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Domain Squatting

Domain Squatting: What is it & How Do You Deal With it?

Joanne Mafunda Moyo

Joanne Mafunda Moyo

24 July 20234 min read

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Domain Squatting

Domain squatting, also known as DNS squatting or cybersquatting, is a constant headache for many enterprises—startups and established businesses alike are all at risk. But what is cybersquatting, and how does it affect your business?

Domain squatting explained

Imagine going on Google to search for your business website, and instead of your page popping up, you’re redirected to a website with a similar or identical domain name to the one you use.

Yes, disbelief and anger will likely be your first response.

And no, you’ve not fallen victim to a virus.

What has likely happened is that an individual or business (domain squatters) has targeted your business name and decided that they’re going to steal your online identity for various reasons, including getting ad revenue or charging you to get your business name back.

This is a nightmare for domain owners.

And unfortunately, domain squatting isn’t entirely illegal. But there are steps that you can take to resolve this situation, one of them being the Uniform Domain Name Dispute Resolution Policy (UDRP) and the Uniform Domain Name Dispute Resolution Policy (Rules) set up by ICANN.

It’s essential to educate yourself, as some people make money from registering domain names.

What is the UDRP?

Under the UDRP, ICANN regulates the dispute-resolution service providers (DRSP) who handle the process of domain name disputes.

So, before registering your domain name, you need to ensure that your registration is in line with the UDRP’s terms—one of which is the requirement that all domain name holders submit to a mandatory administrative proceeding if someone claims their domain name was obtained wrongfully.

What are the criteria used to identify a domain name dispute?

The complaining party has to prove the following:

  1. That the squatted domain name is identical or confusingly similar to their business name, trademark, or service mark.
  2. That the offending domain owner has no real interest in the domain name.
  3. That the squatter registered and is using the domain name in bad faith.

But what if it was an honest coincidence that you have a similar domain name to another business? In this case, if you receive such a complaint, you can challenge it by showing that:

  • Before receiving the notice of the dispute, you used the domain name legitimately for selling goods or services.
  • Your business has been commonly known by that squatted domain name.
  • You haven’t been trading using the domain name, or you have fair use of the domain name without any intent to derive commercial gain, misleadingly divert consumers, or tarnish the complainant’s mark.

How does the UDRP identify bad faith domain use?

Let’s explore domain squatting laws and how the UDRP deals with domain squatters.

If you’re the owner of a domain name that is being investigated, these are the four circumstances that the UDRP considers to be bad faith:

  1. If you registered the domain name as part of a plan to sell the name to a business or an individual that owns the trademark, or the owner’s competitors.
  2. If you acquired the domain name to prevent the trademark owner from using it in a corresponding domain name. The complainant, however, has to present evidence that proves this argument.
  3. If you registered the domain names to disrupt a competitor’s business.
  4. If you acquired the domain names intentionally to attract internet users to your website by creating a likelihood of confusion with the trademark owners.

If the panel appointment by the DRSP determines a domain squatter wrongfully obtained the domain name, it can be canceled or transferred to the complainant. It’s hard to prevent domain squatting, but you can handle it.

The UDRP Proceedings

Before initiating a UDRP proceeding, the panel usually sends a letter to the domain name owner demanding a transfer to the rightful owner. If the offending owner refuses to respond to the letter, this is evidence that they are acting in bad faith.

It’s also important to note that good faith domain use that results in a likelihood of confusion with a registered trademark should not be transferred in a UDRP proceeding. Here are the steps to starting a UDRP proceeding:

  1. Starting a UDRP proceeding is quite simple. To file a complaint, you must submit a form online to any provider approved by ICANN.
  2. The complaint and any annexes need to be submitted in electronic form.
  3. The complaint may relate to more than one domain name, provided the same domain-name holder registers the domain names.

Don’t take domain squatting lightly

Domain squatting can severely impact your business and even tarnish your reputation. Dealing with the issue promptly, ideally with the help of an intellectual property attorney, will help prevent any serious problems with domain squatters.

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