domain registration other than to sell it back to the trademark owner for a profit. If the accused can prove this, then the domain will usually be left with the original owner.

Need Help With A Cybersquatting Matter?

WB Law Group is a reputable business litigation firm with experience in matters involving California cybersquatting law. If you feel you need legal representation, we are happy to review your case and provide consultation.

For questions, or to schedule a consultation, contact us today at 559.­431.4888 (Fresno) or 619.399.7700 (San Diego).