In the early days of the United States, pioneers traveled west and claimed federal land as their own. These people were called "squatters," since they claimed rights to the land simply by occupying it. In the mid-1800s, during the California gold rush, squatters became especially prominent and settled land throughout the west coast.

In the early 1990s, a new gold rush began, but this time the rush was for domain names, rather than gold. Many early Internet users saw the potential value of prominent domain names and began to register as many domains as they could. Over the course of a few years, nearly all common "dot coms" were registered. Many of these domain names were registered for investment purposes, rather than being used for legitimate websites. This practice soon became known as "cybersquatting."

Cybersquatters may own anywhere from a single domain to a few thousand domain names. These "domainers," as they are also called, typically register domain names that contain popular words and phrases. High profile domain names may generate traffic through manual "type-ins" or may simply be attractive to potential buyers. Some domainers, called "typosquatters," register domain names that are similar to well-known websites, but contain typos. The goal of these domains is to generate traffic through mistyped URLs. Generally, cybersquatters profit from their domain names by one of two ways: 1) generating advertising clicks on parked pages (single-page websites), or 2) selling the domains at a significant premium to those interested in buying them.

While some cybersquatters have made huge profits by selling high-interest domain names, others have been forced to give up domains to the rightful owners. The Anticybersquatting Consumer Protection Act (ACPA) was passed in 1999, which gives owners of trademarked or registered names legal rights to a related domain name. In general terms, the law states that users cannot register a domain name that is the same or similar to the name of a known entity. This prevents cybersquatters from extorting money from businesses or individuals by obtaining a specific domain name.

If a dispute over a domain name arises, the two parties may bring the case through a legal proceeding. However, since this is a time-consuming process, ICANN has developed the Uniform Domain Name Dispute Resolution Policy (UDRP), which givens trademark owners a simple means to retrieve domain names from cybersquatters. While cybersquatters still exist and remain prominent today, the rightful owners of certain names now have an easier (and much less expensive) way of getting the domain names they deserve.

Updated December 23, 2010 by Per C.

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