Chinese Domain Name and Trademark Scam

Chinese domain name and trademark scam are email scams coming from highly urbanised cities and municipalities in China such as Shenzhen and Shanghai.

Scammers, purporting to be from authorised local units of a Chinese Registrar Agency, attempt to convince big foreign companies and small business owners that they are in danger of losing their domain name or brand name (trademark) in China.

These urgent looking emails are designed to cause panic among foreign companies and small businesses. The purpose of the scam is to scare their victims and then offer their services. In reality, the scammers only take their victim’s money and then disappear without a trace.

Unfortunately, these scams are thriving because the fear of losing their intellectual property is making uninformed owners of domain names and trademarks leap on the offer.

This blog aims to promote awareness against the Chinese domain name and trademark scam.

Everything You Need to Know About Chinese Domain Name and Trademark Scam

A Brief History of Domain Name Scam

1983 – Paul Mockapetris, an American computer scientist and internet pioneer, created the Domain Name System or DNS.

1985 – Kevin Dunlap, who worked for the Digital Equipment Corporation or DEC, made major revisions to the implementation of the DNS. Top-level domain (TLD) name extensions were introduced. Some common TLD extensions are .org, .net, and .com.

1995 – To control the rapid increase of domain names in the online marketplace, the National Science Foundation (NSF) allowed a tech consulting company to charge applicants a registration fee of US$100.

2001 – An aggressive marketing tactic known as Domain Slamming surfaced on the web. Shady internet service providers (ISPs) sent fake invoices to subscribers from other ISPs. These unsuspecting domain name owners had no idea that they were being transferred to another provider when they paid the invoice.

2005 – The first batch of domain name scams was spotted on the internet. Chinese scammers were asking foreign businesses to “protect their brand” by registering for Chinese/Asian domains.

2013 – Domain name scams became rampant when the Chinese government announced that “proof of identification” was no longer needed when registering Chinese domains.

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Who are the targets of Chinese domain name and trademark scams?

Since 2005, big companies and small business owners around the world have been receiving domain name scam emails from individuals working for a registrar service in China.

To be specific, domain name and trademark owners are the targets of many Intellectual Property scams.

Types of Domain Name scams

The Duplicate Domain Name

Also known as “threat from third-party scam”, an owner of a domain name receives an email notifying him that another company wants to register his domain name in the Asian realm.

More specifically, a Chinese company intends to use his domain name as an “internet keyword” and register it using Asian domain extensions such as:

domainname.cn, domainname.com.cnx, domainname.org.cn, domainname.asia, domainname.tw, domainname.hk, domainname.kr, domainname.jp

The domain name owner is given a 7-day window to respond or else the “third party” will proceed with the domain name registration. If the domain name owner responds, the scammer sends an application form or quote.

The Domain Name Registration Expiration

A scammer sends an urgent looking email with a fake invoice that appears to be an official document to an unsuspecting domain name owner. Scammers will send fake registration expiration invoices much earlier than the actual expiration date.

Typical Trademark Scam Scenarios

  • A business owner receives a fake invoice from a Chinese scammer. Looking like an official invoice these counterfeits are effective in eliciting payment from unsuspecting owners.
  • A scammer posing as an independent broker offers to help business owners who have lost their trademark rights in China. For a fee the scammer promises to bring the trademark back. It is possible the scammer had orchestrated the filing of a fraudulent trademark application to facilitate the scam.
  • The trademark owner receives an email informing him that another company is trying to register his trademark in China. The trademark owner is given a 7-day response period where he can act to save his brand. If the trademark owner decides to reply, the scammer then sends a fake application form or quote.
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How do Chinese domain name and trademark scams work?

The most common tactics you might see in a trademark or domain name email scam fall under the following:

  • The scammer informs the victim that a Chinese company intends to register his brand with an Asian domain name
  • Posing as a Chinese registrar representative, the scammer asks for the victim’s “permission” so the fictitious Chinese company can register the victim’s brand with Asian/Chinese domain name extensions as “an act of courtesy”.
  • The scammer convinces the victim of the privilege of registering his brand before anyone else.
  • A scammer might play good cop/bad cop with his victims by sending his scam from more than one email account
  • In the first email, he poses as a representative from a registrar and offers to help the victim.
  • His next step is to send an email posing as the representative from the fake company. He informs the victim that the Chinese company will proceed in registering the victim’s brand within the Asian realm.
  • In the third email, the scammer tells the victim that he tried to persuade the fake Chinese company not to use his brand’s name.
  • Finally, he tells the victim that the Chinese company is persistent, and the only way to prevent this from happening is for the victim to send money so his brand can be registered in China.
  • Domain name registration in China can take place without the presence or consent of a brand owner. A third-party email account will be used for the registration but the actual brand owner will have no direct access to the domains.
  • The offer is ridiculously high or too good to be true, or the only registration periods offered are 5 to 10 years.
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How to spot a Chinese domain name and trademark scam email?

