Learning that a competitor is using a domain name that is identical or confusingly similar to yours is a problem frequently encountered in the internet-driven business world of the 21st century.

Cybersquatting is the purchase of a domain name in bad faith.

Usually, bad faith is the intention of selling the domain name back to the legal owner. A number of large companies (including Panasonic, Hertz and Avon) have paid large sums to buy their domain names from parties that had no legitimate right to the domain name.

What if your family name sounds like a famous name?

If your family name sounds like a trademarked name, such as McDonalds Plumbing, your use is legitimate because it is not confusingly similar to McDonalds. In some situations, the use of a family name can still be disputed by the trademark owner. For example, see the discussion about Microsofts dispute with teenager Mike Rowe about his website mikerowesoft.com (Click here: CNN.com - Teen fights to keep MikeRoweSoft.com - Jan. 20, 2004).

What should you do if someone is using a name confusingly similar to yours?

The first step is to write a letter. Before firing off a nasty cease and desist letter, read http://www.webtechniques.com/archives/2001/05/legal/ to understand how it can backfire. I recommend that you think carefully about the outcome that you want. Then, write a fact-based letter, summarizing the situation and making it clear what you want them to do (e.g., transfer or cancel the domain name by a specified date). Conclude with a statement that you hope the situation can be resolved without escalation and you need to hear from them by a specified date.

The next step - if the letter does not produce a satisfactory response - is to file a complaint with Internet Corporation for Assigned Names and Numbers (ICANN) under the Uniform Domain Name Dispute Resolution Policy (UDRP). Everyone registering a domain name automatically agrees to be bound by this policy. This is a paper-based arbitration process that is relatively quick and inexpensive compared with a court proceeding and can result in getting the domain name transferred to you. For more information see: http://www.icann.org/udrp/udrp-policy-24oct99.htm

If you want monetary damages, you have to file under the federal Anticybersquatting Consumer Protection Act (ACPA). In addition to authorizing the transfer of the domain name, the Act gives the court discretion to award statutory damages of not less than $1,000 and not more than $100,000 per domain name. For more information, see: http://www.patents.com/acpa.htm

In conclusion, there are ways to resolve domain name disputes. As always, an ounce of prevention is still better than the cure. Taking steps to register your domain name and trade/service marks are good business practices. If youve taken steps to protect your name by reserving the domain name and registering a trade/service mark, you are in a strong position to defend your rights. If you havent registered your name, there's no time like the present.