What is cybersquatting? Cybersquatting, as defined by the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d)):
is the registration, trafficking in, or use of a domain name that is either identical or confusingly similar to a distinctive trademark or is confusingly similar to or dilutive of a famous trademark.
In simpler terms, cybersquatting occurs where one registers a domain name containing the trademark of another with the intent to profit from the sale or use of that domain name. Cybersquatting can be devastating to a business. Cybersquatters can divert valuable traffic and, in turn, sales, from a business through the use of the cybersquatted domain name. This is why Congress has seen fit to provide significant remedies to businesses injured by this practice. This includes the ability to obtain up to $100,000 in statutory damages and the transfer of the domain name.
Cybersquatting also applies to domain names that incorporate personal names. Specifically, if you have a valid cause of action if someone registered your name (or something confusingly similar to your name), without your consent and with the specific intent to profit from selling the domain name. Damages in personal name ACPA actions, however, are limited to your costs, attorney fees, and transfer of the subject domain name.
Cybersquatting Resolution Under the UDRP
Finally, cybersquatting can also be remedied under the Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP is an arbitration provision that is contained within every registration contract associated with the most top-level domains (i.e. .com, .net, .org). And when you register a domain name, the fine print of your registration agreement will contain provisions regarding this procedure. So, by registering most domain name, you also agree to be subject to the UDRP process. This is not a federal court lawsuit. Rather, it is an administrative proceeding before, in general, by the National Arbitration Forum or the World Intellectual Property Organization. The upside is that the cases are decided much quicker and cheaper. But, the downside is the relief is limited to the transfer of the domain only (no monetary damages).
Editors note: this page was originally posted in January, 2013. It has been updated for clarity and comprehensiveness.