Chinese scam emails are all the same. They follow the same pattern regardless of the source. Below are things to watch out for in a Chinese scam email.

Broken English

Scam emails from China contain broken English. Using a translation service, scammers may not have the ability to check grammar, so some sentences won’t make sense as you read them. Scammers do not spend time researching their potential victim.

The Notion of Urgency

Scam emails are designed to cause panic among domain and trademark owners. Scammers usually give only seven days for domain and trademark owners to reply and act. These emails press the victims to react, without thinking, to protect their intellectual property.

Unsolicited Approach

Scam emails from China will be unsolicited and usually unexpected. A legitimate entity, such as the CTMO or the China Trademark Office, would never disclose any information about their clients to a third party. It is unethical for a legitimate entity to disclose any information about their clients, such as trademark applications and domain name registrations.

Hence, an email from a Chinese IP registrar informing a brand owner there is a danger of losing his trademark because a Chinese company has registered the same brand name should be considered a scam.

Vague Name

All over China, the CTMO is the sole government agency that receives trademark registrations. Likewise, the SIPO or State Intellectual Property Office is the only agency in charge of patent examination. There are no other agencies, local units, or sub-offices authorised by the Chinese government to receive domain name and trademark registrations nationwide.

For this reason, scammers won’t claim that they are from the CTMO directly. They might claim that to be from a local unit of the CTMO or a sub-office authorised by the CTMO. Otherwise they will use vague agency or company names.

Some samples of vague company names used in scam emails

  • The Department of Registration Service In China
  • Asian Domain Registration Service in China
  • China Domain Name Registration Centre

Popular phrases used in the scam email subject line

  • “Notice of Brand name registration”
  • “Asia, Cn, HK domain name and Internet Keyword”
  • “Domain dispute and protection”
  • “urgent brand registration confirmation”

The following is a copy of a circulating Chinese domain name and trademark scam email.

“Dear Manager,
(If you are not the person who is in charge of this, please forward this to your CEO,Thanks)
This email is from China domain name registration center, which mainly deal with the domain name registration in China. We received an application from BaoYuan Ltd on December 17, 2012. They want to register ” squelchdesign ” as their internet keyword and China/Asia (CN/ASIA) domain names. But after checking it, we find this name conflicts with your company. In order to deal with this matter better, so we send you email and confirm whether this company is your distributor or business partner in China or not?
Best Regards
John
General Manager
Shanghai Office (Head Office)
3002, Nanhai Building, No. 854 Nandan Road,
Xuhui District, Shanghai 200070, China
Tel: +86 216191 8696
Mobile: +86 1870199 4951
Fax: +86 216191 8697
Web: www.ygnetworkit.com”

What should Australian companies and SMEs do to protect themselves when doing business with and in China?

The best remedy is a precaution. China’s unique business and social structure have a significant effect on its IP system. Before entering Chinese markets, do these three things.

  1. Do an IP audit on your business.
  2. Familiarise yourself with how to protect your IP rights.
  3. Seek legal advice from reputable law firms specialising IP law in China.
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FAQs on Chinese Domain Name and Trademark Scams

  1. How do Chinese Domain Name and Trademark scammers get my information?

When you apply for a trademark with the IP Australia, the United States Trademark Office (USPTO) or any IP office in your country, you are required to provide your physical business address and other information.

Unfortunately, all the information provided by the applicants are available for the public to view at any time. Hence, a simple search on the IP website will reveal the mailing address of registered owners and pending trademark applicants.

Likewise, if scammers want to know the information of a domain name such as the owner’s identity, they simply search the Whois.com or ICANN Lookup database.

  1. What to do when you receive Chinese scam emails?

If you don’t have a business in China, just ignore or delete the email immediately. The scammer wants you to register Asian and Chinese domain name extensions that your business or website doesn’t need. According to MOZ, a Seattle based marketing analytics software company, having unnecessary domain extensions can hurt your website’s SEO.

If you do have a business with and/or in China, you must seek expert legal advice. Look for law firms that can work with Chinese associates to protect your IP rights in China.

  1. What will happen if I reply to these domain name and trademark scam emails?

If you reply to a Chinese scam email, expect to get a response email from the scammer containing the application form with the price list or quote.

If you decide not to return the application form and not proceed with the registration, you will get phone calls and a series of emails from the scammer pressuring you to act.

To avoid the hassles brought by these scam emails, it is wise not to reply to them in the first place.

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Final Thoughts

To this day, the number of victims of the Chinese domain name and trademark scam continues to grow. This blog should be a wake-up call to all companies and SMEs, to think about protecting their intellectual property, especially in countries like China.

If you don’t have a business in China, just ignore the scam emails. You will not lose your brand name to a Chinese company. The new amendment by the Chinese government will dismiss all “bad faith” trademark applications from scammers.

In conclusion, if you have a business with and in China, don’t respond to scam emails and instead seek expert help from a law firm that specialises in Intellectual Property Protection.

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