How to Recover your Domain from Cybersquatters

Few things are as frustrating as losing a domain name to a competitor or finding that someone else has registered your business name or trademark as a domain name.  Adding to the frustration, the domain name registrant may demand a significant amount of money in response to a request to purchase or transfer the domain name.  However, trademark owners who find themselves in this type of predicament may have legal options available.  If a domain name registrant is “cybersquatting,” the trademark owner may compel the transfer of the domain name by filing a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) or by bringing an action in court under the Anticybersquatting Consumer Protection Act (ACPA).

What Is Cybersquatting?

Cybersquatting refers to the act of registering domain names of existing trademarks for the purpose of reselling them for a profit. To prove cybersquatting, a trademark owner must show:

  1.   that the business owner owns a trademark (either registered or unregistered) that is confusingly similar to the domain name;
  2.   that the domain name registrant has no legitimate right or interest in the domain name; and
  3.   that the domain name registrant registered the domain name in bad faith.

What does “confusingly similar” mean?

If the public might confuse the domain name with the trademark, then the domain name and the trademark are confusingly similar. In assessing whether a domain name and a mark are confusingly similar, perform a side-by-side comparison of the domain name and the textual components of the trademark to determine whether the trademark is recognizable within the domain name. If the domain name uses the entire trademark or a substantial part of it, the domain name is likely confusingly similar to the trademark.

A trademark owner need not have registered the trademark with the U.S. Patent and Trademark Office (USPTO) to show that it is confusingly similar to the domain name.  Although a trademark has not been filed with the USPTO, an owner may nonetheless have legal rights to that trademark and be able to enforce those rights against a cybersquatter. These rights are called common law rights. Common law rights in a trademark arise when a person uses a unique mark in connection with a business but does not register the mark with either the state or federal trademark office. Though common law rights are more limited than the rights that come with formal registration, a common law trademark still confers upon the trademark owner the right to enforce its trademark against a cybersquatter.

What is a legitimate right or interest?

A domain name registrant must hold the domain name for a legitimate commercial or personal purpose. Registering a domain name with the intent to sell it for profit is not a legitimate right or interest. Often, holders of domain name registrations who merely seek to sell and profit on the domain name will not have a functioning website at the domain address. A site that is blank, contains only advertisements, or displays a “for sale” statement, is likely owned by someone who does not have a legitimate right or interest.

What is bad faith?

Bad faith means that the domain name registrant registered the name primarily to keep the business or trademark owner from using that domain name. In looking for evidence of bad faith, determine whether the domain name registrant holds the domain name for the purpose of selling, renting, or transferring the domain name to the trademark owner or to a competitor of the trademark owner for a profit. Again, if the domain address leads to a blank page or to a “for sale” page, the owner likely intends to sell the name to you or a competitor for profit. Additionally, if a competitor purchases the domain to disrupt your business or to divert traffic from your business, there is likely bad faith.

Why Is Cybersquatting Illegal?

Trademark owners have exclusive legal rights to their intellectual property. Rules against cybersquatting prevent domain name registrants from profiting from another’s trademark. The laws ultimately protect businesses and individuals from being exploited for monetary gain.

How Do I Acquire a Domain Name from a Cybersquatter?

If you believe that someone is cybersquatting in violation of your trademark, you can either file a complaint under the UDRP or you can file an action in court. If you are successful, the domain name will automatically transfer to you at no cost other than filing and attorney’s fees.  Filing a complaint under the UDRP is cheaper, quicker, and easier than filing an action in court. However, the only remedy available in a UDRP proceeding is the compelled transfer of the domain name.  Monetary damages and reimbursement for fees are not available under the UDRP.  If you file an action in court under the ACPA, the court may award monetary damages for any injury your business has sustained due to the actions of the cybersquatter.  Unless your business has sustained substantial injuries, filing under the UDRP is generally more cost-effective because court filings are significantly more expensive and time consuming.

If you believe you are the target of a cybersquatter, there may be legal remedies available to you.  A consultation with an experienced attorney can help you determine what rights you may have.

Kuzmich & Associates is located in Tempe, Arizona.  We assist many businesses throughout the state with a variety of legal issues, including employment contracts, leases, contract review and business transactions.  Need an experienced business law attorney? Contact us.

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