I have just discovered that there are two separate people out there that have registered domain names using a product name I invented and trademarked. One of them is squatting, while the other is actually selling my product on the domain, thus causing me financial loss.
How can I get them to stop and hand over the domains?
The issue of domain squatting is a voluminous one. There are a number of issues we will look at. Let’s start with why these squatters do it. What are some of financial motivators behind this?
Monetizing your goodwill by selling advertisements.
The simple need to get traffic to a website is the foundation of multiple marketing related industries, the source for millions of jobs, and even the way many companies and small website owners operate.
This particular scheme, which some might consider insignificant by the numbers, might be considered a huge detriment to some businesses. The idea is that all of the advertising and relationship building that you have done offline, will lead some to search for your company or product. Because the search keywords might match the domain, unknowing customers will click on it in the search results. The higher the “click through rate”, the higher up the search results.
In some owner’s eyes, every single marketing or outreach dollar spent offline can be taken advantage of by online squatters because they exploit the “name” trust of your brand online.
Once the user enters the site, they may just have nothing but advertisements or paid links. Thus, as users are searching to research or buy your product/service, they may end up going to a competitor who is advertising on that page.
Monetizing your goodwill by selling your or related products.
Others will actually set up a functional shop, and act as unauthorized resellers (or in some cases, authorized resellers will use this technique which is either unauthorized or not specifically allowed/endorsed) of your real product. Other times, they can sell off-brand, knock-offs, or competitor products.
Competitor harm and redirection.
I would not doubt for a second that there are hundreds of similar stories, in which company “Blue”, who was a long time competitor with company “Red”, bought many domains that sound like it should belong to Red (“redscalifornia.com, redheatingcalifornia.net, etc) and then put up derogatory, or inappropriate information. Another scenario is simply for Blue to buy “redheatingincalifornia.com” which just simply redirected the customer to “bluesheatingcalifornia.com”.)
Holding ransom.
This is the most commonly publicized use of cybersquatting, which involves a profiteering squatter to purchase domains they know a particular business would rather own, and then wait to charge exorbant fees in order to purchase it. Of course, while they’re waiting for the company to fork over 10-20x what might be considered reasonable, they can monetize the site using any of the strategies above, or even put up harmful or negative information to force a company to buy sooner. In any particular case, any of these tactics could be combined.
It May Be Innocent
We should take a moment here to remind you that sometimes there are coincidences. Perhaps your competitor didn’t buy “Danstractors.com”. Maybe there is another Dan’s Tractors on the East Coast whom you’ve never heard of that bought the domain first. In other scenarios, the website has been being used for other purposes, and is not clearly tied to your business.
In one of the funniest cases of a trademark infringement case, is Microsoft’s reaction to MikeRoweSoft.com. The story can be found here.
What To Do
Most of the time it is recommended to just try and work things out civilly with a squatter. There are multiple strategy guides, blog posts and discussions available online for free that deal with how to approach this. What we will talk about is our area of concern: Legal action. In some cases, you might either not want to try and work things out, or due to the positions of either (or both) parties, you find yourself unable to come to an agreement and want to enforce your trademark legally.
UDNDRP
The Internet Corporation for Assigned Names and Number (ICANN) is a nonprofit corporation that handles issues like this internationally (except for certain countries which have their own resolution processes.) A program of ICANN is the UDNDRP, or Uniform Domain Name Dispute Resolution Policy.
As a trademark owner, you can actually submit your complaint to them. You need to prove that the domain name is identical or “confusingly similar” to your trademark, and that the current owner of the domain does not have any legitimate interest, but rather was using it in bad faith.
The cost of this process can range from $1000 – $2000, and most of their cases are resolved within 2-3 months.
Trademark or Cybersquatting Lawsuit
You can either go directly to filing a lawsuit, or use a lawsuit in the case that you are not satisfied with the results of an UDNDRP case.
This route will most assuredly be more expensive, and take longer to resolve. However, a court can require one domain holder to hand over registration. You will have to work with a lawyer to assess your case, and determine if it is better to approach it as a trademark infringement case, or a ‘cyber squatting’ case (which relies on the federal 1999 law, Anticybersquatting Consumer Protection Act.)