A word of caution to startups that think someone is squatting on a domain name


It’s a conversation that I have at least monthly, and lately I feel like it’s happening even more frequently. I’ll be talking to another startup founder and they’ll say, “we want to rebrand but a squatter is sitting on our domain name, so we’re going to get our lawyer involved.” To which I usually respond by saying, “why do you think they are guilty of cybersquatting?” This usually leads to a blank stare, and often once they do contact their lawyer, it turns out that their lawyer doesn’t know very much about domain name law and the UDRP process.

Here’s the deal.

Just like my parents bought a house 30 years ago and can sell it for a lot more than they paid, so can someone who bought digital real estate five or ten years ago. I know plenty of people who own property, don’t live it themselves, and then charge more money than they paid for someone else to buy that property. Be it physical or digital, that’s fair game.

What’s not fair game is someone finding out that your company is called “Cool Bean Corp” and going out and registering “CoolBeansCorp.com” and then putting up a site that looks confusingly similar to yours in order to trick people into thinking they are you. That’s squatting and it’s a totally shitty thing to do and there’s a legal process called a UDRP that you can use to get a domain name in this scenario.

Then there’s the case of generic domains that people invest in.

This can be single words, two-words, three words, three characters, etc. Investors buy these domains like real estate investors buy homes in the hopes of selling them for a profit. Now where confusion comes in is when startups or business owners in general don’t know the law and think anyone that owns a domain name that isn’t using it directly for their business is a squatter. If this was the case then Google, Facebook, Microsoft, and plenty of other businesses big and small would be squatters, but the reality is, they’re not.

If a startup or small business decides to go after a domain owner they consider to be a squatter, and they’re wrong then they could get hit with a Reverse Domain Name Hijacking claim, essentially saying that they tried to abuse the UDRP system to steal a domain, and this is bad, really bad, and has far reaching consequences.

Here’s an example.

The business behind Queen.dk recently tried to get Queen.com through a UDRP, they thought that the owner of Queen.com was squatting and tried to take the domain through a UDRP. Obviously, it’s pretty easy to look at Queen.com and know that this is a generic word that could be used by a zillion other businesses. That’s what the arbitration panel found as well and the owners of Queen.dk then got hit with a Reverse Domain Name Hijacking.

One of the most famous domain investors on the planet, known as the Domain King, actually runs a site called HallOfShame.com where he posts people and companies that have tried to steal domain names from domain investors. On this site he also explains a bit more about what Reverse Domain Name Hijacking is and how you could end up with your name and your company name stuck on the Hall Of Shame forever…

Reverse Domain Name Hijacking is when an person or entity tries to steal a domain name from the rightful and legal owner by claiming Trademark Infringement and/or Bad Faith among other fabrications in order to get a governing panel to award them the domain name. In lay terms, they are folks too cheap to pay the owner and so they abuse the process and try to steal or hijack the domain name that they have no rights to whatsoever. Panels may find that they are guilty of this practice and not only deny their claim but find that the over reach is in deed Reverse Domain Name Hijacking. (RDNH). At HallofShame.com we expose these people, companies and the attorneys that represent them and sometimes aid and abet! (Source – HallOfShame.com)

So next time you come up with a domain name that you want to buy, find out its taken, and immediately label the owner a squatter. Think twice about what you do next, because taking legal action could end up costing you a lot more than you think.

Morgan Linton

Morgan Linton