What Is Cybersquatting?
Cybersquatting is the practice of registering a domain name that incorporates someone else's trademark with the bad-faith intent to profit from it. This typically involves registering a domain matching a known brand name, then attempting to sell it to the trademark owner at an inflated price.
Cybersquatting is illegal in the United States under the ACPA (Anti-Cybersquatting Consumer Protection Act) and can be challenged internationally through the UDRP (Uniform Domain-Name Dispute-Resolution Policy). Penalties can include forced transfer of the domain and monetary damages up to $100,000 per domain under ACPA.
Important distinction: registering a generic dictionary word or common phrase is not cybersquatting, even if a company later uses that word as their brand. Cybersquatting requires proof of bad faith — that you registered the domain specifically to exploit someone else's existing trademark.
Why This Matters for Startups
Cybersquatting protection works both ways for startups. If someone registers YourStartupName.com after hearing about your company, you have legal remedies through UDRP or ACPA. Conversely, make sure your chosen domain doesn't infringe on an existing trademark — even unintentionally. Always search USPTO and EUIPO trademark databases before committing to a name. Registering a domain that matches an existing famous brand is not just illegal — it's a waste of your time and money.
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