In the early days of the Internet, enterprising and oftentimes unscrupulous persons would reserve domain names that were the same as or similar to the trade names and trademarks of others and then offer to sell those domains, at high fees, to their “rightful” owners. This practice was known as “cybersquatting.” The Anticybersquatting Consumer Protection Act of 1999 (ACPA) was enacted to combat such activity. The ACPA prevents those who do not have a legitimate business or personal reason for doing so from reserving Internet domain names that encroach on the trademarks and trade names of others. A variation on the classic cybersquatting theme is known as typosquatting. Typosquatters reserve domains that include misspellings of another’s trademark or trade name and capitalize upon Internet users who mistakenly type a commonly misspelled address for a webpage to redirect traffic to an unrelated website. Typosquatters often collect revenue when the errant Internet visitor clicks advertisement links on their web page.
Cybersquatting, typosquatting and similar tactics have led to an increasing number of domain dispute arbitration requests being filed with the World Intellectual Property Organization (WIPO), a group that handles approximately half of such disputes. Many domain owners tend to prefer arbitration as a comparatively inexpensive dispute resolution tool. Complainants initiate the process by alleging a bad faith violation of their intellectual property rights. In a successful arbitration, the complainant typically recovers the disputed domain. However, economic damages are not available in arbitration. Typically, resolution occurs a few months after filing of the complaint.