Celebrity domain names are almost always in the news. That's because people tend to register domain names of famous people, politicians and celebrities in order to make money off of someone else's fame. Celebrity cybersquatting has been around since domain names first became available to register.
Oftentimes, fans will register a celebrity domain name in order to put up a "fan site." As a domain name attorney, i advise people all the time how to properly create a fan site using a celebrity name as part of the domain name. Well the details important, fans are generally able to put up a fan site using a celebrity domain name as long as they follow a few simple rules. The first and most important rule is that you can not make money off of the celebrities name or fame. That means you cannot try and sell the domain name for a higher price then you paid for it (typically the registration fee). This means you cant put ads up on the site through google ad sense or otherwise. It means you cant link to anything that could potentially make you money It is also less risky to include a word in the domain name which tells people it is a fan site and neither endorsed, operated or sponsored by the celebrity themselves.
Unfortunately, most celebrities cybersquatting is just that. People register famous names in order to take money off of someone else's good fortune and goodwill. The Anti Cybersquatting Consumer Protection Act (ACCPA) protects personal names from domain registration and monetizing by third parties. Penalties can be pretty stiff. If you register a famous persons name as a domain name in order to profit, nd so in bad faith, you could be liable for up to $100,000 in statutory damages plus attorneys fees per domain name. The Uniform Domain Dispute Resolution Policy (UDRP) also protects personal names and celebrity names from registration with a bad faith intent to profit. Consult with a domain name attorney for more information.