Brand Owners Beware of Domain Name Solicitation Fraud

Takeaway: Educate employees to identify fraudulent domain name solicitors and when in doubt, to contact their legal counsel prior to responding.

In the rise of email scams, trademark owners are receiving false claims that their domain name rights are in jeopardy.

Some of these false claims would result in cybersquatting, which is registering confusingly similar domain names to profit from the goodwill of a brand. Other claims may result in trademark pirating, which is applying for trademarks of well-known brands to profit from the goodwill of those brands.

Fraudulent domain name solicitors conduct their scams by targeting brand owners into thinking that important domain names are in jeopardy of being registered by cybersquatters or competitors, and by claiming they are from an official government agency or some certified registrar, especially one from a different country.

For example:
“Dear Sir or Madam,
We are an agency for registering domain names authorized by Chinese government. Today, our center received an application from [COMPANY XYZ] applying to register [“YOURMARK”] as their brand name and some top-level domain names (.cn .hk, etc). After our careful investigation, we found the main body of domain names is the same as yours. As a professional registrar, we are obligated to inform you of this situation. We are handling the application and we need to confirm whether or not you authorize them to register them. Let me know your answer ASAP so as to resolve this promptly.”

Fraudulent domain name solicitors create a sense of urgency by suggesting that the window of opportunity to protect the mark is closing, causing some brand owners to overzealously respond to protect their mark without consulting legal counsel.  In the best case scenario, the brand owner would only be required to pay a fee to deny the request for (fake) registration. In other cases, the brand owner would be offered to have the solicitor buy the domain name for the brand owner, but of course would never do so.  The worst case scenario would be that the solicitor would be party to cypersquatting or trademark piracy—registering domains that the brand owner was interested in protecting.

The solution is to educate employees to identify such suspicious emails and when in doubt, to contact their legal counsel before responding.  Even if the domain names listed out in the emails are of interest to the brand owners, the brand owners should register such domain names using a normal and vetted domain name registrar.