Registering a Domain Name Before a Startup is NOT Cybersquatting!
If a startup uses a “hack” or some other creatively spelled domain name because the correct spelling is previously registered, the owner of the correctly spelled domain name is NOT a cybersquatter! I don’t care how popular a startup becomes, if the domain owner had his domain name first, it is NOT cybersquatting! The only way it may become cybersquatting is if the domain owner later monetizes the domain name in a manner that infringes on the marks of the startup (as long as it is not descriptive).
I understand that some startups and companies cannot afford to spend a lot of money for a domain name. It is perfectly acceptable to be creative when it comes to branding. However, they can not and should not expect to build a brand on a confusing domain name and be able to get the previously registered exact match domain name for anything less than fair market value. Using the legal system or UDRP system to try and “steal” a domain name is reverse domain name hijacking.
I also understand that some people do not like the business of domain name investing. I would imagine many of these people have tried to register a domain name that has been registered for many years, and the owner of the domain name was unwilling to sell it for a “reasonable” price. You are welcome to disagree with this business, but calling domain investors cybersquatters is likely inaccurate. It could also potentially be legally actionable since cybersquatting is an illegal act and calling a legitimate investor a cybersquatter is likely damaging (in my non-legal opinion).
I think domain names are similar to undeveloped real estate. Many years ago, people settled on land or bought tracts of land that were not worth much money at that time. As time went on, the land became much more valuable. It isn’t unheard of for a person to sell a piece of property for millions of dollars when they spent thousands of dollars for it decades ago. Just like desireable land and property grows in value, desireable domain names also increase in value.
When a prospective domain name buyer tells me that my price is ridiculous (or something along those lines), I want to ask them if they would sell one of their unused domain names for much less than the market would bear because I want to use it to make money for my business. I would also like to ask if one of their ancestors had owned 5 acres of undeveloped land in Beverley Hills, would they sell it inexpensively because it was once free and it is being unused. Of course they wouldn’t.
A startup or business makes a conscious decision to use confusing branding or spelling when they don’t want to (or can’t afford to) buy the exact match .com domain name for their brand. There are various options to secure the domain name (financing the purchase, option to buy in the future, lease to own…etc). Their business decision may be short sighted if they don’t secure it, but it does not make the owner of that domain name a cybersquatter.
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