What is Cybersquatting?

While we often take comfort in the legal protection afforded to business names, brands or products courtesy of copyrights and trademarks, sometimes such protective measures fail to deter those with underhanded motives. One of the common complaints that arises within the industry concerns cybersquatting.

In this context, cybersquatting involves the registration of a domain by someone when they are ineligible to do so. More specifically, it is the “deliberate and abusive” registration of a domain name related to “marketable and trademark” terms. The registrant often uses the domain in bad faith and attempts to profit from this practice by: licensing or selling the domain to the trademark holder (usually, with a ridiculous mark-up); using  the incumbent’s name to promote their own business and compete against them; or by generating click-through revenue that has come from misdirected traffic.

Over the years, an abundance of cases have been brought to the attention of relevant authorities, both locally and abroad. From a global perspective, ICANN developed and administer the Uniform Domain Name Resolution Policy (UDRP). Locally however, the .au Dispute Resolution Policy (auDRP) governs proceedings.

Where companies or business owners feel that their trademark rights have been infringed by the use of another party that is not connected to the business, they should first initiate contact with the other party and clarify their respective position and legal coverage. As some cases may be attributed to a genuine mistake or lack of knowledge, this will assist in understanding the context of the registration. More commonly, the registrant may make it clear that they are unwilling to cooperate, or try to sell the domain to the party with trademark rights for an exorbitant sum.

In this case, the trademark holder may initiate proceedings per the auDRP guidelines. This approach will require the applicant of the dispute to pay for the exercise, where costs are dependent upon the number of arbitrators appointed to oversee the case. It’s also worth pointing out that cybersquatting is not restricted to names that specifically match that of the trademark holder. In fact, they may also relate to similar names, or those with a misspelling, as defined by the au Domain Administration – something we covered in one of our previous articles.

The lessons from this topic apply to both sides of the spectrum – on the one hand, if you’re a buyer, make sure you check that you’re not infringing on the rights of any other parties when you register a domain name. As a trademark holder, not only does it pay to lock away your domain name as soon as possible so you don’t have to incur expenses to acquire it, but you should regularly monitor the web to ensure your trademarks or intellectual property are not being used without your knowledge.

That’s it for this occasion, stay tuned for our next educational article. If you have any questions, don’t hesitate to contact us.

Best wishes,
The Netfleet Team


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