Is Domain Name Squatting Still a Thing in 2022?

Updated: 2022-03-03 / Article by: Jerry Low

As the Internet grows, so does the number and intensity of cyberattacks. While many focus on preventing and thwarting such attacks, another relevant topic of interest is now seemingly re-emerging; domain name squatting. 

Also known as cybersquatting, domain name squatting has been around since the Internet started to boom. Let’s investigate and see if cybersquatting is still an issue today.

What is Domain Name Squatting?

Before we dive into domain name squatting, let’s first discuss domaining. The latter is typically trading domain names with the express intention of making a reasonable profit; there are no bad intentions involved. 

It is akin to investing in real estate properties where you speculate the property market except that in the case of domaining, this involves the buying and selling domain names by looking at the market trend and shift in global interests. They then auction the domain names off, procure a buyer or engage a domain broker to assist.

However, when this practice of trading domain names crosses into gray areas of dubious nature (malicious intentions involved), it becomes domain name squatting. 

An example would be when domain names, especially when linked to existing highly successful conglomerates, are hoarded by domain squatters, with the express purpose of selling to them at very unreasonable exorbitant prices. 

Domain squatters take advantage of the fact that these conglomerates are desperate and would do almost anything to retrieve and protect their respective brand names and reputations. Simply put, it’s daylight robbery. 

Is Domain Name Squatting Illegal?

The answer boils down to the intent behind or what motivates a person to register a domain name in the first place. It is illegal since domain name squatting is technically buying and registering domain names with malicious intentions. 

The following falls under such a category:

  • You intend to ride on a competitor’s business and confuse consumers.
  • You want to prevent the trademark holder from owning the domain.
  • You want to destroy someone’s business and reputation.

Is Domain Name Squatting Still a Thing in 2022?

The existence of domain squatters made it difficult for businesses of all shapes and sizes. Yes, it can even impact smaller businesses. As such, the Internet Corporation of Assigned Names and Numbers (ICANN) decided to increase the number of new generic top-level domains (gTLDs) in the hope that more companies would be able to get the domain names they wanted.

Businesses, especially budding ones, leaped with joy, as there was this much more extensive list (more than 1,300) of gTLDs that they could choose peruse. Also, they had the flexibility of being creative when building their brand name, which boded well with their various product lineups.

However, as the number of gTLDs increased, so did the number of domain names lasso-ed in by the domain squatters. Sadly, there seems to be no running away from them. 

As time progressed, many thought that the number of domain squatters would meander. After all, how many different domain names could one hoard? But in reality, domain name squatting increased and seemed to be here to stay – likely well into the future. 

How to Deal With Domain Name Squatting?

Domain name squatting has been around for some time and will continue to stay. You can hardly escape them. Many businesses and celebrities have a hard time dealing with them. Even though they’re an absolute nuisance, there are ways to handle them:

Negotiate

As with all hostage situations, negotiation is usually the first line of defense. It starts once you realize that a domain squatter has already hijacked a domain name. Stay calm and think this through. 

Remember, if the domain squatter already owns that domain name, it is almost as good as gone, even more so when you don’t own the trademark of that domain name. You can try to use another domain extension but bear in mind that a competitor with ill intentions may get hold of “your” domain name from the domain squatter, potentially causing reputable harm.

All domain squatters tag each of their domain names with different prices. Hence, the first thing you can do is check the pricing on the domain name you want. Should it not be overpriced, you may want to consider paying for it. After all, legal proceedings may cost more and potentially drag on forever. 

Legal Efforts (ACPA or ICANN)

Countries have started to establish legislation that may help with matters concerning domain name squatting. These laws help deter people from registering domain names with bad intentions. The US crafted the Anticybersquatting Consumer Protection Act (ACPA) in 1999 for such a purpose. 

If you have tried talking it out with the domain squatter, but both parties failed to come to terms, then you can consider getting in touch with the ACPA. Once you do, you involve the federal court to help in your journey to win the lawsuit against the domain squatter. 

The problem with this approach is the tons of paperwork ACPA demands. In addition, legal proceedings will signal the domain name’s value to cybersquatters, potentially making them dig in their heels.

