What Is Cybersquatting?

Cybersquatting is the registration of a domain name in bad faith to profit from someone else's trademark. It is also one of the most misunderstood terms in the industry — frequently misapplied to legitimate domain investing. This guide clarifies what the law actually requires, and where the line is drawn.

The Legal Definition

Under ICANN's Uniform Domain-Name Dispute-Resolution Policy (UDRP) and U.S. law (the Anticybersquatting Consumer Protection Act, ACPA), cybersquatting requires more than merely registering a domain that contains a trademark. A complainant must generally establish three elements under the UDRP:

1. The domain is identical or confusingly similar to a trademark in which the complainant has rights.
2. The registrant has no legitimate interest in the domain.
3. The domain was registered and is being used in bad faith.

All three must be shown. This is why many complaints fail — and why legitimate investors can and do win.

What Constitutes Bad Faith

• Registering primarily to sell to the trademark owner for profit.
• A pattern of registering others' marks without legitimate use.
• Using the domain to divert users or create confusion for commercial gain.
• Offering to sell to the rights holder while knowing of the mark.

Cybersquatting vs. Legitimate Domain Investing

Registering generic, descriptive, or dictionary-word domains with intent to resell is lawful investing, not cybersquatting. The distinction turns on whether the registrant targeted a specific trademark in bad faith. Investors who document legitimate interest, avoid targeting marks, and use domains genuinely are routinely protected under UDRP precedent.

The Scale of Enforcement in 2026

Enforcement has industrialized. WIPO administered more than 6,200 UDRP cases in 2025 — a record — and surpassed 80,000 lifetime cases. Early 2026 has seen a surge in "mega-cases," single complaints targeting hundreds of domains at once, driven by coordinated cybersquatting networks and portfolio-wide brand enforcement.

If You're Accused — or You're a Rights Holder

• Investors: respond to any UDRP complaint promptly and on the three elements. Document your legitimate interest. Ignoring a complaint results in a default loss.
• Rights holders: confirm you can prove all three elements before filing. Consider whether the registrant has a plausible legitimate interest to avoid a failed complaint or a reverse-hijacking finding.