Domain squatting is a type of cybercrime that is as old as the world wide web itself, but it’s still a serious cybersecurity issue that can be very dangerous for any business and individuals with an online presence.
Even worse, the cases of domain squatting (also known as cybersquatting) have also shown a substantial increase throughout the COVID-19 pandemic period.
In this article, we will learn what domain squatting is and how you can protect your business from being affected. By the end of this guide, you’d have learned about:
- What is domain squatting
- Why cybercriminals perform
- How to prevent cybersquatting.
- How to protect your brand’s reputation from cybersquatting and other forms of brand abuse.
Without further ado, let us begin this guide right away.
What is Domain Squatting?
Domain squatting, also called cybersquatting, is the practice of registering and/or purchasing domain names that are supposed to be owned by legitimate trademark owners with malicious intent to profit from the goodwill of this trademark.
People may register domain names that are related to a registered trademark without any malicious intent, and this is not considered domain squatting.
The legal limitations of whether a domain is registered in bad faith, based on the US Anticybersquatting Consumer Protection Act (ACPA):
- The intent of selling the domain name to the trademark owner’s competitor for a profit
- The intent of disrupt the trademark owner’s business in any way
- Purposely trying to block a trademark owner from obtaining the domain name
- Having the intent of confusing customers and attracting them from a competitor’s website.
In practice, it can be difficult to prove that a domain name was registered in bad faith. However, it is not impossible, and there are many cases where the legitimate trademark owner has successfully reclaimed ownership of a domain name via legal processes.
Unfortunately, although many countries all around the world have been pretty adamant in combating domain squatting/cybersquatting and have established many different legislative laws and acts in place, domain squatting is still a serious issue.
The Legality of Domain Squatting
At first glance, the concept of domain squatting might seem similar to buying a house or land that you expect to become valuable in the future.
However, that’s not really the case since, in domain squatting, we are dealing with trademarks and copyrights.
When buying a house for investment, the house and the elements within it are not trademarked. However, in the case of domain squatting, the domain squatter is blocking a rightful owner of a registered trademark from acquiring the domain name tied to this trademark.
Therefore, when someone owns a domain name that is substantially related or similar to a trademarked name, they have to prove their legal intent in owning this domain name, or else it will be considered bad faith registration with malicious intent.
In the early days of the internet, domain squatting was a prominent issue, the wild wild west era of the internet.
Now, however, there is legislation in most countries all around the world to protect registered trademarks, company names, and (with exceptions) personal names from domain squatting.
Protecting Your Business from Domain Squatting: Preventive Measures
While, unfortunately, 100% preventing cybercriminals and malicious parties from squatting your domain names is virtually impossible, there are some effective steps you can take to:
- Make sure it’s as challenging as possible for malicious parties to squat your domain names
- Securing the important foundations so you can easily reclaim the domain names in the event of successful squatting
They are:
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Register your trademarks
In the US and many other countries, there are two types of trademarks (and service marks): registered and unregistered.
An unregistered trademark is, simply put, a mark that has not been registered at the US Patent and Trademark Office or any of the relevant trademark offices in the state or country in which your business operates.
While technically, businesses with unregistered trademarks are still protected by laws concerning unfair competition and domain squatting, the protection can be more limited in certain situations.
With that being said, it’s better to be safe than sorry, and it’s recommended to register your trademark or service mark as soon as possible.
Being a registered trademark owner can significantly help in the event when you need to reclaim domain names via legal actions (more on this later.)
- Register your domain names as soon as possible
Again, it’s better to be safe than sorry later, and it’s best to purchase the domain names related to your brand, even before you need them.
Consider the fact that buying and registering a new domain name would only cost you around $10 to $10 per year, while the cost and time needed to reclaim a squatted domain name can be much more expensive than that.
Also, domain squatters often buy recently searched domain names in hopes that they’re going to be able to sell them to the searcher later. So, act as soon as possible when you find the domain you want.
Also, check with your hosting provider or domain name registrar whether they offer domain ownership protection. With protected registration, you can retain ownership even if the domain is expired or if there are attempts to transfer.
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Make sure you are the holder of the domain record
It’s crucial to understand that the registered domain information is ownership information.
A common practice is to ask your employees (i.e., a member of your IT team) to register your domain on your behalf. However, this practice is not recommended.
You’ll never know if the employee’s going to leave on bad terms in the future, and letting them register under their name essentially gives them the opportunity to hold your domain hostage.
Make sure the domain name is registered in the name of the company itself, or at least senior management or owners. Have at least two names on the registration, so when there are changes, both parties will be notified.
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Pay attention to domain expiration dates
Speaking about domain expiration dates, there are domain squatters targeting expired domain names so that when the owner forgets to renew, they can claim the domain for themselves.
If this is your main domain name and especially if you are using a reputable hosting service, typically, renewal won’t be an issue since the hosting provider would send several reminders before the actual expiration date.
However, if you are not sure whether you’d like to keep the domain name (i.e., if you are not sure whether to continue the business.), then we’d recommend renewing the domain name first (which, again, shouldn’t cost a lot) rather than having to spend more reclaiming the domain later.
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Invest in an anti-domain squatting solution
Thankfully, there are now software solutions and tools that are designed to help business owners combat cybersquatting, and you should leverage them to protect your business and your brand.
