Cybersquatting 101

In 2019, two men from Australia bought TikToks.com for $2000, hoping to capitalize on the social media platform’s skyrocketing popularity. They used it to promote a service that offered paid followers and like boosts for TikTok users. Although TikTok’s parent company initially offered to buy the domain, the dynamic duo turned them down, and the case ended up in court. TikTok came out on top, and the pair had to hand over the URL. This is just one of the latest high-profile cases of cybersquatting – the practice of grabbing domain names linked to well-known brands for resale or financial gain.

No one is immune from such a takeover. In 2023 alone, the World Intellectual Property Organization (WIPO) registered over 6,000 complaints related to cybersquatting.

So, why can a domain be worth millions? Who are these “cybersquatters”? And how can you protect your brand online? We’ll dive into these questions in this article.

What is cybersquatting?

Cybersquatting is the practice of intentionally registering, purchasing, or using domain names that are identical or very similar to well-known brands, companies, individuals, or organizations, with the aim of reselling them or profiting from the original owner’s reputation.

Simply put, cybersquatters are digital “land speculators” who grab virtual addresses before the rightful brand owner gets the chance. 

Cybersquatting happens for a variety of reasons.

• Profit from resale. This is the most common reason. A squatter registers a domain that matches a brand or company name and then offers to sell it back for a much higher price. For example, in 2014, the cars.com domain sold for a staggering $872 million. Or, 10 years later, Friend, an AI companion company, announced that it spent $1.8 million of the $2.5 million it raised to acquire the domain friend.com. Founder Avi Schiffmann confirmed the purchase, emphasizing the value of premium domains despite their high cost. He provided a screenshot of the transaction, which showed he paid $1,887,843 for the domain on February 6. So, many companies still find themselves paying for domains that should rightfully belong to them.
• Exploiting brand reputation. Sometimes, domains are used to redirect traffic to other websites, like competitor pages or sites filled with ads or even malware. Over the years, Microsoft has filed hundreds of lawsuits against owners of domains like micros0ft.com or windowssupport.com that mimic legitimate addresses and mislead users.
• Brand abuse and impersonation. Some domains are registered with the intent to mock, criticize, or even blackmail a brand or individual.

The problem has become so widespread that in 1999, the United States enacted the ACPA (Anticybersquatting Consumer Protection Act). In addition, the World Intellectual Property Organization (WIPO) developed the UDRP (Uniform Domain-Name Dispute-Resolution Policy), which allows domain name disputes to be settled out of court.

Examples of cybersquatting

Panavision v. Dennis Toeppen (1998)

Dennis Toeppen, one of the first professional cybersquatters, registered panavision.com, a name that matched a well-known Hollywood film camera company. He demanded $13,000 to transfer the rights to the domain.  Panavision sued and won, with the court ruling that the domain was registered for sale rather than use, establishing a precedent in American law that contributed to the creation of the ACPA.

Microsoft vs. Many Cybersquatters

Microsoft has been proactive in protecting its brands and products. For example, in 2007, the company reported recovering over 1,100 domain names infringing on its trademarks within just six months. It also filed several lawsuits against individuals who had registered domains similar to its brands. These included domains like windowsxp.com, microsoftoffice.net, and even micros0ft.com.

Lego vs Blocks

In 2011, LEGO filed a complaint with WIPO regarding the legoblocks.com domain, which was registered by a third party and used to redirect traffic to third-party advertising sites. WIPO found the domain registration to be in bad faith and ordered that the domain be transferred to LEGO. The domain is now inactive or has been taken offline.

MikeRoweSoft.com case

A 17-year-old high school student named Mike Rowe registered MikeRoweSoft.com, a clever play on his name and the company Microsoft. a playful twist on his name and Microsoft. Microsoft filed a complaint for the domain’s transfer, but the public viewed the corporation’s actions as overly aggressive. Ultimately, Microsoft got scared of bad publicity and offered Mike a “deal”: he would voluntarily hand over the domain in exchange for a single Xbox, some licensed products, a trip to Redmond, and… “educational materials”. Mike was only 17, so he accepted, resolving the dispute out of court. He could’ve easily demanded at least 10 Xboxes, for him and all of his friends. Just sayin’.

