The Threat of Cybersquatters

Imagine if in the early days of the Internet boom someone other than Bruce Springsteen himself had purchased the domain brucespringsteen.com. Now imagine that that person used the website to use Bruce Springsteen’s name and image in some way to make money. You actually don’t have to imagine any of that because it really happened. The person who bought that domain was accused of cybersquatting — but successfully defended their case in court, which is presumably why the official Bruce Springsteen website is brucespringsteen.net.

But that’s the gist of cyberquatting: Snapping up a domain before another person or company does in the interest of leveraging it for profit.
Cybersquatters are, in short, the people who got there first on a given domain name and, by buying it, hold its title. But what separates a cybersquatter from an innocuous domain owner is that they have no intention of using the domain for legitimate purposes.

What separates a cybersquatter from an innocuous domain owner is that they have no intention of using the domain for legitimate purposes.

There are essentially two categories of cybersquatters. First, there are those who buy domains to essentially hold them for ransom, hoping that more legitimate prospective owners will buy be forced to buy them. The pressure to buy such sites can increase if they are used in ways that will embarrass the legitimate owner. Two years ago the governing body of Internet domains released a new field of domains, including .xxx. This promptly set off a flood of cybersquatting and a corresponding wave of legitimate purchases in an attempt to head them off in an effort to avoid what happened to the University of Colorado, which was left red faced when colorado.xxx became a porn site, prompting lots of other major universities to buy up .xxx domains that could remotely be affiliated with their names to avoid similar fates.
The other kind of cybersquatting revolves around profiting directly from another’s identity by using the names or images of corporations or well-known individuals to essentially mislead consumers into giving them money. Eminem one a landmark suit against a company selling ringtones through eminemmobile.com nearly a decade ago, and Gucci recently won a $144.2 million suit against a group of similar sites that was selling counterfeit merchandise.
The trouble with cybersquatting is that there is a gray area between the legal and illegal, as seen with Bruce Springsteen. In that case it was determined that the owner of the site wasn’t trying to profit off of Springsteen’s name or image, which played a big hand in the determination of that case.
For obvious reasons cybersquatting is a bigger threat to corporations than individual users. But those corporations also have a leg up in winning disputes, which are handled by the Internet Corporation for Assigned Names and Numbers, because of their trademark rights. Individuals who own their own companies or have their own personal websites should make sure they own any domains affiliated with their names or ones that they may wish to use in the future, and they should also be diligent about renewing those domains before they expire, lest they fall into the wrong hands.