Cybersquatting is an illegal practice that involves registering, selling or using a domain name on the Internet with the intent to profit from the reputation of a trademark owned by a third party. Cybersquatters or domain squatters reserve domain names that closely resemble registered trademarks, hoping that companies will want to purchase these domain names at a high price to protect their brand.
This practice can include misspellings or typographical variants of domain names (known as ‘typosquatting’): squatters take advantage of users’ typing errors to redirect traffic to their own websites. These sites may be used for malicious purposes such as fraud, scams or the distribution of malware or simply to generate advertising revenue.
Cybersquatting is considered a violation of intellectual property rights and can be legally challenged. Many jurisdictions have implemented regulations to protect against cybersquatting, including the Anticybersquatting Consumer Protection Act (ACPA) in the United States and ICANN (Internet Corporation for Assigned Names and Numbers) policies that allow trademark holders to contest such actions through arbitration procedures.
In an increasingly digital world, cybersquatting is a serious risk for businesses of all sizes and can damage their reputation and business operations. Companies must therefore be careful and take preventive measures, such as registering variations of their main domain name and monitoring the registration of similar domain names across different extensions.