What is Cybersquatting?

Protecting a company’s intellectual property is invaluable in establishing a successful and profitable business, particularly in today’s digital world. The simplest way to build and protect a brand is to register a trademark. The US Anticybersquatting Consumer Protection Act (ACPA) defines cybersquatting as an opportunistic practice of registering, trafficking in, and using a domain name resembling a trademark belonging to someone else with the aim to profit from it. Cybersquatting started emerging in the middle of 1990s during the time in which the internet and online marketing and advertising were advancing fairly rapidly.

Cybersquatters tend to buy a number of domain names associated with or resembling a well known and popular brand name in order to profit from that established brand’s goodwill and customer base. Their targets often then become the trademark owners who they intend to sell their squatted domains to at a higher cost as a way for the trademark owners to protect their businesses.

Types of Cybersquatting

Cybersquatting is not limited to the 4 types outlined below, however these are the most common types we see day to day in the domain world.

Typo Squatting

Typo Squatting refers to the simple act of ‘URL jacking’ and rests on the reliance of common spelling mistakes made by individuals when typing an address into a browser. These mistakes include different phrasing of words or names (such as boooksonline.africa or onlinebooks.africa) or the use of a different tld (such as booksonline.africa.com). Typo squatters use this technique to trick individuals into thinking they are on the trademarked site (in this case booksonline.com) and often set up similar sites with similar offers in order to capitalise on the site visitors’ mistake. Another trick is to buy out all of the domains close to a trademarked domain and then offer this for sale to the trademark owner, who more often than not will want to protect their brand and have these misspellings redirect to their original site.

Identity Theft

This occurs when a domain has not been renewed by the original owner and a squatter. Proceeds to swiftly buy that domain in order to have control over that domain as soon as it expires. They will then use that domain to redirect to a similar website or they may attempt to sell the domain back to the original owner at a much higher cost. You can easily avoid this by using our auto-renew function which is available on both DNS Gateway and Topdog Domain App.

Name Jacking

This refers to the use of well-known names for unintended, illegal or adverse purposes, and then proceeding to black mail the targeted individual with the content on the site, which eventually will cause this individual to buy back the domain at a higher cost.
Name jackers benefit from the flow of traffic to these popular named sites.

Reverse Cybersquatting

This refers to the practice of securing legitimate domain names including certain trademarks and then proceeding to pressure the trademark owners to buy back these domains. This is often considered an abuse of Domain Name Disputes Policy and is exemplified in our recent DD case regarding the webuycars.co.za domain.

Why do Cybersquatters exist?

Simply put, cybersquatting is an easy way to make money. Cybersquatters benefit from ransoming domain names, affiliate marketing – in which they use their squatted domain name to redirect customers to their own sites, domain parking – in which they can use the parked domain to redirect customers to their websites, or monetary scams, which may include identity theft and fraud from stealing information and bank account details from customers who mistakenly were lead to their alternate websites.

Combating Cybersquatting

Although Cybersquatting has become a lucrative online business particularly with the rise of online consumers, it still has a largely negative effect on established trademarks and companies who have a major online presence and often make use of this more prominently than a physical presence.

Protecting your brand name, service, trademark or any other terms relevant to your business will work out far cheaper if you preemptively protect those domains from cyber squatting.

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