Is Cybersquatting Against the Law?

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The George W. Bush Library Foundation has retrieved its domain name. A small Internet company had bought www.georgewbushlibrary.com for less than $10 after it expired and then sold it back it to the library for $35,000. Is that legal?

Probably not. Cybersquatting, the practice of buying up a domain in order to profit from a trademarked name, is prohibited under the 1999 Anticybersquatting Consumer Protection Act as well as a set of international guidelines called the Uniform Domain-Name Dispute-Resolution Policy. (Disputes are usually mediated by the National Arbitration Forum or the U.N.'s World Intellectual Property Organization.) Both systems were created to protect companies, celebrities, and even Joe Schmoes from having their names exploited online for commercial purposes. To sue someone for cybersquatting, you have to show that they acted in "bad faith," meaning they deliberately registered a certain domain in order to profit off your name. For example, if someone buys JenniferLopez.com and puts ads up to generate income from random visitors, that's considered bad faith. Same with trying to sell the site back to its rightful owner for a hefty profit, as in the case of the presidential library. (An example of "good faith," meanwhile, might be registering Georgewbushlibrary.com as a nonprofit repository for articles about the president.)

There may be added protection for domains that are named after celebrities. In most states, famous people have a right of publicity that prohibits anyone else from profiting off their names or personas. Celebrities can also argue that they have common law rights to the trademark of their own names. In 2000, Madonna won a lawsuit against a cybersquatter who had bought Madonna.com and set up a porn site. (The same guy registered, among other names, wallstreetjournal.com.) Likewise, Hillary Clinton won a case in 2005 against an Italian woman who had bought the domain name Hillaryclinton.com. (See a list of domain name disputes here.)

The First Amendment makes it legal to grab even a famous person's domain name in some situations: You might not get Hillaryclinton.com, but you could register Ilovehillaryclinton.com if you're planning to use it for nonprofit political speech. You may also be able to use an established name if you're setting up your own, unrelated company. If the domain name for Delta Airlines expired and you bought it up for your competing airline, that would be against the law. But if you were promoting a very different kind of company—Delta Plumbing, for example—then you'd be within your rights to use Delta.com. As long as you're not profiting off a person or company by misrepresenting them, you're probably OK.

Indeed, there's a whole industry of so-called domain "tasting," whereby companies buy up recently expired domain names, test their traffic ratings, and estimate their profitability. (Sites like SnapNames.com and Pool.com will tell you when certain domain names are about to expire.) If a site is deemed a moneymaker, the company will hold on to it. If it's not, the company will give it back within the five-day grace period. The practice is legally restricted to domain names that use words you can find in the dictionary. But some companies will buy up variations or misspellings of other well-known sites—like, say, Micorsoft.com. Those sites aren't legal, but they can still turn a profit before the trademarked party notices.

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Explainer thanks Enrico Schaefer of Traverse Legal and Hank Burgoyne of Kronenberger Burgoyne.

http://www.slate.com/id/2206596?nav=wp