Cybersquatting Laws

As the internet continues to evolve, so do the laws which regulate the internet. These laws are changing continuously in order to help provide consumers and citizens with various protections in connection with activity online and digital assets.

Cyberspace laws, in general, govern the various legal issues surrounding the communication, distribution, and transactions which occur over the internet as well as other types of networked devices and technologies. Common issues that are governed by cyberspace laws include:

• Domain name disputes: A domain name is the address of a particular website on the internet, also known as the URL;
  • Many businesses use their existing business names or similar names as domain names. A dispute may arise as to which business or entity owns or has rights to use a particular domain name;
• Trademark infringement: Small changes in a domain name from a similarly named site may be considered trademark infringement, especially if this results in consumer confusion;
  • If an individual already has a trademark for their business name and that domain name is taken by someone else, there may be an actionable trademark infringement claim;
• Cybersquatting issues: Cybersquatting occurs when a party takes an established business name or mark, registers it as a domain name, and waits for an individual to try to use the business name or mark as their own domain name;
  • The innocent and established business will then be forced to buy from the cybersquatter at a high price; and
• Hacked emails: Email communications move across many lines to get to their final destinations. Email is generally not absolutely protected from a hacker who wishes to know the contents of the email;
  • This may cause various issues regarding privacy as well as other concerns.

What are E-Commerce Laws?

E-commerce, in general, refers to how businesses or transactions occur online, or digitally. This may include activities such as:

• Minor retail transactions will small companies;
• Contracts; and
• Buying and selling a business.

There are many issues which may arise in the context of e-commerce in cyberspace, which may include, but are not limited to:

• Security and digital signatures: There are numerous concerns that arise when engaging in business online, including:
  • credit card security;
  • digital signatures; and
  • biometrics;
• Contract formation: Newer legal problems arise when forming a contract in an electric form. The contract must still adhere to traditional contract laws, even though there may be discrepancies in how contract terms are delivered and obtained; and
• Internet providers’ liability: Internet service providers may, in some cases, face liability when internet outages occur. This is due to the fact that an internet outage may have devastating consequences on:
  • contract formation;
  • business income; and
  • Profits, for example, an online business may lose substantial amounts of daily business if their internet goes out even for a day or part of a day.

What are Cyber Crimes?

Cyberspace laws, also called cyberlaw, regulate cybercrimes. Cybercrimes may be defined as any crime accomplished through a computer or a network.

Cybercrimes may include crimes such as:

• Hacking and other cybersecurity problems and crimes;
• Miscellaneous copyright and trade secret offenses;
• Fraud and financial offenses, especially identity theft;
• Miscellaneous pornography-related charges;
• Harassment, cyberbullying, or stalking, referred to as cyberstalking;
• Drug trafficking;
• Online terrorism activities;
• Miscellaneous crimes involving invasions of privacy or breaches of confidential information; and
• Different other types of crimes.

Cyber crimes may be severe and may result in harsh legal penalties, which may include criminal fines as well as potential incarceration. In some cases, a cyber crime may result in federal charges.

What About Privacy Issues?

Cyberspace laws also govern miscellaneous privacy issues. As more individuals engage in financial, social, and political interactions online, there will be additional problems that continue to arise, many of which deal with violations of privacy.

In many cases, these issues are related to or involve endeavors to steal an individual’s identity or monetary assets or to subject them to harmful software or internet attacks. These issues may include:

• Malware: This is software which may be used in a business setting as well as a personal setting that bypasses digital security measures and is used to cause harm to a:
  • computer;
  • server; or
  • network;
• Spyware: This software or other digital mechanisms obtain information from an individual’s computer, network, or servers without their permission. This may lead to the theft of an individual’s confidential:
  • data;
  • files; or
  • accounts;
• Web bugs: Web bugs are often placed in a web page or email to track an individual’s views of the website or email message or other online activity. These may occasionally be used to learn an individual’s patterns or passwords;
• Phishing: This involves obtaining user names, passwords, credit cards, or bank information through targeted invasions. It can often be prosecuted as a crime;
  • For example, a phishing scheme may target specific groups of individuals, for example, senior citizens;
• Pharming: This diverts traffic from websites to different internet addresses. Pharming may create business losses and miscellaneous other types of legal issues; and
• Social engineering: This uses many tactics to fool an individual into revealing confidential data. For example, an individual may pose as a military serviceman and try to gather donations from another individual on a social media website.

How Common are State Internet Privacy Acts?

Currently, nearly every state has an internet privacy law in effect. Minnesota and Nevada have paved the way with their prototype privacy acts that are founded on the various federal internet privacy acts already in existence, including:

• The Electronic Communications Privacy Act;
• The Consumer Internet Privacy Protection Act; and
• The Children’s Online Privacy Protection Act.

What is Cybersquatting?

Cybersquatting is defined as a situation where an individual or a business entity purchases a domain name for the sole purpose of reselling the domain name to the highest bidder. Implicit in the purpose of the purchase of the domain name is to hold the website for ransom rather than to use or to develop it.

Since 1999, cybersquatting, also called reverse domain hijacking, has been an illegal activity worldwide.

What Must an Individual Show to Make an Argument of Cybersquatting?

Generally, a plaintiff is required to show that the domain name registrant has no legitimate interest in using the domain name and that the domain name registrant acted in bad faith in order to deprive the potential legitimate power of use of or profit from the domain name. In this context, a legitimate interest means a reasonable business or professional purpose.

Bad faith is, in general, interpreted to mean that the registration has tried to sell or to manipulate the domain in order to make a profit on it. This term is ambiguous in any area of the law and is no different in cyberspace law.

Courts, however, have provided some clarity on the definition of this term. In this context, bad faith will be determined by:

• The previously owned trademark or intellectual property rights of both of the parties in the lawsuit;
• Extent to which the domain name consists of the legal or common name of an identifying person;
• Use of the domain name for actual true sales of goods and services;
  • Use of a domain for sales and services generally indicates good faith use of the domain name;
• Use of the domain name for fair use or noncommercial purposes;
  • If a domain name is used for commentary and educational purposes may indicate good faith use of a domain name;
• If the domain name registrants intend to divert consumers away from valid mark owner;
• If the domain name registrant’s intent to offer for sale, transfer, or otherwise assign the domain name; and
• Examining an individual domain name registrant’s acquisition of multiple similar domain names for unfair use.

Should I Contact a Lawyer Regarding a Possible Cybersquatting Suit?

Cybersquatting laws are well-settled worldwide. A court will typically have little patience for cybersquatting and will be quick to hand down a ruling and a penalty to curtail this practice.

If you believe you may have a reasonable claim to a domain name that another individual is cybersquatting on, it may be helpful to consult with an entertainment lawyer. Your lawyer can assist you with filing a lawsuit against the squatter.