Your domain is my domain: How to protect yourself from cybersquatting

Cybersquatting, i.e., the registration of domain names similar to a trademark already owned by someone, has existed for about as long as the Internet itself. However, even today, many companies are new to encounters with individuals who want to make money from the similarity of domains.

To successfully combat cybersquatters, it's important to consider their possible interest before registering a domain name for your website. What should you think about and what actions should you take? We explain in this article.

What is cybersquatting?

A person who registers domains that are consistent with someone else's trademarks is called a cybersquatter. Their non-cybersquatter counterpart, the common squatter, occupies a vacant building and asserts rights to it.

The principle remains the same, while the object is the humble ‘Domain’. Is there a company or brand name, but the domain consonant with it is somehow free? Then it needs to be occupied, sat on comfortably, and held until the owner who needs this domain name pays a ransom for it.

Simply put, cybersquatting is a type of entrepreneurial activity. Its goal: to be the first to find a potentially needed domain, register it for a standard symbolic value, and then resell it at a much higher price.

Types of cybersquatting

With many people wanting to make money on your website's domain or another company’s web resource, several types of cybersquatting exist:

Typosquatting or counting on user error involves registering a name one letter different from the original. If there’s a website example.com, registering exemple.com means some visitors will land there due to the typo. By displaying ads before they realize their mistake, you can make money.

Branded cybersquatting or counting on fame. A company has registered the domain example.ru, but it didn’t use example.com or example.biz. These will be registered by a cybersquatter.

Unsuccessful cybersquatting. An entrepreneur wants to launch a new product and announces his plans on social networks without registering the domain. The cybersquatter will get there first and the entrepreneur will have to pay more for the domain.

Cybersquatting with a trademark, which by law is worth more than the registered domain name. A site without a registered trademark finds a cybersquatter, who registers the TM for himself and, voilà, can now legally take away the domain through the court.

Drop domain cybersquatting involves domains not renewed in time by the rightful holder. Such a domain falls into a special section of the registrar's site, where the most promising quickly pass into the hands of entrepreneurs. When the owner remembers that the domain has not been renewed, it already belongs to another person.

Another phenomenon often confused with cybersquatting is called domaining. In this case, entrepreneurs use popular words in various industries without claiming a specific unique domain name. This is done expecting that someone wanting to create a new site will buy a favorable and easy-to-promote domain at a higher price.

For domains, words like business, photo, market, shop, and others are often used in various combinations. They also often take the surnames of famous people and names of settlements. The domain ivanivanov.ru could interest an entrepreneur with this name. Cityname.com with the name of a particular city is suitable for the site of its administrative structures or tourist portal.

How cybersquatters choose domains

Registering hundreds and thousands of unique domains with all kinds of typos and similar names is expensive. To keep his business afloat, it's important for a cybersquatter to choose successful combinations. To do this, entrepreneurs specializing in the resale of domain names often:

• Monitor situations in companies. For example, rumors of a merger between companies A and B. Therefore, a name containing fragments of each of their names is likely needed. Cybersquatters can register these before employees of the new large organization.

• Look for companies that already exist but don't have their own website yet. For example, those finding customers through social networks and other marketing channels. Domains consonant with their names are also bought for the future.

• Check the registration of a trademark on the company's domain name. The scheme of taking the domain from the owner is not always possible, but it still works.

Cybersquatting is real

Companies often believe those wanting to register a domain and resell it more favorably exist in a parallel universe. However, companies all over the world regularly encounter them.

Not all disputes over a domain arise for personal gain and fit the definition of cybersquatting. Sometimes the reason is the consonance in the names of two companies. For example, in 2014, the recruitment portal HeadHunter sued the Russia-based company HH&HR over the use of the domain hh-hr.ru. The court sided with the portal and ruled to seize the domain name in its favor. At that time, HeadHunter had no intention of using the domain name for commercial purposes.

But in 2017, Google sued Vitaly Popov over a case more akin to cybersquatting. The domain secret.ɢoogle.com was used to send messages saying "Vote for Trump" during the US election. The name differed from Google by just one letter. It started with an uppercase but small Latin "G", i.e., "ɢ", which in Unicode is denoted by the symbol 0262.

The battle between Italian clothing brand Lotto Sports Italy and Canadian David Dent for the domains LottoStore.com and LottoWorks.com ended with the latter winning. However, it was an epic two-part duel. The Canadian resident bought the two domains and planned to create gaming-themed websites. The clothing brand sued Dent and initially won. The court ordered the transfer of the domain names to the company. The Canadian appealed, and Lotto Sports Italy was eventually found guilty of reverse domain seizure. The company paid $237,000.

Cybersquatters and the law

No matter how dubious the activity of some squatters may seem, it doesn't negate the fact: cybersquatting is entirely within the legal field. It's not illegal to register domains and trademark names.

Yet the world is trying to combat cybersquatters. The main arbiter of domain disputes is the WIPO (World Intellectual Property Organisation), which unites 157 member countries. It has developed the UDRP — Uniform Domain Dispute Resolution Policy.

There are two ways for companies and brands that have faced domain name seizure: pay the amount demanded by the cybersquatter or go to court, where it's necessary to provide justification for their claims to the domain. For those slow to act, there's a third option: wait. If the domain name is rare and doesn't cause other market participants particular interest, the cybersquatter might eventually reduce the price. However, this is a path with unpredictable results.

Summing up: How to fight cybersquatting

It's important not only to know what cybersquatting is but also to think in advance about how to protect yourself from this phenomenon. A few simple rules will help:

• Check for a domain that matches the name of the company or brand before finalizing the name. Using an original, "off-the-beaten-path" name reduces the risk of domain disputes due to conflicts of interest.

• Don't publicize the brand or company name before the domain name is officially registered. Cybersquatters don't sleep! — Don't limit yourself to one domain when registering. It's better to choose several similar ones in different popular domain zones. This reduces the risk of someone creating dubious content on a similar domain.

• Register a trademark on the selected domain name immediately. This isn't a panacea, but in most domain disputes, its presence becomes a decisive argument for the court.

• Make timely payments for domain renewal to avoid dealing with squatters who quickly re-register drop domains to themselves.

If you can do all of this — it’s safe to say that you’ll be safe from the squatters!