Cyberquatting, also referred to as domain squatting is when one sits on a domain that they have no intentions of using for a business or personal site. Rather, a cybersquatter’s goal is to make a profit from selling the domain name, when it becomes in high demand. Cybersquatting has occurred at an alarming rate, with the rapid growth of internet use. Many people are purchasing popular or even household names to acquire financial gain, later selling them to their rightful owners.

Not only are squatted sites used for turning an easy profit, they serve another advantage. Domain names on squatted sites are generally popular, giving the squatter the opportunity to make money by using ads to redirect internet traffic that has landed on their site by mistake. Additionally, not only will squatters snatch up potentially useful domains, they will also watch for lapses in the registration of domain names that are in use, or purchase variations of domain names that may result from typos.

When squatters are able to re-sell their domain names, the return on their investment can be 1000% or more. However, squatting is thought to be an unethical practice in most cases, resulting in over 2,000 lawsuits per year. The result in more than 85% of these cases is the domain being transferred to its rightful owner.

Efforts are being made to minimize the unethical practice of cybersquatting on a national level. The United States has passed a federal law, known as the Anticybersquatting Consumer Protection Act. This act prohibits cybersquatters from using a trademark belonging to someone else, in order to create personal gain. While court systems have been used to sort out domain ownership issues, a designated dispute process has been developed by the Internet Corporation for Assigned Names and Numbers (ICANN). They recommend that any alleged bad-faith domain registrations are resolved by utilizing the Uniform Domain Name Resolution Policy, and following their procedures.