Are Domain Name Registrars Responsible For Cybersquatting Issues?

Imagine people typing in a domain name the thought would lead to your website and finding themselves at one of a NSFW variety.

That has been a major issue for international resource company Petronas over the past 10 years.

The Malaysian government-owned entity holds a US Trademark for “Petronas” and owns the Petronas Twin Towers in Malaysia, but in 2003 a third party registered the domain names and via domain name registrar GoDaddy.

Then, in 2007, the third party began using GoDaddy’s domain forwarding services to direct these two domain names to the adult web site

Petronas was concerned, and raised the issue with GoDaddy. While GoDaddy did investigate the alleged cyberquatting, no action was taken so Petronas took matters further by suing them.

But do domain name registrars hold responsibility for cybersquatting? While Petronas saw it that way – alleging, inter alia, cybersquatting and contributory cybersquatting – the U.S. legal system did not.

As U.S. intellectual property litigation specialist Teri H.P. Nguyen explains:

“Petronas argued that the ACPA provides a cause of action for contributory cybersquatting since Congress placed the ACPA within the Lanham Act, and by so doing, intended to incorporate common law principles of secondary liability,” she wrote in an article for legal website Lexology.

The court disagreed with Petronas, however, ruling that GoDaddy was not responsible. But to really understand the role domain name registrars play in cybersquatting, it helps to look at the issues in further detail.

Cybersquatting Issues and Protection

Opportunists that register specific domain names in the hope of reselling to companies at a higher price are often considered “cybersquatters”.

This practise – which could involve domain names with words and phrases linked to a registered trademark or domain names that have potential – has both legal and illegal sides to it but is frustrating for anyone that has gone through the process of registering a trademark before looking at domain names.

Or, in the case of some companies, others could snatch up relevant domain names with no apparent need for them (apart from the potential profits they may get through re-selling the domain names).

Cybersquatting has become such a big issue that there is even a law against it in the United States – the Anticybersquatting Consumer Protection Act (ACPA).

The Harvard Law website explains that ACPA is designed to give trademark holders “a cause of action against anyone who, with a bad faith intent to profit from the goodwill of another’s trademark, registers, traffics in, or uses a domain name that is identical to, or confusingly similar to a distinctive mark, or dilutive of a famous mark, without regard to the goods or services of the parties.”

That means trademark holders can bring cases against people they believe is cybersquatting, often leading to the shutdown of damaging websites.

But responsibilities between all parties can be unclear, particularly when it comes to the role of domain name registrars. Ultimately these companies are third parties that may not even be aware of the issues, so trying to lay blame with registrars will probably not do much good.

While contacting a domain name registration service that could be implicated in cybersquatting is a good step towards reducing or preventing issues, as the Petronas case highlights, there are other steps that need to be taken to make sure justice is served.

dtrade are domain name experts specialising in Sales, Acquisitions, IP Services and Consulting.


Stay informed with dtrade's premium domain newsletter.

Copyright 2017 - dtrade® Pty Ltd - dtrade is a registered trademark : 1570224 Google+