The US administration passed the Anti-Cybersquatting Consumer protection in August 1999. The law enable trademark holders to obtain civil damages of a maximum amount of USD100k from those that register their trade names or similar-sounding names as domain names.
There was a case in 1999 where a domain was sold for one million USD. That domain was registered in 1994 at a cost of USD 70. The domain was wallstreet.com There were people who registered a common name and name combination they can think of with the hope of selling it a exorbitant prices and make a life time killing. Registering an Internet domain name for the purpose to sell later for a profit is termed as Cybersquatting
Generally, the victim site of typosquatting will be a frequently visited website. The typosquatter's URL will be similar to the victim site address: Once in the typosquatter's site, the user may also be tricked into thinking that they are in fact in the real site; through the use of copied or similar logos, website layouts or content. Sometimes competitors of the victim site will do this.
Have you ever experience this. Say you have some sticky key. Now it causes you to key into your navigation bar typo errors for example. Instead of spelling blogspot it becomes logspot or in rush we mis-spell it as blogsport. Then you say to yourself why another site appear. Upon checking you discover a spelling error in your navigation bar. Well, that was done by design, read below. (bloggers note)
Alternatively, the user will be forwarded to a site of a completely different nature to what they intended. This tactic was infamously used by John Zuccarini, who redirected domains targeting children to pornographic websites. Sometimes, the typosquatters will use the false addresses to distribute viruses, adware , spyware or other malware. Some are also shock sites. More common are benign domain parking sites, selling advertising to firms based on keywords similar to the misspelled word in the domain.
As with cybersquatting in the past, the term typosquatting has been used by covetous parties in an effort to unseat domain registrants from brandable variants of generic domain names The shortage of poignant and generic domain names in the coveted .com generic top-level domain has left many hopeful registrants with no alternative but to locate catchy variants of existing generic words e.g. Orbitz.com (popular travel site with "z" to replace the "s") in an effort to find "new land" on which to build their website.As in the preceding example the line between typosquatting and registering a brandable variant of a generic domain name blurs dependent on the circumstance of each situation.
A company may try and preempt typosquatting by obtaining a number of websites with common misspellings and redirect them to the main, correctly spelled website. For example www.gooogle.com, www.goolge.com, www.gogle.com www.gewgle.com, and others, all redirect to www.google.com. In another example, actor and politician Arnold Schwarzenegger is reported to control the domains with the ten most common misspellings of his surname.
"Typosquatting" is a meaningless term where the law is concerned. Laws generally are not concerned about registrations of domain names that are similar to other domain names or similar to existing trademarks, unless some other important factor is involved.