There is this misconception that registering domain names for the purpose of resale, development, or monetization constitues a practice known as “cybersquatting”.
This accusation most likely arises from anger over the unavailability of a particular domain name, the relatively closed and opaque nature of the domain investing industry, or perhaps the negative press that actual cybersquatters have wrought upon this industry. Or maybe a combination of all these different factors. However, domaining, the lawful practice of reselling generic domains for profit has been gaining broader global respect over the past decade.
During the mid-1990s, a number of Internet speculators often engaged in the practice of registering domains such as Pepsi.com or TheBeatles.com, which correspond to established trademarks in the hopes of reselling them to the trademark holders for top dollar. Back then, the IP holders lacked resources against such attempts of extortion until president Bill Clinton signed into law the Anticybersquatting Concsumer Act (ACPA) in 1999. This ACPA bill entitles a trademark holder to exact, in addition to the domain name, up to $100,000 in damages per name from a domain owner who:
– Has no legitimate personal integrated in that domain, and
– has bad faith intent to profit from that domain name.
– Registered or purchased a domain name that is identical, confusingly similar to, or dilutive of that trademark.
The process of seeking a legal suit under the ACPA act could take years, however, ICANN – the central domain registry )the Internet Corporation for Assigned Names) established a process called the Uniform Domain-Name Dispute-Resolution Policy (UDRP) for expediently securing forced transfers of domain names under disput from cybersquatters, as defined in terms similar to those under the ACPA act.
But it should be noted that registering a domain name which coincides with a registered trademark dot not necesarrily constitute cybersquatting. Especially if the domain represents a generic express and is used for purposes correspond to the literal meaning. For example, if one were to register Sprint.com before the telephone company was able to do and then sell running shoes, the cellphone company would have no basis for a lawsuit although the company may attempt to. But the moment you attempt to sell cellphone related products or monitize the domain for pay-per-click advertisements for Sprint cellphone services, you are now liable.
GoDaddy is another example even if you used another extension such as .ca, .org, .net, or .biz for example. If your GoDaddy website was about being a great father, you would be okay to have such a domain but as soon as you got into the domain industry, you would be held liable.
Having a domain name is like online real estate. Just like each property is unique, so is the domain and value of it changes over time. Having a portfolio of domain names requires consistent upkeep on your part and experimentation with various methods to monitize it and keep an eye on global trends.
Each industry has a handful of bad apples that give a bad name to the rest of the good guys and domaining industry is no exception. We should all work to dissolve the equation between the malicious cybersquatter and the entrepreneurial domain investor.