Cyber-squatting, or domain name hijacking, is the practice of registering
other people’s company names in an attempt to sell them on to businesses at a vastly inflated price. When a cyber-squatter parks themselves on your company name, you may find yourself faced with an asking price of several £000’s.
Typical methods of hijacking business names include putting in punctuation (such as dots and dashes), abbreviating words (‘limited’ becomes ‘ltd’) or even getting hold of the name in other countries. Cyber-squatters may also purchase common misspellings of a name or simply include a word that describes that company’s products.
If this sort of scammer targets your business name, they may purchase ten or twenty different variations of it all at once.
Combating the Scam
One way to protect yourself is to register several domain names yourself. If you beat the scammers to it, you can get rights to all the common misspellings and some descriptive words, then set them up to redirect to your original website. In fact, getting a portfolio of domain names is a smart business tactic too – as it gives you scope to split-test various web-sites, perhaps to market products or services in different ways to see which works best. But it is impossible to protect yourself against all the various combinations out there, simply because there are so many.
Trademark Registration
The best way to defend yourself against cyber-squatters is by taking action to register a trademark for the url or product name. Any use of 
the name by anyone else in your product or geographical market is then likely to be an infringement of your trademark rights. Basically, protecting your names and marks by trademark registration lessens dramatically the threat that the cyber-squatter can make of selling your url to someone else if your don’t buy it, or using it in competition with you.
Your trade mark can be protected across the UK, Europe or any country worldwide. The rights are very strong indeed, and a Registered Trade Mark is the scourge of the domain name hijacker although obviously the benefits of trade mark registration go way beyond this, It doesn’t just protect you online, but in every area of business and for every communication channel from printed labels to mass mail-outs – and not just for identical names, but for anything that’s confusingly similar.
Enforcing your Rights
Nothing ruins a cyber-squatter’s day like a Registered Trade Mark. Instead of having to gather endless evidence to prove your claim (as you would have to do if you had no Registered Trade Mark), a single legal letter is often all that is required to demonstrate your rights to the disputed domain name.
If they won’t surrender the domain name to you after a formal letter of demand, there is even an efficient legal process to have the rights transferred – so if you have your Registered Trade Mark, there is no need to go to court to enforce them. World Intellectual Property Office statistics for this tribunal process – known as the Uniform Domain Name Dispute Resolution Policy or UDRP – show a dramatic 28% rise in anti-cyberquatting claims. This is the sharpest rise since the UDRP was introduced in 1999. On average, over 17 domain name disputes were resolved each working day through the UDRP in 2010.
Some of last year’s claimants include global brands such as MasterCard, Ferrari and Tiffany, as well as online companies – perhaps those hit hardest by cyber-squatting – like Twitter, eBay, and Wikimedia foundation (the organisation behind Wikipedia). SMEs of all types also used the UDRP.
The UDRP is quick and operates under a strictly defined set of legal principles. While costs are not covered, they are minimised by the efficiency of the process and judgments are often delivered within two months of the initial complaint being posed. As well as tribunal arbitration, other paths of dispute resolution exist, including mediation and negotiated settlements.
Moral: If you have a brand but haven’t registered it as a registered trade mark, your business is vulnerable to legal attack, both in cyberspace and in the physical world. Beat the cyber-squatter with a trademark registration!