It’s frustrating when the domain name you want has already been registered. You spent ages dreaming up the perfect name for your website, business, or blog, only to find someone else got in there ahead of you and snapped it up—aargh!

When this happens, there are two roads available. The first is to try and buy the domain from the current owner.

A second option that some companies choose is to call their lawyer. They ask, “Is there any way I can get this domain from the current owner because they’re cybersquatting?”

The answer is usually ‘no’. It’s only considered cybersquatting in limited circumstances.

Cybersquatting Defined

Cybersquatting refers to registering domain names in bad faith to take advantage of a company’s trademark. For example, registering a domain name with Coca-Cola in it.

Registering domain names with plans to sell them to someone else isn’t cybersquatting unless it targets a specific company and its trademark. In fact, many people register generic or descriptive domain names with hopes of selling them. These domain investors don’t target trademarks and therefore are not cybersquatting.

Making a Cybersquatting Claim

There’s an easy way to recover a domain name that is cybersquatted: the Uniform Domain Name Dispute Resolution Policy (UDRP). Everyone who registers a .com, .net, .org and some other domain names agrees to be bound by UDRP.

When someone makes a claim of cybersquatting using UDRP, a panel of experts will determine if the case has merit. If the panel determines that it is a case of cybersquatting then it will order the domain name to be transferred to the owner of the trademark.

Five organizations handle UDRP cases. They typically charge about $1,000-$1,500 to review the facts. Fees can be higher depending on the circumstances. For example, fees are increased if the owner of a domain name decides he or she wants a three-person panel to review a case (rather than just one person).

UDRP is a faster and cheaper way to resolve a cybersquatting dispute than turning to the courts. However, the United States also has the Anticybersquatting Consumer Protection Act if a company would prefer to file a lawsuit.

What You Have to Prove

In order to win a UDRP case, you have to prove three things.

The domain name matches or is confusingly similar to your trademark.

There are two types of trademarks you can use in a UDRP to prove this.

The first is a registered trademark filed with your government organization, such as the U.S. Patent and Trademark Office. Note that a pending application does not count; the registration must be granted.

The second is a “common law trademark”. This basically means you have rights in the term that aren’t registered with a government authority. UDRP panels require a lot of supporting evidence for anyone claiming common law rights in a mark.

Panels also want supporting evidence of rights when a trademark is on the supplemental register or is a design mark (such as a logo) rather than just text.

2. The owner of the domain doesn’t have rights or legitimate interests in the domain.

You need to show that the person or company that owns the domain doesn’t have a reason to own it other than to infringe on your rights. Some of the ways a domain owner can show rights or a legitimate interest include:

The name matches the owner’s personal nameThe owner has a trademark or common law rights to the domainThe owner created a website on the domain that does not infringe your trademarkThe name is generic or descriptive and was registered for resale but not to infringe your trademark

3. The domain was registered and used in bad faith.

This is a key element that is often the most disputed part of a cybersquatting case.

Note the word “and” in this part of the UDRP. You have to show that the domain registrant registered the domain in bad faith after you obtained your trademark rights.

If the owner registered the domain before you had trademark rights, then it’s not cybersquatting because there’s no way they could have targeted you when they registered the domain. This means that if you come up with an idea for a new name today and someone else owns it, that person isn’t cybersquatting.

Even if your rights predate the domain registration, you need to show that the registration targeted your company. If the domain is a dictionary word or lots of companies use it, it will be difficult to prove that your brand was targeted.

UDRP Panels often consider how the domain was used. Keep in mind that your trademark is only for certain goods or services. If you have a trademark for “Blue” for a restaurant, and the domain Blue.com is being used for something that’s not a restaurant, then the owner isn’t cybersquatting on your brand.

There’s No Going Back

Before you file a dispute under UDRP, keep in mind that it opens you up to some liability.

Filing a case in abuse of the policy is called reverse domain name hijacking. Panels often decide it’s reverse domain name hijacking if you file a bad case, such as one in which your trademark rights came after the domain owner registered the domain.

There’s no financial penalty if a UDRP panel finds you guilty of reverse domain name hijacking. However, the domain owner can sue you in court and get a penalty of up to $100,000.

Domain name owners can file a lawsuit even without a panel finding of reverse domain name hijacking. Court decisions overrule UDRP panel decisions–and can cost you a lot of money.

Another reason to be cautious is that losing a UDRP means it will be much more difficult to negotiate a purchase from the domain owner.

A common occurrence is that a company tries to buy a domain but doesn’t like the asking price. It files a UDRP and loses.

As you can imagine, the domain owner probably won’t sell for his original asking price after a company tried to take the domain through UDRP!

The Bottom Line with Cybersquatting Claims

If you think you want to challenge someone’s domain ownership, it’s crucial that you take the time to understand what qualifies as cybersquatting and what doesn’t. Consult a competent attorney that specializes in UDRP before filing a case.

If you are starting a new business then you don’t have a cybersquatting claim. So consider finding an available domain name or buying a domain name in the aftermarket.

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