3 Ways to Protect Your Business From Cybersquatting
No matter what sector you operate in, your business’s internet presence is likely a key component of your branding and/or marketing strategy. For that reason, it’s crucial to protect your company’s website(s) and web presence. One threat to protect against is known as cybersquatting.
What is Cybersquatting?
Cybersquatting—also known as cyberpiracy—is the bad-faith registration, use, or sale of a trademarked internet domain name with the intent to profit from the mark’s goodwill. Cybersquatting falls under the umbrella of the Lanham Act and is prohibited by the Anticybersquatting Consumer Protection Act (ACPA), which provides for a cause of action against cybersquatters. The elements of cybersquatting include (i) the cybersquatter is using a domain name that is confusingly similar to your trademark; (ii) the cybersquatter has no rights or legitimate interests in the domain name; and (iii) the cybersquatter registered and is using the domain name in bad faith.
One example of cybersquatting is if a company buys a domain that includes a competitor’s trademarked name and then redirects traffic to that domain to its own website—think a shoe company registering nike.org and redirecting visitors to its own site. Another example is if that same shoe company created a website on the nike.org domain through which it sold its own shoes. Registering and redirecting domains containing potential misspellings or typos—such as redirecting starbuks.com to the website of another coffee seller—or registering a domain for a company without a website for the sole purpose of selling the domain to that company can also constitute cybersquatting.
How to Protect Your Business From Cybersquatting
If you believe that someone has cybersquatted on your trademarks, here are three ways to protect your business:
Send a demand letter: In many instances, the infringing party may not be cybersquatting with the bad faith required to prosecute such a claim. For example, perhaps the infringer didn’t know about your trademark prior to registering a confusingly similar domain. A demand letter will put the infringer on notice that their actions may be unlawful and provide them with an opportunity to remedy the situation in an amicable way.
Initiate a UDRP proceeding: The Uniform Domain-Name Dispute-Resolution Process (UDRP) is a form of arbitration that allows parties to resolve disputes over domain names outside of court. A UDRP proceeding can be faster and less expensive than litigation. Unlike litigation, UDRP hearings are conducted ex parte and decisions are typically rendered based only on a limited number of filed documents (primarily a complaint and a response). A successful UDRP decision will require the infringing party to transfer the domain at issue to you.
File a lawsuit: You can also protect your mark against a cybersquatter via litigation. One reason to litigate might be because your UDRP proceeding was unsuccessful (UDRP decisions are not binding on courts and may be appealed). Another reason to choose litigation may be because you are entitled to monetary damages, which are not awarded via the UDRP process. In addition to getting the domain name transferred to you, a favorable result in litigation can result in an award of monetary damages, including statutory damages under the ACPA (which can range from $10,000 to $100,000).
Because of the fact-specific nature of cybersquatting issues, it’s a good idea to consult with an IP attorney if you believe your trademark has been infringed due to cyberpiracy. Our firm regularly litigates and advises on cybersquatting issues.