Domain Name Offer: Helpful Service, or Marketing Scam?

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Last week I blogged about a common deceptive technique used by some publishers around the world that send apparently official invoices to trademark applicants in the hopes that people will reflexively pay outrageous sums for a listing of their brand in a catalog few will read.

I wanted to follow up on that post and summarize another common scam that befalls trademark owners and applicants.  I get an inquiry from a client at least 2-3 times per month:

“Is This Domain Name Email Legitimate?”

The ruse works likes this: Trademark owner applies for a trademark in the U.S. or with another office in another country.  Information about the mark and the owner is publicly available to scammers through simple searches.  The scammer sends an email to the trademark owner purporting to warn the mark owner of the ill behavior of a potential domain name squatter.  Below is an actual email received recently by a client.  I have changed the names in the email to avoid any embarrassment of the recipient, but I otherwise have left the text, including the grammatical errors of the original, intact.

Dear CEO/Principal,

We are the department of [Domain Name] Service in China. Here I have something to confirm with you. We formally received an application on May 13, 2013 that a company claimed “ACME PLANETARY DOMAINS” were applying to register “YOUR MARK” as their Net Brand and some “YOUR MARK” Asian countries top-level domain names through our firm.

Now we are handling this registration, and after our initial checking, we found the name were similar to your company’s, so we need to check with you whether your company has authorized that company to register these names. If you authorized this, we would finish the registration at once. If you did not authorize, please let us know within 7 workdays, so that we could handle this issue better. After the deadline we will unconditionally finish the registration for “ACME PLANETARY DOMAINS” Looking forward to your prompt reply.

Best Regards,

Often the inquiry comes with a list of vulnerable domains the purported squatter is seeking, for example:  , , etc.

Invariably, of course, the trademark owner becomes understandably concerned, if not outraged, that a third party is apparently trying to steal its trademarks and register conflicting domain names.  However, the email is nothing other than a marketing ploy.  If you respond to this email insisting that you have not authorized the bogus domain name registrations, you will be told that unless YOU register the domain names through the service provider, the bogus registrations will proceed. Hence the email is intended merely to get the recipient to panic and register the domains through the emailer’s services.

What’s the Deal?  Do I Need to Register These Domains?

In reality, there may be good reasons to acquire the domains the scamming provider mentions in his/her email.  In particular, if the domains in question are really valuable to you or your business, because, for example, they might attract customers in a geographic region you are entering, then pursuing registration might be worthwhile.  But we would recommend contacting counsel or a reliable registrar and acquiring them separately from the purported service provider who wrote the above email.  By and large, that service provider is just looking to make a quick buck by convincing rights holders that their rights are in jeopardy—and often the domains can be acquired less expensively from another service provider.

Whether to acquire domains beyond the standard generics (.com, .info, .net, etc.) really involves a number of considerations, including:

  • the geographic scope of your marketing efforts and sales channels;
  • the geographic scope of your trademark registrations;
  • the nature of your products and the channels of trade and advertising you use; and
  • your budget.

The budget issue is more significant than it may first seem.  While domain name registrations are not expensive, if a company tries to obtain registrations covering all of its marks and each iteration or misspelling of each mark under each top level domain, the cost and administrative burden would quickly become overwhelming.

Furthermore, the rules around how to challenge squatters vary by registrar, and sometimes have little to do with trademark rights per se.  So if there are regions of the world that are or will become important, or certain other generic top level domains that may be more resonant with your business, exploring defensive and proactive registrations to ward off squatters will be wise.  But those proactive steps need not include reflexively responding to the scamming email above.

The bottom line is that a strategic approach to domain name acquisition will be deliberate and take into account a variety of factors relating to your business and future goals.  It’s rare that simply acquiring the supposedly vulnerable domain names offered in the scamming email above is the best answer.