Cybersquatting!? Here's What You Need to Know When Buying a Domain Name

By Sarah Malcolm
As a marketer I often have bought domain names that I love. I started my passion for buying good domain names back in the early 2000’s. Either for my personal blog, business, a business idea, or just a cool name I think I could somehow use in the future.

As a marketer I often have bought domain names that I love. I started my passion for buying good domain names back in the early 2000’s. Either for my personal blog, business, a business idea, or just a cool name I think I could somehow use in the future.

Long story short I was on the phone with one of my good friends and we thought of a great domain name to buy. After a few searches, I added it to my GoDaddy cart and I didn’t think twice and bought the domain name. BAM!... It went into the list of domain name I have parked in my GoDaddy account. Again, as I have done over and over.

About 6 months later, I get a letter in the mail from law offices representing a BIG brand. At first, I totally thought it was a scam. First, because why would one of the biggest brands ever think I am a threat?; and second, I don’t have a business that has anything to do with that brand. So I quickly did a Google search to see if this was legit. I couldn’t find anything. So I sent it to a few of my friends with law degrees and said "whatcha think?".. "Is this legit?" To my surprise, everyone said yes. I was so confused. I only own a domain name, that I am not using in any way shape or form, and I am getting sued? What about GoDaddy? They said it was available to register. I called GoDaddy to see if it was legit, and they confirmed it was. Oh no… Am I getting sued by one of the largest brands ever?!? Wait that is kind of cool, right? Ok, maybe not. After getting more information and talking with their lawyer, I handed over the domain name with no issues. I do NOT want drama. Right? I also called GoDaddy to get a refund and they said it was basically not their problem… Eye roll.

Um, I did not get the memo that you can’t freely buy available domain names without the potential of getting sued. WHAT!?!? Every marketer and entrepreneur must know this right? Um, wrong. Everyone I asked had NEVER heard of this happening.When I spoke to the lawyer they said they contact people weekly on the behalf of companies wanting anything that sounded close to their trademark to be handed over immediately.

So I continued to Google and found a few of the latest on“Cybersquatting.” YES that is a thing. The Prince estate filed lawsuit over cybersquatting of, A family of Green Bay Packers fans sitting on a website domain name, which they offered to give up in exchange for cash, lifetime season tickets, and Microsoft Surface Pro tablets, lost a dispute with the NFL franchise and the tech giant, and the Daily Harvest, a New York–based frozen-drinks company, says it was being “extorted” by internet squatters who are allegedly directing potential customers to President Donald Trump’s campaign site when all they wanted was a yummy smoothie. LOL!

Also, think twice before purchasing a domain name or trademark because you could offend an entire country! Recently, Japan politely asked Kim Kardashian to rebrand her Kimono trademark. The mayor of Kyoto City, Daisaku Kadokawa has penned an open letter to Kardashian, inviting her to visit Japan to experience “the essence of Kimono Culture” in hopes that she will reconsider use of the term in connection with her shape wear line. Wow this can really go wrong… and fast.

So I asked some of our lawyer friends at Tucker Ellis LLP, who represent some really iconic brands to help us out and understand why and what has changed in the past few years. We as marketers need to understand these things before running to GoDaddy and buying any domain name that is available.

Sarah: Thank you for taking the time to help us understand the law behind purchasing a domain name and understanding the implications behind that. Can you help us understand what has changed and why can’t we buy any available domain name?

Tucker Ellis LLP: Sure. The short answer is when buying a domain name, you are entering into a contract. In that contract you agree that it is your responsibility to determine whether that domain name registration infringes or violates someone else’s rights. That’s why GoDaddy told you it’s not their problem.

Sarah: What is Cybersquatting and why is it illegal?

Tucker Ellis LLP: Cybersquatting is when someone registers a domain name with a bad faith intent to profit from the goodwill of someone else’s mark. The Anti cybersquatting Consumer Protection Act(ACPA) became law in 1999, and it allows mark owners to reclaim control of domain names that are identical or confusingly similar to a mark if that that domain name was registered, used or trafficked in, with a bad faith intent to profit from the goodwill of a mark. Importantly, the mark owners can also recover damages (up to $100,000 per domain name, and their attorneys’ fees).

There’s also an arbitration option available to trademark owners called ICANN’s Uniform Domain-NameDispute-Resolution Policy (UDRP). When you purchase a domain name, you agree to this policy in your contract with the registrar.

There are many ways that the use of a trademark in a domain name can be considered bad faith. This includes using it to redirect to your own commercial site, hosting a parking page with commercial links, or even passively holding the domain name. The classic example is when someone purchases a domain name with a trademark and then attempts to sell it back to the trademark owner, and this has been going on for a long time. Back in 1995 (before the ACPA existed), Panavision successfully sued a cybersquatter who had registered 200 domain names, including many different trademarks and offered to sell back to Panavision.

Sarah: What can people do when searching for a domain name do to prevent finding themselves potential in a legal situation?

Tucker Ellis LLP: When you select a domain name, there’s probably a reason why you selected it. You should ask yourself, “Why do I think this is a good domain name?” If the answer is related to the value of someone else’s mark or name, then it’s probably not ok. Another helpful step is to search the US Patent and Trademark Office’s online database of marks.  

Sarah: So what about those who bought domain names years ago and are waiting to sell it? Are they at risk as well?

Tucker Ellis LLP: Yes. Both the ACPA (federal law) and the contractual provision from the registration agreement still apply.


Sarah: Anything else you think our audience should know before going to buy an available domain name?

Tucker Ellis LLP: Always make sure your contact information is accurate and current; that’s another thing that you agreed to do in that registration contract that you likely didn’t read! That way if there is a problem with the domain name in the future it’s easier to contact you (making it less likely that the matter will escalate).

Lastly, it’s helpful to know that mark owners (and their attorneys) aren’t generally looking for a fight; they have a job to do and they want to resolve matters as quickly and efficiently as possible. So respond to emails, phone calls or letters. Be polite and professional (no sense getting all worked up – and it won’t changes the facts at issue). Lastly, if you’re not sure about your rights ask an attorney.

Sarah: If you own a trademark and you see others using a similar domain name what can a company do to enforce their rights??

Tucker Ellis LLP: Call an attorney! And specifically, call one who specializes in this area of law. Your cousin Vinny (who practices traffic ticket law) likely isn’t a good lawyer for this matter; find someone who handles these types of matters.

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