According to articles in the Washington Post and PC World today, Microsoft has filed a lawsuit against domain registrar Red Register for registering 125 names with Microsoft trademarks. Although the domain names are currently registered to another company in Tortola, Microsoft believes the current information is false (according the article).

This marks the second registrar in recent history to have a lawsuit filed against it for cybersquatting. A couple of months ago, Yahoo and Dell both filed lawsuits against domain registrar Belgium Domains for registering domain names infringing on their brands. While both of these instances accuse the registrar of owning the infringing domain names, it is scary to think that this could potentially happen to a more mainstream registrar who controls millions of domain names and happens to have some trademark names among them. An article on DomainNameNews.com prints an email showing that many domain names at Belgium Domains are currently locked by the registry.

Trademark holders have become more aggressive in defending their marks in the past several months, not simply going after the domain owners as they did in the past. Back in June, Vulcan Golf sued Google for helping domain owners monetize domain names that they believe infringed upon their trademark. Domain owners need to use caution and common sense when registering domain names.

In the investment world, once a story hits the press, the price of the affected company’s stock is impacted almost immediately. In the domain industry, news travels less quickly, and because of that, you could possibly get a jump on news before price increases are made. Timing is everything.

One way to get a jump on the news is to review the list of domain names that are scheduled to be auctioned in an upcoming live auction. Do your best to determine the value for each live auction domain name based on the venue, comps, current market value…etc, and compare your calculations to the reserve prices. Should your valuation be significantly higher than the reserve price, there may be a strong chance the domain name will sell at auction.

When a domain name sells at auction for a significant price, the demand for similar names may increase as a result. In the week or so before the auction, if you are confident that a particular name is going to make a big splash in the auction, attempt to acquire similar domain names using Whois searches or via domain marketplace. If you don’t have the opportunity to do this quickly enough, you can do the same thing immediately after the auction. I recommend this strategy if you have a strong feel for the domain market and are willing to take a financial risk.

Of course, the caveat is that not all domain names are similar, even if they look the same. You need to know the market well enough to feel comfortable going out on these types of limbs. Also, the demand for similar names may be short lived, so this is a short term strategy.