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Protecting Your Business from Cybersquatting

Monday, 28 January 2013

The internet has evolved to become an integral part of everyday life and businesses have been compelled to evolve with it. Many utilise it as a powerful marketing and communication tool by creating an online presence while some companies now only trade online.

Although the internet may be great for businesses, it also provides opportunities for those wishing to cash in on others’ intellectual property. One particularly pervasive problem has been cybersquatting.

What is Cybersquatting?

Cybersquatting is the practice of registering of a domain name that is already commercially viable with the intention of selling it, or profiting from its use. The most frequently targeted domain names contain common words, the names of celebrities or those of an existing business, including slight variations. Some cybersquatters even try to snatch domain names from their owners if they are not re-registered before their expiry date; a strategy known as ‘renewal snatching’.

How Does Cybersquatting Affect Businesses?

Cybersquatters may only have the intention of making a small profit from selling the domain name to the rightful owner. However, some cybersquatters will try to use similarly named domains to trick visitors, who believe that they are dealing with another company, into making purchases. This can harm businesses in two ways: firstly, by taking sales away from the legitimate company and secondly, if the impersonator provides a poor standard of product or service, it can harm the reputation of the business through negative feedback.

Other cybersquatters will register domain names with intentions that are capable of seriously defaming or damaging the rightful owner, an issue which became prominent when the ICM Registry announced the .xxx domain. Many businesses felt pressured into purchasing their trademarked name with the .xxx suffix in order to prevent malicious cybersquatters from purchasing the name in the future and blackmailing them with links to pornographic material.

Trademark Infringement and Cybersquatting

While the UK has no specific laws to protect businesses from cybersquatters, the Trade Marks Act can be used to combat trademark infringement, particularly if the business name is a registered trademark. Businesses should continually guard against such online intellectual property violations. Fraud laws can also be used to take action against those passing themselves off as another company.


Litigation may be best used as a last resort unless the cybersquatter has already caused significant damage. It could be more cost effective to contact the owner of the domain in question, as the infringement might be a simple misunderstanding and easily resolved. Alternatively, a complaint can be submitted to Nominet, the domain registrar, which has a dispute resolution service. In some cases the most commercially viable option might be to pay the cybersquatter, if their terms are reasonable.

If your business has been affected by cybersquatting you should seek legal advice as soon as possible. Rollingsons has experienced lawyers who will help you understand your options and work with you to resolve the issue. Please contact James Crichton via e-mail or by telephone on 0207 611 4848.