Verizon vs. Domains for profit

Verizon won a case against a company that owned over 1,000 domains containing variations of the word “verizon,” such as verizoncellphones.com and verizononline.net. The cybersquatter used these domains to place ads and redirect web traffic. The court awarded Verizon $33 million in damages, marking one of the largest cybersquatting judgments ever issued.

TRX.com case

In 2022, entrepreneur Loo Tze Ming purchased trx.com for $138,000. Fitness Anywhere LLC, the owner of the TRX trademark, later accused him of cybersquatting and won a domain transfer through the UDRP process. However, the owner challenged the decision in court, and in 2025, the U.S. Court of Appeals ruled that the domain had been purchased lawfully, without bad faith intent. This ruling set an important precedent: the similarity of a domain name to a trademark does not necessarily constitute infringement unless misuse is involved.

Legal framework

United States

In response to the rise of cybersquatting in the 1990s, the Anticybersquatting Consumer Protection Act (ACPA) was enacted in the United States, going into effect in 1999. This law has become a vital tool for protecting trademark owners online.

The ACPA allows trademark owners to sue anyone who, in bad faith, registers, uses, or purchases a domain name that is confusingly similar to a registered trademark or name. Domains like nike-shoes.net or gooogle.com can be deemed infringing if they mislead users and create the impression of an association with a well-known brand.

When evaluating a case, the court considers several factors, such as:

• Did the domain owner attempt to sell the domain to the brand owner?
• Did they use the domain to display ads, promote a competing business, or host harmful content?
• Does the owner have legal rights to the name (like a last name)?

If the court finds that the actions constitute cybersquatting, it may:

• award damages of up to $100,000 per domain name;
• transfer the domain to the rightful trademark owner; or
• order the cybersquatter to cease using the domain.

European Union

In the European Union, the fight against cybersquatting is governed by both general intellectual property rules and specific dispute resolution mechanisms managed at the domain registrar level.

A key international instrument used in the EU is the Uniform Domain Name Dispute Resolution Policy (UDRP). Developed by the World Intellectual Property Organization (WIPO) and approved by ICANN, this policy is designed to resolve domain name disputes efficiently.

How UDRP Works:

• It allows disputes between trademark holders and domain owners to be resolved outside of court (administratively).
• It applies to top-level domains such as .com, .org, .net, and regional domains where permitted (like .eu, which follows a similar procedure).

To win a UDRP case, three elements must be proven:

• The domain name is identical or confusingly similar to the trademark.
• The respondent has no rights or legitimate interests in the domain name.
• The domain was registered and is being used in bad faith.

The .eu domain has its own dispute resolution process called ADR (Alternative Dispute Resolution), which is managed by the Czech Arbitration Court. Anyone with a legitimate interest or rights in a trademark can file a complaint. The proceedings are conducted entirely online and typically take about 3 to 4 months, providing an effective alternative to litigation within the EU.

While most cases are resolved through these administrative procedures, the Court of Justice of the European Union (CJEU) has also addressed domain name disputes in the context of:

• trademark infringements in the digital environment;
• conflicts between freedom of expression and brand protection;
• interpretations of the EU Trademark Directive (Directive (EU) 2015/2436) and the EU Trade Mark Regulation

In case C-569/08 (Internetportal und Marketing GmbH v. Richard Schlicht), the Court of Justice of the European Union (CJEU) confirmed that the bad faith registration of a domain name that is identical or similar to a trademark can be considered an abuse of rights, even in the absence of direct commercial use.

To summarize all these legalese: 

• brands operating in the EU can effectively protect their interests without resorting to litigation;
• there are robust mechanisms available at both the international (UDRP, WIPO) and regional (.eu/ADR) levels;
• decisions made by the EU Court help shape legal enforcement practices across the Union, contributing to consistent and uniform standards for digital brand protection.

Thanks, European Union! We feel a lot safer now.

How buying domain names can help

Many companies understand that protecting their brand goes beyond just registering a trademark – it also involves safeguarding their digital presence, starting with securing the right domain names. This is one of the most affordable and effective ways to prevent cybersquatting.

A cybersquatter might register a domain that includes your company name, differs by just one letter, or uses a different top-level domain (like .net instead of .com). Users can easily confuse the address and end up on a fake site, leading to lost customer trust and revenue.

