Domain Squatting – When Domain Registration Becomes Illegal

Has anyone registered a domain that has the same or a similar name as the one you are entitled to?

We have recently dealt with a case where one of our clients wanted to register a domain with the name of its company, but found that this domain had already been registered by their direct competitor who used it to redirect visitors to the website of their company.

Such conduct, if it occurred and the following conditions are met, is called domain squatting or cybersquatting. The domain holder had blocked the domain and used in as a mean for direct competition. In most cases, the holders occupy the domain, so they can later offer to sell it for a large sum of money.

Cybersquatting is defined in Article 4 of the Uniform Domain-Name Dispute-Resolution Policy of ICANN. It consists of the registration of a domain name that is identical or interchangeable with a trademark, a company name, or a sign to which the complainant is entitled, where the holder of the domain name has no legitimate intentions with the domain in question and the holder has registered the domain name in bad faith.

In the case of our client, the above-mentioned requirements were met. At the same time, under Czech law, the domain holder was involved in unfair competition, in particular, the risk of confusion and reputation parasitism. In this case, the competition also interfered with our client’s industrial property rights.

Czech legislation contains quite a few institutions that protect persons from such illegal acts and which persons can use to effectively defend themselves.

A person whose rights have been infringed may demand, in particular, the refraining from such conduct, the elimination of the consequences of the defective condition, the loss of profit, compensation for damage, the issuance of unjust enrichment, and reasonable satisfaction.

With regard to offences, the Consumer Protection Act defines unfair commercial practices. Unfair business practice means an offence that consists of conduct that is capable of significantly disrupting the economic behaviour of the consumer for whom it is intended. This was fulfilled by redirection from the domain registered in the form of our client’s name to the competitor’s website. Supervision of unfair commercial practices is performed by the Czech Trade Inspection Authority, which can impose fines that can reach millions of crowns.

With the above-mentioned conduct, the competition may have also committed the criminal offence of infringement of the regulations for the rules of competition and the criminal offence of infringement of the rights to trademarks and other designations.

At STUCHLÍKOVÁ & PARTNERS, we have extensive experience with such cases. Contact us at info@stuchlikova.com and arrange an initial free consultation.

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