Online visibility has become indispensible for a successful business. Domain names are offered for sale on a ‘first come, first served’ basis with very little information required from the registrant. This characteristic of domain name registration has led to cybersquatting. Cybersquatting can be defined as registering, trafficking in, or using a domain name in bad faith with the intention of making profit from a well-established trademark or trade name of another person. In most cases, the cybersquatter then offers to sell the domain to the rightful trademark owner at a price, knowing the value that such a domain name would hold for the owner.

History

The seeds of cybersquatting were sown when the use of internet for commercial purposes commenced. Many business enterprises did not realize the importance and relevance of internet and either completely ignored it or simply resisted the need of utilizing it as a valuable business tool. Many well-established corporations including Panasonic, Hertz and Avon were not initially savvy about the commercial opportunities on the internet. Cyber squatters took full advantage of this situation and registered identical/similar domain names of business entities. Unless an identical domain name had been registered, domain name registrars were obliged to register them. Once registered the domain name could not be registered even by its rightful owner.  

The ICANN and the UDRP:

On 24th August 1991, the Internet Corporation for Assigned Names and Numbers (“ICANN”), an international body that manages the global domain name system, established a Uniform Dispute Resolution Policy (UDRP) to curb the registration of domain names in bad faith. One of the key and essential features of UDRP is that that it provides an effective, streamlined framework for expeditious, low cost, online resolution of domain name disputes from anywhere in the world and without the barriers of territorial jurisdiction.    

Forms of Cybersquatting:

The nature and complexity of cybersquatting has changed over the years.  Amongst many others, the following are some of the most common and prevalent forms and variations of cybersquatting:

  • “Creative Extortion”: This is a basic form of cybersquatting, wherein a cybersquatter takes advantages of the delay or ignorance of the owner in seeking registration of a domain name  and  registers it in bad faith  with the intention of selling the registered domain name back to the owner at a price.
  • “Typosquatting”:  In this case, a cybersquatter registers a domain name which is a common misspelling of a trademark (E.g. www.cokacola.com)  or a word which may result when a user makes a typo error while entering a web address, owing to the proximity of the keys on the keyboard (E.g. www.xocacola.com). The typosquatter waits for visitors who incorrectly type in the domain name of the trademark owner, and hence internet traffic gets diverted to the illicit website of the typosquatter. A cybersquatter adopting this form of cybersquatting does not have the intention of transferring the domain name to the actual trademark owner or of extorting money from the cyber squatter.  It is also not necessary that the products/services offered on the typosquatter’s website compete with the actual trademark owner’s website.
  • Email hijacking: This is one of the most dangerous forms of cybersquatting wherein the cyber squatter uses a name to divert confidential email communication exchanged by and between   employees of a business enterprise. By registering variations of a corporate domain name which is used for corporate email, the cyber squatter attempts to gain access to highly confidential information of either the customers of the business or of its employees. This can be highly detrimental to the overall affairs of a business enterprise and can have far reaching damaging consequences.
  • The “affiliate fraudster”: Some companies offer what is referred to as an “affiliate programme”, by way of which they pay commission to a person who signs up as an affiliate for every sale that the affiliate makes through his website. In such cases, cybersquatters register a domain name that is deceptively similar to the Corporate’s name and thereby try and earn commission by diverting traffic through the illicit website.
  • Defamatory Cybersquatting: Some cybersquatters attempt to induce the trademark owner to purchase a domain name from them at an inflated price by putting up defamatory remarks about the trademark owner.

Dishonest adoption of brand names, their use in bad faith and the resultant confusion and deception in the minds of the consumer can result in disastrous and damaging consequences and all the more when it occurs online on the internet, where a domain name takes a consumer to a website which he believes to be authentic and belonging to the rightful owner.