Cybersquatting is generally defined as the situation where a person or business entity purchased a domain name solely for the purpose of reselling the domain to the highest bidder. Implicit in the purpose of the purchase is to hold the website for ransom rather than using or developing it. Since 1999, cybersquatting, also referred to as "reverse domain hijacking," has been an illegal activity worldwide.
In general, a plaintiff must show that the domain name registrant has absolutely no "legitimate interest" in using the domain name and that the domain name registrant has acted in "bad faith" to deprive the potential legitimate owner use of or profit from the domain name. Thus, put simply, to make a claim the individual must show no "legitimate interest" and a "bad faith" motive.
Legitimate Interest: Legitimate interest, in this context, generally means a "reasonable business or professional purpose."
Bad Faith: Bad faith is generally interpreted to mean the registrant has tried to sell or manipulate the domain so as to make a profit on it. The term is ambiguous in any area of the law, and in cybersquatting law it’s no different. Fortunately, the courts have provided some clarity. In this context bad faith is determined by:
- Previously owned trademark or intellectual property rights of both parties in the suit.
- Extent to which the domain name consists of the legal or common name of an identifying person.
- Use of the domain name for actual true sales of good and services. Use of a domain for sales and services generally indicates good faith use of the domain name.
- Use of domain name for noncommercial or fair use purpose. If a domain name for commentary and educational purposes may indicate good faith use of a domain name.
- If the domain name registrants intent to divert consumers away from valid mark owner.
- If the domain name registrant’s intent to offer for sale, transfer, or otherwise assign the domain name
- Looking at a individual domain name registrant’s acquisition of multiple similar domain names for unfair use
Cybersquatting law is well settled worldwide. Courts tend to have little patience for cybersquatting, and are quick to hand down rulings and penalties to curtail this practice. If you believe you have a reasonable claim to a domain name which another person in squatting on, you should consider contacting an business lawyer immediately to file suit against the squatter.