All you need to know about cybersquatting and when it is illegal

Let’s say you have started a business and it’s growing. Your business has now garnered public interest and you want to set up a website to further grow your business in the digital space. But alas, the domain name has been taken up by a stranger who is willing to sell it to you at a price! You are now a victim of cybersquatting.

Cybersquatting is the practice of registering domain names of existing brands and then selling it for a price. This is done with the deliberate intention of making money by selling domain names to businesses. Cybersquatters usually identify existing trademarks, trade names and business names to register a domain name under these markers.

A domain name is a part of the URL or website of the company. Usually businesses prefer to keep their domain names simple and easily identifiable with the brand. In most cases, businesses prefer to retain their brand names in the domain so people can easily remember and access the website. Cybersquatting is the act of taking up domain names based on well-known and established businesses in order to trade the domain name with its rightful owner for a price.

Unfair, you say. Well, yes, but many businesses have fallen prey to cybersquatting because in India there are no laws against cybersquatting. Although, some businesses have successfully defended their ownership to the domain name in the court of law.

What is cybersquatting?

Cybersquatting is a product of the early days of digitisation when companies did not have the know-how of websites and domain names. Some enterprising players had the foresight that all big businesses will need to digitise and set up websites. They beat the businesses to the punch and registered domain names of some of the big companies. The plan was to arm-twist companies into paying large sums of money in return for these domain names.

With businesspersons becoming smarter, there has been a drop in the rate of cybersquatting. However, it is still prevalent and a lack of laws to curb cybersquatting further fuels this practice.

How cybersquatting is affecting businesses

In the digital age, it has become essential for businesses to have a digital footprint. The first step in this digital journey for any business – new or old – is setting up a website. A domain name is not merely a part of your web address, it is also your brand.

You want your customers to be able to easily locate your website. The best way to do that is to incorporate your brand name in the domain. Cybersquatters are well aware of this and take undue advantage of the situation by extorting large amounts of money in return for a domain name that is rightfully yours.

1999’s high-profile case, Yahoo Inc. vs Akash Arora & Anr, is a another good example. Here, the courts were found in favour of the plaintiff, Yahoo, as opposed to the defendant Akash Arora & Anr, despite the fact that the word “Yahoo” was not registered as a trademark by the company. The defendant argued that the word “Yahoo” was commonly mentioned in the dictionary, and that it was not trademarked. However, the court ruled in favour of the plaintiff, concluding that ‘Yahoo’ was now a globally recognized word, used in reference with the company.

How to spot cybersquatting

When you try to register your domain name and find that it has been registered already, it could be a sign of cybersquatting. However, before jumping to conclusions, see where the domain name takes you.

If the domain name takes you to a genuine page, the domain name you are looking for is unavailable and you have to try a new one. However, if it takes you to blank page or one that says that the domain name is for sale, you are a victim of cybersquatting. Other examples of cybersquatting include pages that say that the site is under construction or that the server was unavailable.

What to do when you spot a cybersquatter

If your domain name is a casualty of cybersquatting, you essentially have three options:

1. Pay for the domain name: If you are not one for arbitration and do not want long-drawn legal battles, you may choose to pay the cybersquatter. Do this only if it is more feasible to you than going to court. Cybersquatting is an illegitimate business and should not be encouraged.
2. File a case in the Indian court of law: It is important to note that there are no laws against cybersquatting in India. However, you can file a case against the cybersquatter under the Trade Mark Act, 1999.
3. Dispute resolution: Acknowledging the need for protection against cybersquatting, an international non-profit, Internet Corporation for Assigned Names and Numbers (ICANN), has laid down a Uniform Domain-Name Dispute-Resolution Policy (often referred to as the “UDRP”). There are approved dispute-resolution service providers appointed for the purpose of handling complaints of cybersquatting. The dispute resolution is expedited.

Final note: One of the best ways to fight cybersquatting is prevention. If you have a business idea, be proactive and register the domain name right away. There are no laws that protect you directly against cybersquatting. Legal battles can be taxing on you and your finances, especially if you are starting up.