Purchasing your domain from a cybersquatter can cost anywhere from hundreds to tens of thousands of dollars. Registering domains in advance and owning them from the start is a much more cost-effective strategy.

How domain registration becomes a defense strategy

1. Register primary and alternate domains

• Your name: brandname.com
• Variations: brand-name.com, brandname.net, brandname.de
• Typos and lookalikes: brnadname.com, brandneme.com
• Key markets: brandname.eu, brandname.uk, brandname.asia

Amazon owns dozens of domains, including amzon.com, amazoon.com, and amazon.co.uk, to prevent others from using them for malicious purposes.

2. Consider future products and campaigns

Reserving names early for upcoming product lines, events, or even slogans can be a smart move. For instance, if you’re planning to launch a product called BrandX, it’s wise to register brandx.com and brandx.app in advance – before someone else has the chance to snag them. We’ve heard there’s this one guy with tons of money who is obsessed with naming things “X”, so yeah, our advice would be to hurry up and register those domains while it’s not too late.

3. Use professional domain registration and management services

Utilizing domain registration services like SpaceLama can help you:

• manage all your domains from one central location;
• receive timely renewal notifications to avoid losing domains unintentionally;
• automatically renew registrations;
• enable WHOIS privacy protection to keep your personal data secure.

How to protect against cybersquatting

Protecting yourself from cybersquatting requires a proactive approach — prevention is always better than dealing with the consequences.

1. Register multiple domain name variations

Cybersquatters often register domains that are visually or phonetically similar to trusted brands to mislead users. Securing these variations in advance minimizes the risk. Consider registering these variations of your domain name:

• Primary domain: yourbrand.com.
• Alternate domains: your-brand.com, yourbrand.net, yourbrand.org.
• Regional domains: yourbrand.eu, yourbrand.fr, yourbrand.kr.
• Common typos and lookalikes: yorbrand.com, yourbrnd.com.
• Brand + category: yourbrandstore.com, yourbrandapp.com.

For example, Facebook owns domains like fb.com, thefacebook.com, and even facebok.com to protect its brand from misuse.

2. Monitor domain registrations and online presence

Cybersquatting often goes unnoticed until a fake website or phishing attempt causes damage. Active monitoring helps you detect and respond early. Here are some strategies:

• set up Google Alerts for your brand name and its likely variations;
• use specialized services like MarkMonitor or DomainTools to track suspicious registrations; and
• regularly check WHOIS databases to identify similar or misleading domain name registrations.

3. Protect your trademark through legal registration

Having a registered trademark provides you with strong legal grounds to take action against cybersquatters. To enhance your protection:

• register your brand as a trademark in your home country and, if applicable, internationally (e.g., through WIPO or EUIPO); and
• ensure that trademark protection covers digital and domain name usage

4. Use legal remedies when infringement occurs

If someone is using your brand in a domain name, you have options for both out-of-court and judicial resolution.

Out-of-Court options:

• file a complaint through WIPO under the UDRP system for domains like .com, .net, and .org. Example: LEGO has successfully reclaimed numerous domains through WIPO without resorting to lawsuits;
• for .eu domains, submit a complaint via the Czech Arbitration Court (ADR).

Judicial options:

• in the United States, file a lawsuit under the ACPA (Anticybersquatting Consumer Protection Act);
• in the European Union, pursue enforcement under the EU Trademark Regulation.

5. Choose a secure domain registrar like SpaceLama

A reliable registrar like SpaceLama is essential for your long-term domain protection. Here are some key features to look for:

• enable automatic domain renewal to prevent accidental loss of your domains;
• activate WHOIS Privacy to keep your contact details hidden from public databases;
• choose a registrar that supports DNSSEC and offers protection against domain hijacking and interception.

And, won’t you know it, SpaceLama has them all! 

---

In today’s digital landscape, cybersquatters are a real threat to your brand’s reputation and online presence. Don’t wait until it’s too late and take action now to safeguard your identity. 

By purchasing your domains from SpaceLama, you can effectively protect against unauthorized registrations and ensure that your customers find you, not impostors.

Secure your brand’s future and prevent potential damage from cybersquatting. Visit SpaceLama today to register your domains and fortify your digital presence!