The Chinese domain name scam

Help with the Chinese domain name scam for small to medium-sized American businesses is available from stopfakes.gov. “The U.S. Department of Commerce, in cooperation with the American Bar Association, the National Association of Manufacturers, and the American Chamber of Commerce in China, have established a new China Intellectual Property Rights Advisory Program. Through this program, American small and medium-sized enterprises (SMEs) can request a free, one-hour consultation with a volunteer attorney experienced in both IPR issues and the Chinese market to learn how to protect and enforce intellectual property rights (IPR), such as trademarks, patents or copyrights, in China.”

Although Virtual Silk® does not do business in China, in August 2008 we thought (!) we were forced to register this domain name, as well as www.virtualsilk.com.cn by Henry of Merit Technology Development Ltd. for an investment company in China called “Snow”. (We now find the name Snow rather humorous.)

After the second email from Brian in October 2008 for a company named “QianKun Investment Limited”, we got smart and did some googling of domain name scams from China. Wow! There are many forums and blogs about this fraud.

We have done our homework and found the legal international agreements. (We are not lawyers and this is not legal advice. We suggest you read the links to the agreements yourself.)

The World Intellectual Property Organization (signed by China as part of the Madrid Agreement) Domain Name Dispute Resolution explains:

What is the nature of domain name disputes?: Domain name disputes arise largely from the practice of cybersquatting, which involves the pre-emptive registration of trademarks by third parties as domain names. Cybersquatters exploit the first-come, first-served nature of the domain name registration system to register names of trademarks, famous people or businesses with which they have no connection.; Since registration of domain names is relatively simple, cybersquatters can register numerous examples of such names as domain names. As the holders of these registrations, cybersquatters often then put the domain names up for auction, or offer them for sale directly to the company or person involved, at prices far beyond the cost of registration. Alternatively, they can keep the registration and use the name of the person or business associated with that domain name to attract business for their own sites.; Domain name disputes in the seven new gTLDs (generic Top Level Domain such as .info) are also subject to the Uniform Domain Name Dispute Resolution Policy (UDRP).

What is the UDRP?: The UDRP is the Uniform Domain Name Dispute Resolution Policy, adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on August 26, 1999. The UDRP is based on recommendations made by WIPO in the Report on the First WIPO Internet Domain Name Process, focusing on the problems caused by the conflict between trademarks and domain names. A number of further issues identified in that Report that were considered to be outside the scope of the First WIPO Process have been addressed in the subsequent Report of the Second WIPO Internet Domain Name Process.

How does the UDRP work?: In the event that a trademark holder considers that a domain name registration infringes on its trademark, it may initiate a proceeding under the Uniform Domain Name Dispute Resolution Policy (UDRP). Under the standard dispute clause of the Terms and Conditions for the registration of a gTLD domain name, the registrant must submit to such proceedings.

Virtual Silk® is located on the Monterey Peninsula, California and specializes in web site design and development, e-commerce, PHP and the use of cascading stylesheets (CSS) to enable accessibility.