Domain Name Legalities
Choosing the proper domain name is pretty important stuff. You want something that will stick in the minds of the masses, something unforgettable. You also need to be careful that you aren't breaking trademark laws by using a name that might be confused with a famous brand or celebrity. Your hosting provider should be warning you against this practice, called cybersquatting, to avoid litigation. In case they don't, here's why you need to think carefully about the domain name you choose.
The Domain Name Legalities or Domain Law
When a person or business registers a domain name that uses the name of a person or business without prior consent, or chooses to use a domain name in a way that impacts the trademarked person or business, a Uniform Domain-Name Dispute-Resolution Policy (UDRP) proceeding will take place. You might feel that your intentions are innocent, but using the name of another company or person is a no-no. It violates the Anticybersquatting Consumer Protection Act (ACPA) which was enacted in 1999. 
For example, a blog designer was sued by Cosco Management Inc. and Dorel Juvenile Group, prominent manufacturers of children's furniture and equipment, for the name of her client's blog, BabyOnBored.net which was registered in 2009. The company makes the popular “Baby on Board” signs, and company execs felt that the “Baby on Bored” site would confuse consumers by “diverting them from the trademarked brand,” and taking away business. As innocent as this blog was, because it sounded so similar to the product itself, there were grounds for a lawsuit.
Famous Or Not
Even if you think you're out of the water, you may still be copying an average ordinary person or business name. Why does this matter? You may end up being sued. Famous or not, the same rules apply. Your hosting provider should make sure that this doesn't happen — but that's not always the case, so make sure to do your homework.
Don't Sell That Name
Also illegal: the sale of the copycat domain name you registered. Think you can setup up a domain using a trademarked name or brand, and then sell that name back to the originator without consequence? This is called extortion, and it's is one “get rich quick!” scheme that definitely doesn't work!
Don't Be The Victim
What if someone tries to sell your business a domain name they've registered deliberately just to make you pay? Find a lawyer immediately.
What if this cybersquatter is tarnishing your business by posting negative comments and reviews using your company name? This tactic is sometimes used just to entice a businesses to purchase domain names — a mere pressure tactic that doesn't sit well with the domain law. The first step you should take is to contact your hosting provider.
Sometimes, a hosting provider can work out the wrinkles without costing you any hefty lawyer fees.
A simple arbitration can settle things in most cases. Your hosting provider might suggest purchasing the domain name the moment it is due for renewal. Or, you can ask your hosting provider to purchase the name for you.
What If I Am Accused Of Cybersquatting?
Start by contacting your hosting provider. If simple arbitration is out, you'll want to contact a lawyer well-versed in cybersquatting laws, the ACPA, and the UDRP. Don't communicate with the accusing company or individual. Any correspondence can be used against you in court — and, yes, email correspondence is legal proof! It's best to let your lawyer handle this.
Guilty As Charged?
The penalty for cybersquatting is $100,000 per domain name. That's a lot of money to pay if you just made a simple mistake. Choose your domain name carefully, do not try to extort a company or person by selecting a branded name, and always contact your hosting provider in the case of disputes. Otherwise, you may just wind up in court!
