The difference between being labeled a legitimate domainer or a cybersquatter depends upon one word - trademark. If you own a domain name incorporating the trademark of another you face legal and financial exposure for cybersquatting. While defenses are available, such as fair use of a generic or merely descriptive word, that may not stop an alleged trademark owner from pursuing your domain. So what is a domainer to do? The answer lies in the problem. Develop your domain in such a way that you are entitled to trademark rights distinct from those that may be claimed by a trademark owner.
The best way to do this and to mitigate your risk of being subjected to claims of cybersquatting is by developing your domain's web site and carefully selecting your web content in light of existing trademarks. When doing so, however, remember the one maxim, so to speak, that a trademark entitles its owner the exclusive right to use the trademark in connection the goods/services listed in the trademark (or the particular good/services it has offered). The operative words being "in connection with the goods/services." Put another way, trademark law allows for more than one use of a mark as long as it does not create a likelihood of confusion as to source. Keep in mind the common example of the word "delta." Trademark law allows there to be Delta Airlines, Delta Faucetts, and Delta Dental since a reasonable consumer would not assume the airline is also the manufacturer of faucetts or provides dental insurance. As long as the goods or services are distinct enough to avoid consumer confusion, you likely can avoid cybersquatting and other related claims. Therefore, developing a domain name's corresponding web site with this in mind will allow you to remain a legitimate domainer rather than a cybersquatter.
Ultimately, adhering to these three guidelines will help you:
- Just because a domain name is descriptive of what it is offering does not mean someone does not have trademark rights in it by having acquired distinctiveness (i.e. descriptive marks are entitled to protection if they have acquired secondary meaning);
- Control all content, links, and AdWords place on your web site (you are ultimately responsible for them and would not want to be redirecting to a competitor of a trademark owner);
- One bad domain can spoil the entire bunch. Should you be subjected to a domain dispute, possessing one clearly cybersquatting domain name within your domain portfolio can negatively impact your ability to defend what may be a legitimately held domain.
Source: Brian Hall writing for DomainNews.com - June 3rd, 2008