Cybersquatting as a type of trademark infringement. How dangerous is it?
- What is cybersquatting?
- How does cybersquatting work?
- What are the dangers of cybersquatting?
- How can brand owners prevent cybersquatting?
The move of a business into the virtual space opens up new prospects for its development, providing the opportunity to scale to other markets, countries and regions, and to popularise your product among more customers. However, when a brand gains popularity in the online space, it also becomes susceptible to various types of cybercrime, perpetrated by cybercriminals seeking financial gain at the expense of your reputation.
One such offence is cybersquatting. What is cybersquatting and what should you do if your brand is a victim of cybersquatting?
What is cybersquatting?
Cybersquatting, also known as cyber blackmail or cyber trademark counterfeiting, is the practice of registering, using or selling domain names that are identical or very similar to registered trademarks in the name of others. These domains can be used by attackers for a variety of purposes, but typically these are:
- Competitive advantage
Cybersquatters, can use fake domains to intercept customers or visitors who might have visited a company's official website.
- Phishing and fraud
Spoofed domains can be used to conduct phishing attacks and scams aimed at obtaining sensitive information or financial data from users.
- Spreading malicious software
It is not uncommon for cybersquatters to use fake domains to distribute malware, which can cause serious damage to both brand and users.
- Extortion and speculation
One of the most common goals of cybersquatters is to register domains that include or copy a well-known brand in their own name for the purpose of resale to the owner of the brand, who himself did not manage to do it earlier and now has to buy out the rights to use the domain in a certain territory.
How does cybersquatting work?
As a rule, cybersquatters use a standard scheme: in a cybersquatting attack, attackers search the Internet for a business, ideally one that is promoted and well-known or is gaining popularity, but does not have a website in principle or a registered domain in a certain territory or segment. When they find such а company or brand, they register a domain with its name on it.
Subsequently, when the company decides to enter the Internet or a particular market, it faces a situation in which the domain name is already occupied by someone else. And when the enterprise approaches cybersquatters with an offer to purchase this domain name, the latter offer it at an unreasonably high price.
There are situations where a company already owns a domain name. In such a case, attackers may register a similar domain name with a different top-level domain, expecting that the owner of the original brand will later contact them to purchase it.
- So, if an organisation owns the domain mir.com, cybersquatters can use the domain mir.org or mir.eu.
Cybersquatters also register domains similar to popular brand names in the hope that users who type in the wrong brand name or misspelled brand name in the browser address bar will come across the squatter sites. By accessing these fake sites, users may run the risk of losing their credentials, downloading malicious software, being exposed to malicious advertising, falling victim to phishing attacks, or other malicious influences.
What are the dangers of cybersquatting?
Cybersquatting poses a serious threat to trademark and brand rights for several reasons:
- Reputational damage
The use of fake domains and malicious sites can lead to brand reputation damage. Users exposed to fake sites may associate negative experiences with the official brand.
- Loss of clients and revenue
Cybersquatting can lead to loss of customers and revenue. Visitors who end up on fake websites may make purchases or provide sensitive information to attackers rather than interacting with the official website.
- Legal consequences
Cybersquatting can have legal consequences for the brand and the infringers. Trademark owners have the right to defend against such infringements and can take legal steps, including legal action and prosecution of infringers. But sometimes this can be time-consuming and expensive, so it is not uncommon for brand owners to prefer to buy the domain rather than get involved in litigation if the cybersquatters are not too greedy and ask for a price that is affordable for the owner. At the same time, such situations provoke cybersquatters to continue to take brands "hostage".
How can brand owners prevent cybersquatting?
What we suggest our clients do to protect their brand from various forms of cybersquatting:
- Registration of a brand as a trade mark
This is the first and basic step to protect your brand rights, including on the Internet. Trademark rights in most cases dominate over domain rights if obtained in good faith. With a registered trademark, you will be able to fight more effectively against unscrupulous competitors, including cybersquatters.
- Domain name registration
In the digital world, brand owners are encouraged to actively register domain names that match their trademarks and business names. This includes different variations and alternative top-level domains. The more domain names registered by brand owners, the fewer opportunities attackers have.
- Set automatic renewal mode for your domain
Cybersquatters track down domain names whose owners have forgotten to renew them. They then register such domains and thus "steal" the names of these brands on the Internet.
To avoid such an outcome of events, it is recommended to set the domain auto-renewal mode, so that the domain name is timely renewed before its expiry date.
- Internet monitoring
Conducting regular Internet monitoring for brand mentions and the use of similar domain names can help identify potential cybersquatting cases at an early stage.
In addition, there are specialised tools and services that automatically monitor the Internet for registered domain names similar to a brand. These tools can alert brand owners to new domains associated with the brand.
In conclusion, cybersquatting poses a serious threat to companies and their trademarks. It can lead to reputational damage, loss of clients and revenue, as well as legal consequences. However, with the right strategy and protective measures, companies can minimise the risks and continue to evolve in the digital age, preserving their trademark rights, reputation and client’s trust.
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