April 28, 2009 Defeating cybersquatters: Protecting trademark rights on the Internet By ANDREW M. ABRAMS and ALEXANDER J.A. GARCIA, Fish & Richardson Many unsuspecting businesses in America are experiencing a slow and steady decline in their intellectual property rights due to the actions of an unwelcome Internet presence: the cybersquatter. Your trademark or brand can often be the most valuable asset in your intellectual property portfolio, so it is important to learn how your business can successfully defeat cybersquatters. Cybersquatters register domain names that are the same as or confusingly similar to existing brands. Similar to traditional "squatters," cybersquatters stake claim to unused Internet real estate, domain names, and refuse to leave without compensation. In the heady days of the mid-1990's Internet explosion, early cybersquatters gained notoriety for holding famous domain names hostage, often demanding exorbitant ransoms. Thus, the floodgates opened, triggering a wild stampede on domain name registrations as opportunists everywhere envisioned easy paydays. Over a decade has passed since the initial "gold rush" on Internet domain names, and the majority of domains that are identical to established trademarks have been taken. This fact has given rise to another nasty relative of the cybersquatter: the "typo squatter." Typo squatters register domains with a slight misspelling of a brand name in an attempt to capture careless Web surfers. While receiving a ransom in exchange for transfer of the domain is still a principal motivation for these individuals, many typo squatters are content to hold onto their domains in order to illicitly generate revenue. The most common method to achieve this is to host a "parked" Web page that contains advertisements and links to goods and services that compete with the brand- holder's business. Each click on a banner or link will result in cash to the typo squatter and ostensibly, the loss of a potential sale to the brand-holder. Typo squatters also may use their domain names to redirect Internet traffic to a competing Web site, again resulting in a loss of business to the brand holder. Along with this tangible harm, such activity causes significant damage to the targeted company's intellectual property rights. As consumers searching for an official company Web site are led to unrelated pages, the brand becomes increasingly diluted. This is especially true if consumers are led to believe that an unauthorized Web site is endorsed by or affiliated with the brand-holder itself, resulting in a diminishment of consumer trust in the brand. So what can companies do to combat this menace? Thankfully, in recent years, federal statutes, court rulings and administrative remedies have created numerous avenues to combat all forms of cybersquatting. With those new laws in mind, the following are some recommended courses of action: Be the first to register. Sometimes the best defense is a good offense. Domains can now be obtained for as little as $1.99 per domain. By registering all of the top-level domains (e.g., .com, .net, .info, .biz) that relate to any existing or planned brand names, you may be able to avoid a potentially costly encounter with a cybersquatter. Plan in advance to accommodate the inattentive Web surfer by registering domains with commonly misspelled words. In the long-term, this planning will save you both time and money Contact the cybersquatter. Through various online tools, it is generally possible to track down the individual who registered the domain. Have your trademark attorney send a cease and desist letter to the cybersquatter, informing him of your legal rights and requesting the transfer of the domain. If the cybersquatter complies, you can avoid a potentially expensive lawsuit. Administrative remedies. If the cybersquatter refuses to voluntarily transfer the domain, you may seek an administrative remedy. The Uniform Domain-Name Dispute- Resolution Policy (UDRP) is a low-cost administrative procedure designed to resolve cybersquatting issues. You must prove: 1) that the domain is confusingly similar to your trademark; 2) that the registrant does not have a legitimate interest in the domain; and 3) that the registrant registered the domain in "bad faith." A number of factors determine "bad faith," including whether the cybersquatter has attempted to sell the domain for profit, used false information when registering the domain, has a history of cybersquatting or receives revenue from advertisements posted on the Web page. The sole remedy following a UDRP victory is the transfer of the domain. Federal lawsuit. The Anti-Cybersquatting Consumer Protection Act (ACPA) allows trademark holders to bring a federal lawsuit against cybersquatters. Similar to a UDRP proceeding, the claimant must demonstrate "bad faith." A U.S. lawsuit is not always an available option against foreign-based cybersquatters, and generally is more costly and time-consuming than an administrative proceeding. However, one advantage of an ACPA lawsuit is that in addition to the transfer of the domain, a successful litigant may be entitled to monetary relief. Should you encounter a cybersquatter, an experienced trademark attorney can help you choose the best course of action. You, too, can defeat cybersquatters and protect the valuable goodwill in your company's trademarks. Abrams and Garcia are associates in the San Diego office of Fish & Richardson. Abrams' practice emphasizes trademark prosecution, portfolio management, client counseling and litigation. Garcia's practice emphasizes trademark and copyright litigation and new media and entertainment law.