Last updated: September 28, 2020
The Face Of Domain Squatting In 2020: Get The Facts Now
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Wait a minute. Does domain squatting (sometimes called cybersquatting) still exist today? Indeed it does.
Once a touted online money-making strategy back in the days when keyword stuffing was an optimization tactic and "made-for-AdSense" websites were considered a form of digital marketing, domain squatting is now not only annoying - it may even be illegal.
Just what is it, and what can you do if it happens to you?
What is Domain Squatting?
Domain squatting is basically buying a domain with two primary goals:
- being able to prevent others from buying it, and
- to profit from it through advertising or resale.
Domain squatters profit in two main ways.
1. Placing Ads on the Site
If you've ever typed an address into your browser expecting or hoping a legitimate site would appear, and instead were greeted with a site full of Google or Yahoo! ads, you probably encountered a squatted domain. Some squatters purchase domains that contain common, everyday words in the hopes Internet surfers will land on their sites and click their ads. Other times, domain squatters will buy common misspellings of popular websites (dot-coms like "goggle" or "facebppk") with the same intentions.
For example, back in 2007, a man owned weddingshoes.com for the sole purpose of displaying ads related to something that surely thousands of people search for every day. Many years later, this domain is still up for sale or rent.
No matter how the domain is acquired, advertising revenue is a very common reason people squat on domains.
2. Selling to the Highest Bidder
This category has two categories of its own.
- Thousands of people miss out on registering the perfect domain name because it's already been taken by a squatter.
- Thousands more actually lose domains they've previously purchased because they miss a renewal deadline.
In both of these cases, domain squatters will often put an exorbitant price tag on this premium domain name because they know there is demand for it.
Squatting on the "perfect domain name" is really frustrating for people interested in building a website with a high quality, easy to remember name. But in the "first come, first served" domain name industry, there really isn't anyone else to blame - they simply got beat to the punch. While not quite as frustrating as being beaten to a domain name idea by another person, domain name providers have also been known to protect premium, keyword-rich domain names when they notice a lot of inquiries into availability.
When a domain name provider spots a premium domain, they do the same thing a domain squatter does - place a high price tag on the name and request a buyer contact them by phone in order to complete the purchase.
For those who lose a domain because they missed a renewal deadline, domain squatters can be particularly pesky. Every domain name comes with an annual renewal. Unfortunately, businesses both big and small have been known to miss renewal dates on their domain names. When domains expire, they can be placed right back in the domain name pool for squatters to purchase. When someone swoops in and buys the domain before the situation can be remedied, the previous owner is forced to either pay up to get their domain back, or to simply give up and start over from scratch with a new domain.
This occurs less frequently today than in the past because domain name providers will often put expired domains on "hold" for a period of time (up to 60 days) to allow current owners to renew. While domain name providers understand things happen and deadlines can get missed, if a domain name does not get renewed after 60 days and a squatter gets their hands on it, the only person to take the blame is the previous owner of the domain.
Domain Squatting As Trademark Infringement
The majority of domain squatting is done to secure premium domains or expired domains to sell to the highest bidder. The most aggressive domain squatters on the market have been known to purchase domains that are well-known names or trademarked (like attcellphonestores.com, for example). They will then either build a site on the domain to capitalize on the traffic generated by the people who search for that well-known name every day, or they'll essentially hold the domain hostage, expecting the rightful owners of those names and trademarks to pay high prices to secure those domains.
This is called a "bad faith registration," and it's illegal, often resulting in penalties for the squatter.
What Is Bad Faith Registration?
Bad faith registration is a legal term laid out in the Uniform Dispute Resolution Policy (UDRP) established by ICANN in 1999. UDRP outlined the process for trademark holders to fight against domain squatting. UDRP was the first globally enforced policy to fight domain squatting, and also one of the first policies instituted for deliberation in the court proceedings.
A domain that is registered and being used "in bad faith" can be defined in one of four ways…
- Domain registration with the sole intention of selling to a competitor for a higher rate (like domain squatting as listed above).
- Domain name registration in an attempt to block the trademark holder from registration if they show a history of registration practices.
