In the early 1990’s before the dot.com craze, a young entrepreneur named Ray Sozzi started his company Student Advantage. His company sold student advantage discount membership cards to the higher education market. In a stroke of genius or good fortune, he decided to secure several domain names for his business. One of the domain names he purchased was sam.com. Can you guess which large corporation may have wished to have purchased that domain first? Wal-Mart I am sure was not pleased to discover that sam.com was already used. To this day, Sam’s Club does not own that domain. Ray Sozzi is able to use that domain name because his intent was to use it for his business. If he had not bought the domain name for this intent, then he would have committed cybersquatting.
What is cybersquatting?
According to Wikipedia, cybersquatting is registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. During the dot.com era when companies were first starting to create online presences to market to consumers, some people started taking advantage of the domain real estate. These people realized that they could buy domain names that contained brand names of well-known corporations before these companies did. Then when the companies went to purchase their domains using their brand name as the domain, they would discover it was already taken and have to buy the domain from these people at a much higher inflated price. This is called cybersquatting. Those people were cybersquatters. It is now illegal to cybersquat thanks to the Anticybersquatting Consumer Protection Act (ACPA) passed in 1999.
Even though cybersquatting is illegal, it is still happening today. When this happens, companies can protect their trademarks by contacting a trademark attorney. The trademark attorney can send a cease and desist letter to the cybersquatter letting that person or company known that they are infringing on a trademark. The trademark in this case is the brand name. If offending company ignores the cease and desist letter, then the trademark company can sue them in federal court.
However, the trademark company must be certain that they can prove that the cybersquatter is indeed cybersquatting. Here is list of requirements that the ACPA states must be proved in court.
1) Company or person(s) had a bad faith intent to profit from the mark
2) Company or person(s) registered, sold or used the domain name that is identical or confusingly similar to a distinctive mark
3) Company or person(s) registered, sold or used the domain name that is trademark protected
If trademark owner believes their domain name was cybersquatted, then this company should contact a trademark attorney. Trademark attorneys can assess whether there is a case for cybersquatting. If there is, the trademark attorney can take legal action on trademark owner’s behalf.