Cybersquatting

Cybersquatting

Cybersquatting is the act of registering, trafficking in, or using a domain name with bad faith
intent to profit from the trademark belonging to someone else.

A “ cybersquatter” will typically offer to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.

 

The Anticybersquatting Consumer Protection Act (ACPA)

The Anticybersquatting Consumer Protection Act (ACPA) is a U.S. law that establishes a cause of
action for registering, trafficking in, or using a domain name confusingly similar to, or dilutive of,
a trademark or personal name.

This law is intended to stop those who register domain names containing trademarks with no
intention of creating a legitimate web site, but instead plan to sell the domain name for a large
profit to the trademark owner or a third party.

 

A trademark owner may bring a lawsuit against a domain name registrant who:

1. Has a bad faith intent to profit from the mark

2. Registers, traffics in, or uses a domain name that is:

  • Identical or confusingly similar to a distinctive mark
  • Identical or confusingly similar to or dilutive of a famous mark

“Trafficking” in the context of domain names includes sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.

The ACPA also requires that the mark be distinctive or famous at the time of registration.

 

ACPA Violations

If a violation of the ACPA is found, a court can order the forfeiture or cancellation of the offending domain name or [its] transfer to the owner of the trademark. The trademark owner can also recover
up to three times the actual damages, including the profits the domain name registrant made from
his use of the trademark, losses sustained, such as lost sales or harm to the trademark’s reputation.

The trademark owner may recover statutory damages of up to $100,000.