"Cybersquatters" - those who try to beat a company to the draw by registering prominent Internet addresses in hopes of selling them later at a profit - will have free rein to continue their practices in the wake of a decision on Monday by a federal appeals court in California.

In a case closely watched by the Internet industry and trademark lawyers, the 9th circuit US Court of Appeals ruled that a company which registers domain names, or Internet addresses, cannot be sued for allowing a cybersquatter to register a name, even if it infringes another company's trademark.

Corporations which believe their trademark rights have been violated can still sue the squatter. But they cannot sue the company that registers the name, nor can they force domain name registrars to police their customers for trademark violations.

In practice, this will mean that squatters can continue registering names - even those which potentially violate trademarks - unless companies take lengthy and costly legal proceedings to stop them.