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Anti-cybersquatting act offers protection

Nov. 03, 2003

Q: Although our family business has manufactured and sold custom furniture for more than 100 years, and our company name is well-known worldwide, we didn't join the technology revolution until last year. We automated, computerized and decided to launch an Internet website. But when we tried to reserve our domain name, we found that it was already registered by another company. We did some research and found that their business was just buying popular names and then selling them back to the real owners for a premium. We requested they release our name, but they refused unless we also paid a large sum to them. Can they do this? It sounds illegal.

-- ``The Tech Dinosaurs''

A: You are protected by the ''Anti-Cybersquatting Consumer Protection Act,'' which prohibits bad faith registration of well-known company or celebrity names, those confusingly similar to registered trademarks, or intentional misspelling of popular domain names to steer Internet traffic to other sites -- if done in bad faith.

The legislators compared the offenders to cyber pirates who were trying to extort money to free legitimate domain names they had kidnapped from their true owners.

Factors tending to show bad faith are:

multiple registrations by one party

solicitation of sale at an inflated price

lack of name similarity with the domain name

lack of a bona fide business/personal connection

The act provides for money damages up to $100,000 per pirated domain name, injunctions to cancel the improper registrations, assignments back to their proper owners, and payment of the victim's legal fees.

Before the act, business opportunities existed for entrepreneurs who earned financial windfalls in the early 1990s by registering domain names of the Fortune 500 companies and popular celebrities, and then squatted on them, waiting for the real parties to notice and pay the costly transfer prices demanded. Widespread publicity that resulted from such registrations for, and led to passage of the act.


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