The problem was that there was no clear legal position on what was purely domain name speculation and what was cybersquatting.The open nature of the TLDs meant that anyone could effectively register any domain name.
Trademark and service mark owners now use brand protection services that monitor TLDs for newly registered domains that potentially infringe on their trademarks. The definition was "These individuals attempt to profit from the Internet by reserving and later reselling or licensing domain names back to the companies that spent millions of dollars developing the goodwill of the trademark." One of the main problems concerning trademarks and domain names in unrestricted TLDs and g TLDs is that of trademarks in general: the rights of the trademark owner have to be asserted in order to protect the trademark.
This is due in part to typosquatting, a form of cybersquatting where variations of the spelling of a brand's domain will be registered in an attempt to profit from users mistyping the URL of the site they wish to visit. The trademark owner has to take legal action, typically a UDRP, to defend the trademark after the potentially infringing domain has been registered.
Domain name speculation is the practice of identifying and registering or acquiring Internet domain names as an investment with the intent of selling them later for a profit.
The main targets of domain name speculation are generic words which can be valuable for type-in traffic and for the dominant position they would have in any field due to their descriptive nature.
Hence generic words and phrases such as poker, insurance, travel, creditcards, sex and others are attractive targets of domain speculation in any top-level domain.
The speculative characteristics of domain names may be linked to news reports or current events.
specifically deals with a case involving a generic term, "Grocery Outlet" and the domain name "groceryoutlet.com". The global and unrestricted nature of TLDs and g TLDs effectively means that anyone in any country can register a domain name in them regardless of whether they have any intellectual property rights in that name.
The decision contains the key sentence "Generic terms receive no protection in US trademark law when they are used to label the goods and services that they describe." Cybersquatting was first used as a legal term in March 1998 by a U. District Court in California in the case of Avery Dennison vs Sumpton. With country code TLDs the jurisdiction is more clearly defined.
However, the effective period during which such opportunities exist may be limited.