Domain name theft presents a distinct problem from cybersquatting. Cybersquatting is the registration or use of your trademarks and service marks by third-party registrants of infringing domains. Domain name theft occurs when you lose control of your domain registration and domain registrant status.
Domain theft typically occurs as a result of a company’s failure to lock down or control the registrant log in information at the registrar level. Domain names are stolen in a variety of ways but typically occur when an employee, partner or web developer take control of the registrant log in information. Each is discussed briefly below.
Domain name theft by a partner or co-owner:
We receive calls every week from trademark holders who essentially tell us that an ex-partner or company owner has taken control of their domain registrations as a result of a falling out. Perhaps the domain name was registered initially in one partner’s name. When a falling out occurs, that former business owner refuses to release the domain. In some cases, that business owner redirects the domain to another website, essentially putting the online business out of business. More often, the business owner demands some sort or money or other consideration in exchange for the domain name. Essentially, they use the domain as leverage to obtain something they couldn’t achieve in the context of the partnership.
Domain Theft by Employees:
This is perhaps the most common example of stolen domain names. Unfortunately, corporate management is rarely involved in the registration process of their domain names. Registration of domains is often handled by the IT department, and even delegated to lower level web site employees. Because of the high turnover rate at that level, the employee with access to the domain registrant login information ends up leaving the company, taking that information with them. Again, if there is a dispute with the employee, it often turns into a domain name dispute after termination.
That technology vendor uses their own information to register the domain name, even going so far as to list their company as the registrant of your trademarks. If a billing dispute arises down the line, the web developer uses the domain name as leverage to get paid. Even more common, the web vendor goes out of business and the company doesn’t realize that they have no way of obtaining control of the domain name or even renewing the domain name at the end of the registration period.
For more information on protecting your domain names from theft, see this post here.