According to the federal statute designed to prevent the practice, cybersquatting is the act of "registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else." In a typical scenario, the cybersquatter offers to sell the domain name to the entity associated with the particular trademark for an inflated price. This offer to sell is sometimes viewed as evincing bad faith and therefore actionable in court if the owner wishes. In others, the offer is considered reasonable, or at least not indicative of bad faith, and therefore the trademark owner is forced to either purchase the domain or accept the consequences of the existence of a substantially similar domain name. This dilemma can create difficulties for intellectual property owners. If they wish to sue, various mechanisms exist that purport to combat cybersquatting. Most prominent of those is the statute quoted above, the Anticybersquatting Consumer Protection Act (ACPA) (15 U.S.C. §1125(d)). The purpose behind the ACPA is to "provide clarity in the law for trademark owners by prohibiting bad faith and abusive registration of distinctive marks as Internet domain names."
That said, the ACPA does not seem to have accomplished the goal of ending or even significantly curtailing cybersquatting. In fact, cybersquatting seems to have spread in recent years to newer Internet platforms like Facebook and Twitter. Moreover, it could also soon proliferate to new domain suffixes. The Internet Corporation for Assigned Names and Numbers (ICANN) is currently in the process of creating a new set of generic top-level domains (gTLDs) after voting to end what were perceived to be arbitrary restrictions on their use. gTLDs are the suffixes that conclude domain name addresses, the most prominent of which include .com, .edu and .gov. Given this decision by ICANN, the issue of how companies minimize the deleterious aspects of cybersquatting on the good will and value associated with their brand is unlikely to disappear any time soon.
