Editing Domain name speculation (section)

==Distinction from cybersquatting==
A common accusation against domain name speculation is that it is cybersquatting.<ref>{{cite web|url=http://news.cnet.com/Domain-restrictions-target-cybersquatters/2100-1023_3-225278.html |title="Domain restrictions target cybersquatters" news.com 03 May 1999 |publisher=News.cnet.com |access-date=15 November 2011}}</ref> [[Cybersquatting]] is defined as registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. The key element in this definition is that the intellectual property rights of another's trademark are infringed by the cybersquatter. For a UDRP action to succeed one of the things that the complainant has to establish is that the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights.<ref>{{cite web|url=http://www.icann.org/en/dndr/udrp/uniform-rules.htm |title=UDRP rules |publisher=Icann.org |access-date=15 November 2011}}</ref> Legitimate domain name speculation tends to steer clear of trademarks and concentrate on generic words and phrases{{citation needed|date=August 2016}} as domains based on trademarks can be subject of [[UDRP]] actions by the trademark owners. As the number of registered domain names has increased, the number of [[UDRP]] cases has also increased.<ref>{{cite web|author=WIPO |url=http://www.wipo.int/pressroom/en/articles/2009/article_0005.html |title=WIPO Press Release on Rise of UDRP Cases |publisher=Wipo.int |access-date=15 November 2011}}</ref> Trademark and [[service mark]] owners now use brand protection services that monitor TLDs for newly registered domains that potentially infringe on their trademarks. This is due in part to [[typosquatting]], a form of cybersquatting where variations of the spelling of a brand's domain will be registered in an attempt to profit from users mistyping the [[URL]] of the site they wish to visit.<ref>http://www.eweek.com/c/a/Security/Microsoft-Ships-URL-Tracer-to-Hunt-Down-TypoSquatters/ {{Dead link|date=February 2022}}</ref><ref>{{cite web |url=http://research.microsoft.com/en-us/um/redmond/projects/strider/typo-patrol/screenshots.htm |title=Microsoft's Strider URL Patrol |publisher=Research.microsoft.com |access-date=15 November 2011 |archive-url=https://web.archive.org/web/20111113210415/http://research.microsoft.com/en-us/um/redmond/projects/strider/typo-patrol/screenshots.htm |archive-date=13 November 2011 |url-status=dead }}</ref><ref>{{cite web |url=http://research.microsoft.com/en-us/um/redmond/projects/strider/urltracer/Parked_Domains.htm |title=Examples of typosquatted domains detected by Microsoft's Strider project |publisher=Research.microsoft.com |access-date=15 November 2011 |archive-url=https://web.archive.org/web/20120307214501/http://research.microsoft.com/en-us/um/redmond/projects/strider/urltracer/Parked_Domains.htm |archive-date=7 March 2012 |url-status=dead }}</ref>

Generic terms, such as the term "salt" when used in connection with sodium chloride, are not capable of serving the essential trademark function of distinguishing a product or service. This means that generic terms are generally not afforded any legal protection.<ref>[[Trademark distinctiveness#Generic terms|Why generic marks are not generally afforded legal protection.]]</ref> The Canned Foods, Inc. v. Ult Search Inc. decision<ref>{{cite web|url=http://www.adrforum.com/domains/decisions/96320.htm |title=Canned Foods, Inc. v Ult. Search Inc. National Arbitration Forum Decision |publisher=Adrforum.com |access-date=15 November 2011}}</ref> specifically deals with a case involving a generic term, "Grocery Outlet" and the domain name "groceryoutlet.com". The decision contains the key sentence "Generic terms receive no protection in US trademark law when they are used to label the goods and services that they describe."

Cybersquatting was first used as a legal term in March 1998 by a U.S. District Court in California in the case of ''[[Avery Dennison]] vs Sumpton''.<ref name="origins_cybersquatting">{{cite web|last1=Isenberg|first1=Doug|title=The Origins of 'Cybersquatting'|url=http://www.gigalaw.com/2015/11/18/the-origins-of-cybersquatting/|access-date=15 June 2016}}</ref> An early definition of the practice was given in ''[[Intermatic]] Inc. v. Toeppen'', 947 F. Supp. 1227 (N.D. Ill. 1996). The definition was "These individuals attempt to profit from the Internet by reserving and later reselling or licensing domain names back to the companies that spent millions of dollars developing the goodwill of the trademark."<ref name="intermatic_case">{{cite court|litigants=Intermatic Inc. v. Toeppen|court=N.D. Ill.|date=2001-03-22|url=https://archive.org/details/gov.uscourts.ilnd.58935|title=|access-date=15 June 2016}}</ref>

As domain name speculation has evolved alongside the domain name system, the most memorable and shortest domains tend to be amongst those registered first in any TLD. For old TLDs like [[.com|COM]] (introduced in 1985), these domains will be long gone and people registering their first domains are often frustrated at the lack of short and memorable domains in this and other mature TLDs.<ref>{{cite magazine|url=http://www.inc.com/magazine/20090701/good-domain-names-grow-scarce.html |title=Good Domain Names Grow Scarce – Inc Magazine, 01 July 2009 |magazine=Inc.com |date=1 July 2009 |access-date=15 November 2011}}</ref>

One of the main problems concerning trademarks and domain names in [[Unrestricted gTLDs#Unrestricted gTLD|unrestricted]] TLDs and gTLDs is that of trademarks in general: the rights of the trademark owner have to be asserted in order to protect the trademark. The trademark owner has to take legal action, typically a [[UDRP]], to defend the trademark after the potentially [[Trademark infringement|infringing]] domain has been registered. The [[UDRP]] action has to follow a procedure of notifying the respondent, receiving a reply from the respondent, appointing an adjudication panel and awaiting a decision. The process can take two months or more<ref>{{cite web|url=http://www.internic.net/faqs/udrp.html |title=How long does it take to decide a UDRP case? |publisher=Internic.net |access-date=15 November 2011}}</ref> and all costs (typically more than [[US dollar|$]]1,000 even for a single domain) are borne by the complainant, while the infringing party stands to lose nothing except the registration fee (usually under $10) for the original domain and the registrar of the infringing name incurs no penalty at all.

The global and unrestricted nature of TLDs and gTLDs effectively means that anyone in any country can register a domain name in them regardless of whether they have any intellectual property rights in that name. With [[ccTLD|country code TLD]]s the jurisdiction is more clearly defined. The affected intellectual property rights owner would have to take a legal action, typically a [[UDRP]] case to transfer or cancel the domain unless the registrant is in the same jurisdiction as the affected intellectual property rights owner. In this case, local law may be sufficient as the action may be considered as [[common law]] [[tort]] of [[passing off]].<ref>{{cite web|url=http://www.nominet.org.uk/disputes/caselaw/index/million/ |title=(UK Registry) The "One in a Million" Court Case which dealt with domain names and passing off |publisher=Nominet |access-date=15 November 2011}}</ref><ref>{{cite web|url=http://www.nominet.org.uk/disputes/caselaw/index/million/millionjudge/ |title="One In A Million" Judgement. 28 November 1997 |publisher=Nominet.org.uk |date=28 November 1997 |access-date=15 November 2011}}</ref>