- Domain registration in an attempt to disrupt a trademark holder's business dealings
- Domain registration in an attempt to confuse or attract customers from a competing business
While these are the four primary defined cases of a "bad faith registration", this definition has been used far more loosely in legal proceedings involving trademark infringement.
How to Reclaim a Squatted Domain
Chances are, unless you're a celebrity, or you own a trademark which someone purchases as a domain, you will have a very difficult time either initially purchasing a domain owned by a squatter, or regaining it if you should fail to renew it and lose the domain.
That is, unless you're willing to simply pay whatever the squatter is asking!
However, if you believe the domain was purchased in bad faith, or you do own the trademark-turned-domain, you may have recourse to reclaim a squatted domain thanks to UDRP.
To begin the reclamation process, you'll have to follow the steps outlined by the Uniform Domain-Name Dispute-Resolution Policy (UDRP). This policy was instituted in December 1999, specifically for the purpose of addressing the issue of domain squatting, and is administered by the Internet Corporation for Assigned Names and Numbers (ICANN).
While that process exists to help victims of domain squatting, like any legal process, it can be complicated and frustrating to endure on your own. While researching whether or not you have a case, have a look at sample UDRP decisions and cases. Before you use the UDRP, consider consulting a lawyer with experience in Internet and intellectual property issues to increase the likelihood that your petition will succeed.
Be aware that, depending on the domain name you're trying to reclaim, the process may get a bit ugly. Domain squatters exist to make money, and they will fight to keep a domain if they feel it can be profitable. This is part of the reason domain squatting still exists a few decades after the Internet became open to the public. If it weren't still a profitable venture, it wouldn't be an issue.
High-Profile Domain Squatting Cases
A few celebrities have had run-ins with domain squatters. Madonna won the domain madonna.com from a man who had purchased it and turned it into an adult entertainment site. Julia Roberts also secured juliaroberts.com from a man who had created a fan site. When he put the domain up for auction on eBay, it got the attention of Roberts' lawyers, and the man soon found himself in court, ordered to hand over the domain to the actress.
Another man, Mark Elsis, used domain squatting to further his personal environmental agenda. He made a practice of buying celebrity names as domains, but said any of those celebrities could have their domain names for free. All he asked in exchange was for the celebrity who received their domain name to read a document he had written about the destruction of the rain forest, and then use their celebrity to shed light on the situation. While he's handed over numerous domains in this manner, celebrities such as Brian Wilson, Ringo Starr, and Bette Midler have yet to reciprocate on his offer.
Not every celebrity gains control of the domain bearing their name, though. In another high-profile case, singer Sting (born Gordon Sumner) lost his bid for sting.com when his lawyers were unable to prove that the man who had bought the domain did so in bad faith. Sting's representatives claimed the domain owner had approached the singer, asking $25,000 for the domain, but again, Sting's lawyers could not produce evidence of such a request, and the judge in the case denied Sting's petition.
In the corporate world, many large organizations have fought domain squatters using UDRP to secure branded domain names. Household brand names including the World Wrestling Federation (now known as World Wrestling Entertainment), Ingersoll-Rand, Nabisco, and JP Morgan have all battled domain squatting cases when their trademarks have been infringed upon.
Final Thoughts On Domain Squatting
Domain squatting gets a bad rap on the Internet - and generally for good reason. But the biggest lesson to be learned from domain squatters is simple: cover your bases.
There are premium domains on the web today, but if you can find a variation, it makes sense to go ahead and pony up $10 to $20 to secure it, then pay $100's or $1000's down the line when you are finally ready to build a site.
If you are thriving online business and don't have a trademark on your brand - you should probably get one. If that isn't an option, at the very least make sure your domains are set up to auto-renew every year or few years. As a better strategy, you should probably also invest a few hundred dollars per year in securing your name with all top level domain (TLD) extensions and country code TLDs.
While having a domain squatter get their hands on your domain name is never good for business, a little proactive domain name buying can go a long way to preventing domain squatters from taking advantage of your hard work and financial status to benefit themselves.
Updated: April 2019