Another option is via the Internet Corporation of Assigned Names and Numbers (ICANN) – a non-profit entity governing and standardizing how people find websites online. They build and manage a list of accredited domain name registrars. So, if you hit a problem with a domain squatter, you can engage their subject matter experts to assist you.

Generally speaking, this is less costly (no need for a lawyer) and takes less time than ACPA. ICANN utilizes the Uniform Domain Name Dispute Resolution Policy (UDRP). Most would consult ICANN and UDRP first before considering their other options.

Read more: How to secure your domain name from domain thieves

How to Prevent Domain Name Squatting from Happening to You

While you can’t avoid domain name squatting entirely, there are several tips that you can follow to help reduce the chances of becoming a victim of domain name squatting:

1. Register Domains in Advance

Register a domain
You can check your preferred domain name and register it in advance if it is still available.

Think ahead and look into the domains you may need in the future. Once you have your list, go ahead and register them before they end up in the cart of domain squatters.

Here are some of the best places to buy a domain name.

2. Register Similar Domain Names in Advance

Once you have the domain names of interest in hand, go the extra distance and snap up similar domain names with different extensions. You may want to consider getting the whole lot, including .biz, .tube, .co, .song, and others. Also, think of other ways you can rearrange the composition of your domain names and get these as well.

3. Register Trademark

You can look into registering your domain with the United States Patent and Trademark Office. By doing so, you are affixing your legal claims and rights to the domain. This step helps heaps in the future should there ever be a need to fight a lawsuit against a domain squatter.

4. Register Under Your Name

As the business owner, you must ensure that the domain names are registered under your name and not your employees. This process can mitigate any risks of holding you ransom, especially from disgruntled workers. 

Case Studies

1. Nu Bank

In 2019, Nu Bank Brazil filed a lawsuit against NuBank US. The domain in question is nubank.com, registered in 1997. Nu Bank Brazil claimed that the said domain name was similar to its NUBANK and NU BANK trademarks and confused its customers. Also, they insisted that NuBank US had no legitimate interests concerning the said domain name. 

They claimed that cybersquatters used the domain name with bad intentions. Furthermore, they believed that NuBank US did not respond in good faith during their negotiations, instead had demanded an exorbitant sum from Nu Bank Brazil. 

Although Nu Bank Brazil fulfilled all requirements to proceed with the lawsuit, they eventually lost the case. The domain name was registered many years before Nu Bank Brazil came into the picture. Hence, NuBank US could not have had any bad intentions back then.

2. Madonna

In 2000, Madonna filed a lawsuit against Dan Parisi, the registered owner of the domain name Madonna.com. Madonna claimed that the domain name in question was identical to MADONNA, to which she had rights. She also stated that Dan used the domain name with the express intentions of attracting people to his site, riding on her name. 

Madonna proceeded with filing the lawsuit as she fulfilled all the requirements and presented enough evidence to prove Dan’s wrongdoings. However, Dan refuted the claims by stating that he used the domain name for legitimate business reasons. He also included a disclaimer on his site, denying any intentions to use Madonna’s name for any business gain purposes.

The court went ahead to rule in favor of Madonna. This was because the domain name in question is identical to the trademark that Madonna had rights to and thus can be confusing. The court also found that Dan had no legitimate interests in the said domain name.

Conclusion

Domain name squatting is still prevalent despite more legislation. It’s not surprising as domain name squatting can be very profitable. As a business owner, you can look into ways to protect your business interests and not be the victim of such malicious domain squatters.

However, should you decide to initiate a domain name squatting lawsuit, you need to make sure you have everything in hand to prove to the court the evil intent behind the domain squatter. Remember, the whole lawsuit journey can be arduous, so make sure you are ready to take it on.

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About Jerry Low

Founder of WebHostingSecretRevealed.net (WHSR) - a hosting review trusted and used by 100,000's users. More than 15 years experience in web hosting, affiliate marketing, and SEO. Contributor to ProBlogger.net, Business.com, SocialMediaToday.com, and more.