The US Senate Judiciary committee has approved a bill that would make the growing trend of cybersquatting illegal.
The Anti Cybersquatting Consumer Protection bill seeks to prevent people from registering Internet domain names solely for the purpose of selling them later. Cybersquatters target famous companies that have yet to register their trademarked name as a domain name.
The bill will also give trademark owners the power to cancel the registration of the infringing domain and transfer it to themselves if they are unable to locate the person who registered it.
Supporters of the bill say that incidents of cybersquatting result in consumer fraud and public confusion as to the true source or sponsorship of products and services as well hindering ecommerce.
The bill will allow trademark owners to recover statutory damages in cases where it was proven that a trademarked name was registered in bad faith by a person who intended to profit from the sale.
It is unclear to what extent the bill will effect businesses outside of the US that have registered a .com, .org, or .net domain.
Ivan Pope, managing director of UK domain registry Netnames said he was concerned that the bill would encourage “reverse hijacking” where any large company will be free to force any company trading legally under the same, or just a similar name, to hand over their domain name.
“Companies will use it brutally if they want to,” he said.
While the bill is targeting unscrupulous people who register a domain for a profit, Pope believes legitimate businesses may be unfairly hit.
For example, he said, a person can register a name with the intention of setting up a business, but it may never get off the ground and they later decide to sell the name as an asset. Even though it was registered in good faith, under the new law they will be treated like a criminal, forced to hand it over and pay damages.
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