Legal Matters: Keep It in Your Domain

In the first century B.C., the Roman author Publilius Syrus wrote: “A good reputation is more valuable than money.” More than two millennia later, it remains true that a merchant’s brand, which carries its reputation, is its most valuable asset. Consequently, the piratical misuse of brand names on the Internet is a persistent problem that plagues many online retailers.

“Cybersquatting” refers to the unauthorized registration of a domain name that incorporates a trademark belonging to someone else. This modern form of reputation theft is surprisingly easy to commit. Domain names can be obtained from various companies that are authorized to ensure a domain name, for which they receive an application, is unique and not currently in use. But these companies don’t determine whether the domain name being registered rightfully belongs to someone else.

Naturally, the reason cybersquatters register other companies’ brand names is to make money. In many instances, they hope to profit when the rightful owner of the brand seeks to use its trademark as a URL on the Web, only to find that someone else already has registered it. The true owner may find it cheaper to purchase the domain name, rather than pursue legal remedies.

And Then There’s Click Fraud
Other times, the domain name might be used to “game” the trademark owner’s online affiliate program through “click fraud.” Click fraud occurs when an Internet user mistakenly navigates to a site owned by a cybersquatter while trying to reach the Web site of a bona fide retailer.

For example, an Internet shopper might mistakenly type “jcpeney.com” in the location bar of a Web browser instead of “jcpenney.com.” Upon arriving at the site located at “jcpeney.com,” the user automatically may be redirected to the correct Web site. In the process, however, the cybersquatter collects a referral fee from the bona fide merchant based upon the clickthrough.