Red Points’ domain takedown service can help protect your brand from cybersquatting in three steps:
- Real-time detection of cybersquatting websites by scouring the search engines, domain databases, and social media.
- Reporting the fake domain and request for takedown by automatically contacting the domain registrant, server hosting, and CMS platform.
- Stopping repeat perpetrators by uncovering their identity and collecting data that may be required to take legal actions.
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Register variations of your domain name
To prevent domain squatting, we’d recommend having a portfolio of domain names and registering common variations of your domain names before others do so.
Here are a few tips:
- Consider registering the singular and plural version of your domain (i.e., “example.com” and “examples.com”)
- If your domain name has more than one word, consider registering it with hyphens (i.e., “thisexample.com” and “this-example.com”)
- List common mistypes of your brand name/domain name, and register as many as you can
- Consider registering multiple top-level domains (TLDs) for your domain names, at least the common ones (.com, .net, .biz, .org, and .info.) and the location-specific TLD of the country you are going to have business in (.us, .uk, etc. )
Reclaiming a Squatted Domain: Your Options
While preventing domain squatting is an ideal approach, unfortunately, it’s likely you won’t be able to completely prevent all these attempts.
Say your domain name is being cybersquatted, or there are cybercriminals launching a fake website impersonating yours with a squatted domain; what are your options?
Let’s consider the different scenarios:
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Contacting the website owner
Start by giving the website owner using your domain name the benefit of the doubt. There’s the possibility they registered a domain name that is similar to yours without any malicious intent, and probably it’s pure coincidence.
So, start by contacting the website or domain owner. Ask nicely and inquire about the situation. Be ready to present proof of trademark ownership if needed (but it’s best to wait for the initial reply first.).
You’d be surprised how sometimes it’s all just a misunderstanding, and the website owner might be willing to transfer the domain name ownership to you for free (at least, for a small fee).
Considering the legal process of reclaiming domain names can be lengthy and expensive, giving them the benefit of the doubt may be worth it.
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Handling extortion
If, after contacting the website owner, you’ve confirmed that this is indeed a domain squatting case, then ask them what they want. In many cases, they are only looking for money, so ask them how much they’d like you to pay before they transfer the domain name ownership.
If the domain name is set at a relatively reasonable price depending on your budget, it might be worth it just to downright buy the domain name rather than having to go through the time-consuming and expensive legal disputes.
However, the domain squatter can set their price as they see fit, and sometimes the asking price can be (very) high. It’s really up to how much the domain squatter thinks the domain name has to value.
The average domain sold by domain squatters ranges between $100 and $5,000. Thus, before you’ve committed to a purchase, do some research first and weigh whether the domain name’s price is really worth it. If the price is reasonable enough compared to the name’s value to your business, then it might be worth purchasing it.
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Taking legal actions
If you’ve exhausted all the other options and think taking legal action is your best approach, then the first thing you should do is to figure out the available legal options in your area.
If you happen to be in the US, then there are two legislative laws designed to protect your business from domain squatting:
- ACPA: Anti-Cybersquatting Consumer Protection Act, can force the transfer, cancellation, or forfeiture of the disputed domain name to the legitimate US-based trademark owner. Unfortunately, ACPA won’t be able to help you if you currently reside outside the US.
- ICANN: The Internet Corporation for Assigned Names and Numbers developed UDNDRP (Uniform Domain Name Dispute Resolution Policy), designed to help mediate international cybersquatting cases.
Legal actions under ACPA
ACPA facilitates US-based trademark owners to legally sue an alleged domain squatter in federal court, and successful legal proceedings can result in a court order for cancellation, forfeiture, or transfer of the disputed domain name to the legitimate trademark owner.
Depending on the case, the domain squatter may also be ordered to pay for money damages.
You can file a complaint under the provision of ACPA after you’ve prepared evidence of the following:
- The trademark or service mark owner (you) was the first to use the distinctive trademark in commerce
- That the disputed domain name is identical or confusingly similar to the trademark or service mark
- The malicious intent of the alleged domain squatter to profit from the squatted domain name
- The trademark or service mark was registered and distinctive at the time the disputed domain was registered.
Legal actions under ICANN’s UDNDRP
For international disputes, you can file a complaint under the ICANN’s UDNDRP (Uniform Domain Name Dispute Resolution Policy).
You’ll need to prepare evidence for the following:
- Proof that the domain name is identical or confusingly similar to your registered trademark (or service mark). Similarities must be beyond a reasonable doubt.
- The domain name has been registered with malicious intent to profit from the squatted domain name
- The alleged domain squatter possesses no legitimate rights or interests in the domain name.
Approved complaint under UDNDRP would force the transfer of the disputed domain name to the legitimate owner. However, unlike complaints under ACPA, you cannot seek financial remedies under ICANN.
Wrapping Up
Proactive prevention and protection of your brand by implementing real-time anti-cybersquatting protection like Red Points’ brand protection solution remains the best bet to protect your business from domain squatting without disrupting your workflow.
Domain squatting, or cybersquatting, can be a major threat for any business owner with websites and can cause long-term financial and reputational damages.
The actionable tips we’ve shared above can help you in protecting your domain and preventing domain squatters from claiming your trademarked domain names.
Additionally, by showing you the steps you could take in the event of domain squatting attempts targeting your business, by now, you should be aware of how to seek legal help to reclaim the domain name.
