Domain name drop catching services like Pool.com and SnapNames.com take orders from customers for really any expired domain name they can obtain. So this brings up a pretty interesting situation because the drop catching service becomes "the owner" of the domain name for at least a short period of time IMO during PendingDelete drop catching.

Even if the domain name only has 1 backorder, a registrar likely owned by or affiliated with the drop catcher is going to become the owner of the domain name until payment and transfer of ownership takes place to the person who placed the order. The same thing would happen if more than 1 backorder is placed and a 3 day auction takes place.

So what if "the buyer" backorders a trademark infringing domain?

Technically, the drop catching service in some way becomes the "owner" of the trademarked domain. Example?

DisneyLan.com a pretty clear typo of DisneyLand.com IMO and both Disney® and Disneyland® are trademarks of Disney Enterprises Inc.

Here is a screen shot from DailyChanges.com displaying some domain names that Pool.com grabbed on the PendingDelete drop:

You will notice DisneyLan.com in the group of domain names. Here is a screen shot of DomainTools.com Whois.. which somewhat hides the fact that an affiliated Pool.com registrar obtained the domain because no registrant data is provided…. but the DNS is pretty clear of where the domain went.

MegaByte.ca is owned by Momentous.ca, which owns Pool.com. So what is displayed on the actual domain name "during the auction" or "transfer of ownership" of the domain name DisneyLan.com after Pool.com grabbed it?

A parking page with a bunch of Disney related links of coarse!

Not only is Pool.com and or affiliated registrars potentially profiting from the sale of the confusingly similar domain name DisneyLan.com, they are also displaying text advertising on a domain name parking page of a registered trademark (Disney) and potentially profiting from those text link ads.

I would think the DNS is a default setting no matter what domain name they grab during a PendingDelete drop catch but I could see domain names like this dragging a drop catching service and or the affiliated registrar used into a legal battle if it hasn’t happened already.

A couple things that are a bit shady by the drop catching services if the domain is clearly trademarked:

A.) Allowing and Accepting the backorder

B.) Grabbing and Selling

C.) Parking it

This is very similar to domain name registrars that use default "parking" pages when a customer registers a domain name. Not only are they profiting from the registration, but have the potential to profit if the DNS are not changed by the customer and ads related to the TM are displayed.

This is something very hard for registrars and drop catching services to police but something else to consider is the lack of any effort to prevent it to the mass general public. Ever try to search a domain name that includes the term "godaddy" at GoDaddy.com? It prevents you from doing it and displays a message "Please Select A Different Domain Name To Search On"! Something similar could be set up for trademark holders and drop catching services also could implement it.