Cybersquatting is a derogatory term used to describe the practice of registering and claiming rights over internet domain names which are, arguably, not for the taking. The cybersquatter then offers the domain to the rightful owner at an inflated price, an act which some deem to be extortion.
Often, cybersquatters take such names and offer them for sale to the person or company who should rightfully have the domain under trademark laws. They usually ask for a high price, much greater than the actual cost of the domain when it was available. Some cybersquatters put derogatory remarks on the registered domain about the person or company it is meant to represent in an effort to encourage the subject in question to buy the domain.
Many cybersquatters register most variants of a domain as well to prevent the subjects from registering them instead. For example, a cybersquatter squatting on eFingernail.com may also squat on eFingernail.net , ElectronicFingernail.com , ElectronicFingernail.net and many other logical variants which they can devise.
Domain name disputes are typically resolved using the Uniform Domain Name Resolution Policy ( UDRP) process developed by the Internet Corporation for Assigned Names and Numbers (ICANN). Critics claim that the UDRP process favors large corporations and that the decisions reached often go beyond the rules and intent of the dispute resolution policy.
Court systems can also be used to sort out claims of cybersquatting, but jurisdiction is often a problem, as different courts have ruled that the proper location for a trial is either that of the complainant, the defendant, or the location that the server through which the name is registered is located. People often choose the UDRP process because it is generally cheaper and usually much faster than going to court, but courts can and often do overrule UDRP decisions.
Some countries have specific laws against cybersquatting beyond the normal rules of trademark law. The United States, for example, has the U.S. Anticybersquatting Consumer Protection Act (ACPA) of 1999.
Under UDRP policy, successful complainants can have the names deleted (which often means another person will just register it again) or transferred to their ownership (which means they must pay yearly renewal fees on the name or risk that it will drop and be registered by someone else). Under the ACPA the cybersquatter can be held liable for acutal damages or statutory damages in the amount of $100,000 for each name found to be in violation.
There have been several instances of companies, individuals or governments trying to get domain names away from their current owners by making false claims of trademark violation. Sometimes they are successful. This practice is called reverse-cybersquatting.
The term cybersquatting has sometimes been inaccurately used to refer to people who purchase a large number of domain names in general or to anyone who tries to sell a domain name.
See also typosquatting.
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