Cybersquatting: A Problem Small Businesses Should Consider

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Have you ever thought about the value of your domain name? Even as a small business, someone with a slight variation of your domain name, or the .net or .biz version, or even the .xxx, could be looking to use that name to make some sort of profit. If your business name or domain name is trademarked, then you could possibility be looking at a case of cybersquatting.

Cybersquatting, or domain squatting, as defined by Wikipedia, is the “registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. The cybersquatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.” Cybersquatting is against the law, and most people who purchase trademarked domain names know that. So, how does a small business prevent this from happening to them and avoid arbitration? What’s a business to do if its domain name has been squatted?

The best way to prevent this from happening is to keep up with your domain name registrations. Often, a cybersquatter will snatch a domain name almost as soon as the registration expires. If you prevent your domain name from expiring, you can prevent someone else taking it and then having to pay a much higher price for it. It would be to your advantage to sign up for longer registration terms, say three years or five years, because that improves your search engine rankings (search engines like domains that are registered for a long time) as well as stops others from taking your trademarked domain name.

Another way to prevent cybersquatting is to purchase to domain names of variations of your trademark, such as the .net or .biz version, or misspellings. This is what’s happening right now with the .xxx domains. Many colleges, universities, and corporations purchased the .xxx domain for the sake of preventing a public relations nightmare, but many missed out on the opportunity. This gave individuals a chance to purchase trademarked names for the sole purpose of selling them back for a profit. Even though those individuals don’t have the bad faith intent of tarnishing the trademark holder, technically what they are doing is still cybersquatting.

If you suspect that your domain name, or a variation, is being cybersquatted, then the best thing for a small business to do is to go the National Arbitration Forum, which handles all domain name disputes. This is the best move for many businesses, as it is much cheaper to go to the NAF to sort this out rather than taking the cybersquatter to court. Plus, jurisdiction could be an issue in court, especially if the cybersquatter happens to be outside of the United States.

Even though cybersquatting isn’t a big problem for small businesses, it’s something that should be aware of, especially when it’s time to reregister the domain name. It’s something that could easily happen to a small business, and it’s better to be prepared than to react to a disastrous situation.