Cybersquatting

Cybersquatting is the practice of registering a domain name that is identical or confusingly similar to a trademark owned by someone else, with the intent to profit — by selling the name back to the brand, serving competing ads, or otherwise exploiting consumer confusion. It is the central concept behind the UDRP, which requires a complainant to prove three things: the domain matches their mark, the registrant has no legitimate rights, and the domain was registered and is being used in bad faith. In the US, the ACPA adds federal court jurisdiction and statutory damages up to $100,000 per domain. A related practice, typosquatting, targets misspellings of well-known names. Tokenizing a cybersquatted domain on a blockchain provides no legal shelter: UDRP panels and courts can — and do — order transfer of the underlying DNS registration regardless of token ownership. Registrants should be able to demonstrate a plausible, good-faith reason for their registration before acquiring a name that resembles an active brand.