Chinese Scam Preys on Cybersquatting Fears

In a recent post, we talked about cybersquatters who shanghai trademarks by registering Internet domain names that are identical or very similar to trademarked names. The intent may be to extort ransom from the trademark owner, fraudulently divert traffic from the trademarked domain, or harm the trademark owner by promoting competing or knockoff products, pornography or negative content. The Anti-Cybersquatting Consumer Protection Act (ACPA) is designed to combat this practice. By all accounts, cybersquatting is rampant in Asia. And now, it appears, a helpful Chinese domain name registrar is attempting to protect trademark holders against cybersquatting in China. The email goes like this (we simply substituted the word “trademark” for the actual domain name identified in the email):

(Please forward this to your CEO, because this is urgent. Thanks) We are a Network Service Company which is the domain name registration center in Shanghai, China. On March 11, 2014, we received an application from Huafei Ltd requested "trademark" as their internet keyword and China (CN) domain names. But after checking it, we find this name conflict with your company name or trademark. In order to deal with this matter better, it's necessary to send email to you and confirm whether this company is your distributor or business partner in China? Kind regards Heather Wang General Manager Shanghai Office (Headquarters) B06, Yujing Building, No.1 Jihe Road, Shanghai 201107, China Tel: +86 21 6191 8696 Mobile: +86 182 2195 1605 Fax: +86 21 6191 8697 Web: www.ygdns.com.cn

Don’t be fooled. The so-called Chinese Domain Scam has been going on for more than a decade, and the goal is not to prevent cybersquatting but to get ahold of some of your hard-earned dollars. By preying on fears of trademark infringement, these scammers are hoping you’ll register your domain with .cn, .com.cn and other such extensions. One victim reportedly received an invoice for $400 for merely communicating with the Chinese registrar. The email seems legitimate enough (although the English is a bit broken) but there is a major problem with it: There is no “application” process for registering a domain name. If someone wants to register an available domain name, they simply do so. If someone else thinks the domain name constitutes cybersquatting, there are legal processes for sorting that out. Don’t be confused into thinking this has something to do with the “Sunrise” period associated with the new generic top-level domains (gTLDs). It doesn’t. An Internet search shows that the wording of the scam email has changed little over the past 10 years. We do suspect the scam may be getting a reboot to take advantage of the confusion surrounding the new gTLDs. If you receive one of these emails, our best advice is to delete it and move on. Unless you do business in Asia, there is no reason to register your domain there. Don’t communicate with the scammer or you may get hit with a bogus invoice. If you do business in Asia, or are considering doing so, it may make sense to register your domain there. If so, select a different registrar to handle the process. Don’t reward a scammer with your business. Cybersquatting can be a real headache for trademark holders, but don’t let scammers prey on your concerns. If you have reason to believe that someone is taking advantage of your trademark in a domain name, need help understanding the new gTLDs, or have other Internet law concerns, please feel free to contact us for a consultation.

Daniel D. Whitehouse, Esq.

March 13, 2014

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