Let’s get right to the point: Cybersquatting is the unauthorized registration, use, or sale of domain names that exploit the goodwill of trademarks owned by others.
Its roots can be traced back to the early days of the internet, long before the rise of mainstream ecommerce. Cybersquatters seized would-be company domain names, hoping to resell them at inflated rates.
Although heightened awareness and legal actions have since reduced its prevalence, cybersquatting still poses a major risk to businesses and individuals.
Now that you understand what it is, let’s look at the various ways it can manifest itself in real life. Afterwards, we’ll briefly review two laws that have been enacted to counter the practice. Then we’ll go over some ways you can help protect yourself against it. Finally, we’ll wrap it up with some frequently asked questions (and answers, of course).
Types of cybersquatting
Cybersquatting exists in various forms, each exploiting digital assets differently. The primary types include typosquatting, brandjacking, reverse cybersquatting, and domain name front running.
Here are the details:
1. Typosquatting
Typosquatting, also known as URL hijacking, takes advantage of the typing errors made by internet users. By registering misspelled versions of well-known domain names, typosquatters direct users to alternative websites – often for malicious purposes such as phishing, malware distribution, or spammy ads.
For example, a typosquatter might register “amazoon.com” or “facebok.com,” anticipating that some users will mistakenly input these URLs when trying to visit Amazon or Facebook, respectively.
Such fraudulent sites may even mimic the look and feel of the intended destination to further deceive users.
The impact of typosquatting on business victims includes brand dilution and loss of web traffic, which may potentially harm their reputation and revenue. For users, typosquatting poses security threats – as cybercriminals overwhelmingly rely on them to steal sensitive information, such as login credentials.
2. Brandjacking
Cybersquatters are also known to engage in brandjacking, where they engineer a well-known brand’s name into a fake domain to mislead internet users.
You might, for instance, come across a website registered under “StarbucksOffers.net” or “MicrosoftHelpDesk.org”. Such brandjackers would be hoping to mislead prospects on promotions from Starbucks or technical support for Microsoft.
By impersonating or riding on the trademarks of reputable entities, brandjackers aim to exploit consumer trust for their own ends. They may use the opportunity to siphon off traffic, spread misinformation, or gain illicit profits.
3. Reverse cybersquatting
Reverse cybersquatting represents a rather contentious twist, in which the tables are turned on domain name holders by trademark owners. They are accused of cybersquatting without substantial grounds. Complainants often use aggressive tactics, sometimes intimidating legitimate domain owners into surrendering their rightfully owned digital assets.
For example, a small business domain name that coincidentally rhymes with a part of a larger corporation’s trademark could face accusations of cybersquatting.
A new site like, say “GreenInnovateTech.com,” may receive threats from a multinational corporation claiming infringement on their “innovate” trademark – despite the startup’s legitimate use of the term, which is unrelated to the multinational’s business.
Ethically, this whole situation raises questions about the limits of trademark protection and the rights of domain name holders. Domain name holders can safeguard their interests by documenting their legitimacy, engaging in open dialogues with the trademark owner, or, if necessary, seeking legal counsel to defend against baseless accusations.
4. Domain name front running
This variation comes from a predatory practice in the domain registration process. It occurs when opportunistic entities spy on attempts by individuals to check the availability of specific domain names. Upon identifying a searched and yet-to-be-registered domain, the opportunists proceed to preemptively register the name. They then try to sell it to the original searcher at a premium price.
Imagine a scenario where an entrepreneur searches for a domain like “EcoFriendlyApparel.com”, hoping to secure it for their startup. But, before they finalize registration, a front runner who has spied on the search, swoops in, secures the domain, and then attempts to sell it back at a significantly higher price.
By inflating the costs of targeted online real estate, domain name front running has the potential to derail business initiatives such as branding, marketing, or product launch. To mitigate risks, prospective domain buyers should use secure, reputable platforms for their searches and promptly register desired names.
Is there a law against cybersquatting?
Not only is cybersquatting universally condemned. It’s considered illegal in many jurisdictions due to its exploitative nature and detrimental effects on brands and individuals.
The legal framework for cybersquatting varies widely across jurisdictions, with some countries having specific laws against it and others addressing it through general trademark and intellectual property legislation.
Two particularly notable laws against the practice include the Anticybersquatting Consumer Protection Act (ACPA) in the U.S. and the more globally applicable Uniform Domain-Name Dispute-Resolution Policy (UDRP).
