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Cyber-Squatting

This white paper explain how cyber-squatters tend to operate and provides simple advice on how to deal with the problem/opportunity!

 

Cyber-Squatting - What is it? And what can you do to solve it?

So you just decided to start your online business. That idea you had is great and you made the initial investment of time and money. You've got everything organized and planned and you're eager and ready to go. Its all going full steam ahead until the web address you wanted to use has already been taken, or worse still, somebody has brought similar web names or ones you should have bought and it's going to cost you £££ to get them back!

 

What is Cyber-squatting?

Cyber-squatting is an absolute menace for companies and individuals who want to register a domain name on the web. If you are an organization, business or even a celebrity you are probably going to want to buy a domain that is at the top of its league. Buying a domain is similar to buying property. A .com address is like buying a luxury New York apartment, .co.uk is a London Town House, .net is London suburbia and the others (.biz, .info .uk.com, .us, .eu etc) can been seen as out of town, less convenient and less desirable locations.

So what is Cyber-squatting exactly? Sometimes known as typo-squatting, it's almost exactly what it sounds like. Someone registers your domain name before you do and then asks you for lots of money when you want to use it! It's basically legal blackmail. Typo-squatting is similar, but refers to misspelled trademarks being registered instead of a name or term. Taking advantage of misspellings of certain well known sites has become a common practise among cyber squatters in recent years.

This form of name hijacking certainly isn't something new. Ever since it's been possible to register a domain name, people have stolen domains to either make money or make difficulties for companies or organisations. Celebrities often face the same dilemma as organisations when the try and register a domain in their own name. A notable case is Kevin Spacey who ultimately lost his court case over www.kevinspacey.com. It was decided that as long as the owner of the website was not an attempt to sell on the name, it would be considered fair use of the domain.

Although celebrities seem to suffer a great deal from squatters, companies and organizations generally have had to slug it out in court to obtain the rights to their domain names. MTV, Tesco and the BBC are all major companies that have had to deal with cyber-squatters to obtain a website in their own name.  The BBC managed to win back its rights to the domain bbcnews.com after it was registered by a cyber-squatter. With new laws, it is becoming easier for corporations to obtain domain names that are relevant to their business if the current owner has no real use for it, or if it has been registered in bad faith. However, it usually costs money for a court battle and you should expect to put up a fight, so it's often worth coming to a amicable settlement out of court.

In the USA there are new laws in place to help beat cyber-squatting, notably California, but it all depends on what state you live in! You should remember that the USA is a federal republic and is made up from different states. Although each state must obide by the constitution, for the most part they have the power to govern their own laws. This makes if more difficult to fight cyber-squatters depending on where you live. Also consider people registering domain names from outside of the country which makes it even harder to win back your rights.

The UK is slightly more ahead of the USA, since an anti-cyber-squatting law was passed in 1998. It seems that the best way to reclaim your domain is to go through the Internet Corporation for Assigned Names and Numbers. The ICANN will help you to resolve such issues if you can prove that any copyright infringement has taken place or that someone has registered a domain in bad faith towards you or your company.

 

What can you do about Cyber Squatters?

So what steps should you take when discovering someone has already taken your desired domain name? First find out who the registered owner of the domain is and what their reasons are for registering under that domain. Is it for business or a hobby? Do they have a legal right to own or use that name? You should remember that unless it's obvious that a person is using the domain in bad faith, or that they are trying to scoop up all the possible domain names they can, it can be a very grey area when trying to acquire the rights.

Imagine a person called Neil Ike. He wants to register a domain that is relevant to his name. It is for personal use and there us no malicious intent. So he registered the domain www.nike.com. For this reason it would make it much harder to obtain the rights back for this domain. If, however, Neil Ike also registered the names www.cheaptrainers.com or pointed the traffic to, say, addidas, then this would be considered ‘bad faith' and the domains could easily be obtained - probably without even going to court. Bad Faith is using a domain to make profit from another company's product and name or for critical or derogatory reasons.

Check out the contents of the website. Are they trading under the same name as you? Is it a legitimate website? If there is an abundance of advertising in this website, that is a sure giveaway that people are making profit from your name on the web. To find out information about the register you can do a whois lookup at most of the domain registering sites. This lookup will provide you with basic information about the website host and its owner. Be aware that you shouldn't expect this information to be correct. People often use an alias to register as there are no security procedures or checks to verify who owns what on the web. You should consider contacting the ICANN if you discover someone else using a domain in your name, especially if they are making money from it.

Typo-squatting can now also be fought against. If someone registered the domain warnerbross.com or warnnerbros.com, this can be considered potentially illegal. People often take advantage of spelling mistakes to redirect traffic to another site, that in many cases does not allow you to leave their site without being immersed in endless amounts of advertisements. Microsoft.com has been the victim of Site Squatting in years past. Sites like microsotf.com and microsft.com have been registered and misused by various individuals.

"Passing Off" is a part of normal UK law. Basically it is illegal to ‘pass yourself off' as if you were another person or organisation with a view to benefiting i.e. you can't copy people's names or goods or pretend to be them. Also making money, say via affiliate deals using a web name to sell merchandise that you don't own the brand to - although some brand owners won't mind as long as you don't push people to competitors instead of them.

Reclaiming your domain name is not always a quick process and it can depend on how the squatter reacts when being pushed by you or the ICANN. If there is no obvious reason why you should have legal right to that domain, then you will have to go to court, especially in rare cases when the ICANN can't help you. For the cost of hiring a lawyer it is sometimes more convenient and quicker to pay an asking price from the squatter - if it's reasonable of course but don't be bullied into handing over cash to save your domain. Depending on your principles you may wish to cooperate or you might want to seek advice from a solicitor.

Recently, cyber squatters have tried another approach for obtaining domain names without having the legal hassle; they are buying up domains and offering them to celebrities and organisations with their expertise to develop the site. They claim not to have any malicious intent, and even offer their services free or change if in the future further business is possible! Although this is a softer form of cyber squatting, it could still be a problem if you don't want to cooperate which is highly likely if you are an online merchant because you will want to develop the site yourself. It is also difficult to place any trust in these people / companies, especially if you look at the history of cyber squatting.

Cyber-squatting is an annoyance more than anything else. It is not usually a vicious crime, and sometimes even difficult to prove it's a crime at all but since the internet has always been on a first come first serve basis, it is usually the merchant who, unfortunately, has to pay out more than expected to protect their name online.

It is also worth thinking long and hard before picking a name for a new business. As an example, who would you say should have the rights to www.polo.com - is it Polo Ralph Lauren (clothing), Nestle (Polo - the mint), Polo (the sport) or Volkswagen (Polo the car)?

As part of our service for clients, something4 offer free advice regarding cyber-squatting and help clients obtain the most cost effictive and benefitial commercial outcome.

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