With the expansion of available new generic top-level domains (gTLDs) trademark owners and businesses has been presented with numerous alternative options beyond .COM to establish their online presence. Among these, the .SHOP gTLD has become particularly popular for e-commerce websites. However, no good deed goes unpunished and with the expanded opportunities for brand owners also comes with it ever more opportunities for bad actors to engage in cybersquatting.

What is Cybersquatting?

Cybersquatting, sometimes also referred to as typosquatting, is the abusive practice of targeting trademark-branded domain names for registration with the bad-faith intent to profit from the goodwill of associated with the targeted trademark. This practice, if unchecked, can lead to significant financial and reputational damage for businesses, as it often involves the misuse of brand names in the furtherance of fraudulent and other malicious and illegal cybercrimes.

The .SHOP gTLD and Its Appeal

The .SHOP gTLD is designed specifically for online retail and e-commerce businesses to identify their businesses more easily as such online. However, as noted above, this attractiveness also makes it a prime target for cybersquatters who aim to exploit the goodwill associated with the targeted brand.

Impact on Businesses

Cybersquatting in the .SHOP gTLD can have several negative impacts on businesses:

1. Financial Losses: Brand owners may have to spend significant amounts of time and money to reclaim their domain name(s) through legal proceedings or by purchasing the domain from the cybersquatter.
2. Reputational Damage: Customers who are misled by cybersquatted domains may have negative experiences, for example, a consumer having their personal information stolen from the cybersquatter posing as the brand owner, which can harm the brand’s reputation.

Legal Remedies

Businesses affected by cybersquatting in the .SHOP gTLD have several legal avenues to pursue:

1. Uniform Domain-Name Dispute-Resolution Policy (UDRP): This is a process established by the Internet Corporation for Assigned Names and Numbers (ICANN) for resolving disputes over domain names. It allows trademark owners to file a complaint to recover or cancel the domain name registration by establishing that the domain is identical or confusingly similar to the brand owners trademark, the registrant does not have any rights or legitimate interest in the domain, and the domain was registered and is being used in bad faith.
2. Uniform Rapid Suspension (URS): This is a domain name dispute resolution policy designed to provide a quick and cost-effective way for trademark owners to address clear cases of domain name infringement. It complements the UDRP by offering a faster and lower cost path to relief; however, the remedy available in a URS proceeding is limited to suspending the registrant’s ability to use the domain during the life of the registration.  Once the registration lapses, the domain becomes available again to be registered by the general public.
3. Anti-Cybersquatting Consumer Protection Act (ACPA): In the United States, this act provides a legal remedy for trademark owners against cybersquatters. It allows for the recovery of damages and the transfer of the domain name.

Since launching in September 2016, more than 1,600 .SHOP domain names have been the subject of domain dispute resolution proceedings making it the fifth most popular gTLD for cybersquatters.[1]

Preventive Measures

To mitigate the risk of cybersquatting, businesses can take several proactive steps:

1. Register Multiple Domains: Consider registering your brand across multiple gTLD extensions as well as consider common misspellings of your brand name.  The goal being to minimize the “supply” available to the cybersquatters.
2. Monitor Domain Registrations: Engage with a domain name registration monitoring service to implement a monitoring service to provide early warning of newly registered potentially infringing domains.
3. Trademark Registration: Seek to register your trademarks in each and every jurisdiction in which you are conducting business to enhance and strengthen your trademark rights.
4. Internal Guidelines: Developing a standing strategy for addressing identified instances of cybersquatting can allow brand owners to address small problems quickly and efficiently in their infancy before they manifest into larger and more expensive issues to deal with.

Conclusion

Cybersquatting in the .SHOP gTLD, or any other gTLD for that matter, is a significant issue that affects businesses of all sizes. By understanding the risks and taking proactive measures to address these risks, businesses can protect their online presence and maintain their brand integrity. Proactive measures, such as robust trademark portfolios, AI-powered monitoring tools, and clear internal guidelines for addressing cybersquatters, are essential for safeguarding brand integrity in this new era.