Anticybersquatting Consumer Protection Act
In the U.S., domain owners have been counting on the Anticybersquatting Consumer Protection Act (ACPA) since 1999 to protect their rights in cases of cybersquatting. This law protects brands from the unauthorized registration of domain names that are confusingly similar to their trademarks.
Self-perceived victims can thus sue the registrant of any domain name infringing on their trademark rights. The plaintiff must demonstrate the defendant’s bad faith intent to profit from the unauthorized use of the domain, and that the name is identical to their business trademark.
Under ACPA, resolutions include court-ordered transfers of the disputed domain names to the trademark owners and monetary damages. In cases where the infringement is found to be willful, the court may additionally award statutory damages ranging from $1,000 to $100,000 per domain name.
Uniform Domain-Name Dispute-Resolution Policy
Established by the Internet Corporation for Assigned Names and Numbers (ICANN), the Uniform Domain-Name Dispute-Resolution Policy (UDRP) offers a cost-effective alternative to traditional litigation. It applies globally, allowing businesses and individuals to quickly resolve disputes over the registration and use of internet domain names.
The UDRP procedure starts when a trademark owner files a complaint against a domain name registrant. The complaint must articulate the grounds on which the domain is alleged to infringe upon the trademark right. Upon submission, an administrative panel reviews the complaint, considers evidence from both parties, and then issues a decision.
That ruling may include the cancellation or transfer of the disputed domain name to the complainant. If any party is dissatisfied, they can appeal through their respective national courts.
How to prevent cybersquatting
Now that you have a fairly thorough understanding of what cybersquatting is and how it manifests itself, it’s time to discuss how to prevent it. Doing so requires a multifaceted approach that includes technical and legal strategies.
By prioritizing the following, you’ll help reduce your risk of becoming a victim:
- Proactive domain registration: In addition to securing your primary domain name, find and register all the permutations that could be attractive to cybersquatters. You can search your domain name on DomainWheel to discover the closest variations that are available for registration. These include common misspellings, abbreviations, and alternative domain extensions.
- Trademark registration: By registering your brand as a trademark, you’ll reinforce its exclusivity and legal rights. Many domain dispute resolution policies, including the Uniform Domain-Name Dispute-Resolution Policy (UDRP), require complainants to demonstrate trademark rights as part of their claim.
- Domain monitoring: Use automated domain monitoring tools to pick up on any new cybersquatting incidents that might be infringing on your trademarks. You could try out services like PhishLabs, BrandShelter, or Skurio.
- Domain security: Enhance domain security to prevent hijacking and cybersquatting by implementing measures like DNSSEC for verifying domain ownership, WHOIS privacy to hide registration details, registrar lock to prevent unauthorized transfers, and domain expiration protection to avoid losing your domain name if it expires and you forget to renew it.
FAQs
Cybersquatting constitutes intellectual property theft or fraud, recognized under various national and international laws. It’s considered a cybercrime because it exploits the digital domain to infringe upon established intellectual property rights, potentially damaging the trademark owner’s reputation, business, or consumer trust
Perpetrators engage in cybersquatting for financial gain and to harm brand reputations. Their primary motivations include demanding exorbitant fees from trademark owners for releasing relevant domain names, selling those domains to competitors, or using them to redirect traffic to fraudulent websites that generate illicit proceeds.
Domain flipping is the buying of domain names with the intention of selling them for a profit. It’s all based on speculative investment, where the value is driven by market demand rather than trademark infringement.
In contrast, domain squatting is the registration of domain names that are confusingly similar to existing trademarks, with the primary goal being to exploit the trademark owner’s brand reputation.
No. Legal policies against cybersquatting consider not just visual similarity, but also phonetic resemblance and the overall likelihood of consumer confusion. What matters most is whether the domain name in question has the potential to mislead consumers.
Cybersquatting cases tend to examine even the registrant’s motivation. For the domain name to be ruled as cybersquatting, the complainant must demonstrate that it was registered with bad faith intent to exploit the trademark’s goodwill.
Final thoughts
Cybersquatting is one of those things where you don’t think it can happen to you…until it does. At the same time, it’s good to keep a realistic perspective on the practice.
The perpetrators who do it are typically motivated by money.
In other words, if you’re a small blog then the likelihood of becoming a victim probably isn’t too high. On the other hand, if you’re a profitable ecommerce store, then the odds against you start to increase.
Regardless of where in the attack probability spectrum you fall, it’s never a bad idea to follow the best practices that were outlined earlier in the “How to prevent cybersquatting” section.
For more domain security tips, advice, and general information, check out our full lineup of domain security articles.
