By Jim Farmer
Five years ago, Joseph Hill and his business partner David Edwards decided to launch a gay site called Fitlads. They didn’t do it to become millionaires — Hill’s goal was simply to share pictures online with his “mates.” For a while, everything seemed to go well. But then something unexpected happened. As Fitlads.net was starting to really take off, an unknown party registered Fitlads.com (which Hill and Edwards were now entitled to, having clearly established the Fitlads brand) and then demanded ransom money for it, setting the stage for a four-year battle.
This practice, known as cybersquatting, is becoming more and more common. In addition to grabbing domains which others have a right to, squatters also work to grab names as soon as they expire and an owner has forgotten to renew them. Some even use trickery and fraud to illegally transfer domain ownership. 1999’s Anti-cybersquatting Consumer Protection Act defined cybersquatting as registering, trafficking in, or using a domain name in bad faith to profit from someone else’s trademark. After obtaining a domain, cybersquatters then attempt to extort money from the rightful owners by asking them to buy the domains back at an outrageously inflated price.
In 2007, a record 2,156 complaints were filed with the World Intellectual Property Organization’s Arbitration and Mediation Center over cybersquatting and domain name abuse. That’s up 18% from 2006 and 48% from 2005. In addition, many cases
How these situations are resolved varies from case to case. Some victims end up meeting the squatter’s demands out of desperation, while others use intermediaries to resolve things. If you’ve got the money, it can be tempting to just pay them off. But if you do, it may not be the end. When you give money to a thief, there’s no guarantee that they will honor their word. The Anti-Cybersquatting Act provides recourse for these matters, but in order to file a claim a trademark owner must meet the following three criteria:
1. Trademark is distinctive or famous
2. Domain name owner acted in bad faith to profit from the mark
3. Domain name and trademark are identical or confusingly similar
Hill was shocked when he learned of the situation. “We never intended to use the .com name,” he said. “The .net extension was chosen because it sounded best.” When the site became the second largest website in the U.K. with more than 200,000 members, however, the .com name became an issue.”
“We contacted the people who had traded the Fitlads.com domain name, but most of the time the squatters didn't even return our calls or emails,” he said. “When the domain moved to yet another group of squatters, we were eventually asked for $300,000. It wasn't worth that much to us.”
After a long fight, Hill and Edwards prevailed. “Eventually the domain was sold as part of a portfolio acquisition to Ireit, who surrendered the domain to us, claiming they return domains that infringe trademarks,” he says.
Hill’s advice to those who would fight cybersquatters is to find an appropriate intermediary and to balk at the first price offered.
The question of domain squatting being a crime is not cut and dried, though. It’s a compex issue with offshoots such as typo-squatting, which involves reserving commonly misspelled variations of a well-known URL in order to steal traffic. While many people feel that cybersquatting is immoral, others see it merely as another instance of a business built on supply and demand in a cutthroat industry.
“I straddle both sides of the fence,” Hill says. “When domains bearing someone's trademarks are squatted, that's extortion. When domains are acquired before a trademark exists — or if it's a generic word or phrase — then I think that's fair game.” Despite having reclaimed their domain name, Hill feels the problem is getting worse. “In response to the introduction of new domain extensions, people are just squatting across the board — because they know companies want their names across all possible extensions,” he says. “We're not making progress. The problem is only worsening.”
Hill has learned his lesson and warns other domain owners to take precautions. “When you create a domain name, register it across all possible domains, including close typos,” he says.” You may regret not doing so later.” He also advises people to register their trademarks, because it makes any eventual legal battles much easier.
According to Better Whois the best way to protect against cybersquatting is to register a few variations of your business name before any damage can be done. The names that should be obtained include .com, .net, .biz, hyphenations, plurals, and common misspellings.
When choosing a registrar for your domains, it’s best to take your time. One of the best known registrars is Go Daddy, which offers rock bottom pricing and allows you to consolidate expiration dates across some or all of your domains so that they are more convenient to renew — which can come in handy if you’re managing a large number of domains.
