Cybersquatting on a popular brand name?

Domain name registrars usually work by the first-come-first-served policy. This means anyone can register any domain name and it is his because he is the first one to register it. This system has been working this way since the start of the internet, and it has lead to the creation of the domain trading industry.

However, companies holding trademarks and brands do object and in some cases even extort domains from domain holders, citing they have a right of ownership to it because it is their brand. This is how these people made up a new term – cybersquatting. Indeed if you are holding a brandable or trademark domain name, you should be aware of the issue and the possible consequences.

All this largely depends on the TLD and/or the country of the domain extension. For most ccTLD domains generally, nothing happens if the domain name is registered before the trademark, and not used for the same product or service as the later registered trademark.

I western countries cybersquatting on a popular brand name can get you a UDRP (uniform domain-name dispute-policy) within a year or two. Additionally, trying to sell it to the brand owner will accelerate this as they become aware of it faster. In the USA cybersquatting can also result in an ACPA action and you could get a court fine for up to $100,000 in statutory damages. Owning a domain name that later becomes a brand owned by someone else can result in a domain hijacking case.

So what can you do? Later registered trademarks can limit your use of a domain name. If you feel a domain name you own is brandable, valuable and at some point, someone else may own such a trademark – then apply to register a trademark with it. Your most valuable domains need a legitimate business around them. Even if your only intent is to sell the domain at a later time, you should develop it into a website, make it profitable and then sell it.

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We can all agree that cybersquatting is a term made by people that were upset about not thinking of registering a domain first. Companies may feel entitled to a domain name that is not used in a manner they feel is depending on their emotional, tactical, or financial desires. Next, they will invest effort into painting a negative picture about someone who is not making use of the domain name they want and if possible they would force him to relinquish the domain name. If you are ever in such a situation the best natural action you can take is spend a few dollars to talk to a consulting lawyer with experience in the matter.

Practical ways you can protect your domain names from cybersquatting claims are to use a parked page with some creative content, or a coming soon page. Do not be satisfied with a generic parking/coming soon page, but make it into a lifelike story of a coming website, as if you already have a project being developed with the intent of using that domain name.