Cybersquatting is registering or otherwise using a website domain with bad faith attempt to derive benefit from the goodwill of a trademark belonging to someone else. This started when the internet started to get so large in the 1990s, where it was a free-for-all where people started registering so many domains. Oftentimes, the cybersquatter then attempts to sell the domain to the proper trademark owner, or redirect to a competing business.
Typosquatting is a common form of cybersquatting. This occurs when a domain is registered with a similar name to a recognizable trademark. For example, purchasing the domain "MacDonalds," when the fast food restaurant is "McDonalds." Oftentimes, larger companies will purchase multiple domain names to take this into account, but if someone purchases a website domain in a bad faith attempt to derive benefit from the proper trademark owner, that person may be liable for cybersquatting.
In order to combat cybersquatting, the US has implemented the U.S. Anticybersquatting Consumer Protection Act (ACPA) of 1999. This act is an extension of the Lanham Act, which is the federal trademark act.
Jurisdiction is frequently an issue when it comes to cybersquatting cases since domains can be registered by people in all countries through different hosting sites. This can lead to difficulty in deterring the owner of certain domains and where to try and sue them, and taking into account the laws of that country.
Twitter and Facebook have taken certain steps to try and combat cybersquatting on their sites. They attempt to prevent people registering accounts in the names of unauthorized trademarks or celebrities.
Registering your domain early is important, as is filing for trademark protection. Always do research when starting a new business or putting out a new product to ensure that you are not going have any legal issues, or at least minimize any legal issues that may arise.