MarkMonitor sees future in Web security services

By Lora Volkert

IDAHO BUSINESS REVIEW

Software firm MarkMonitor, which has sizeable operations in Boise, plans to spin off Dacuro Technologies, a sister company that offers patent management technology.

MarkMonitor plans to refocus on its business security software that can be used to police trademark infringement, said Faisal Shah, founder and chairman of MarkMonitor.

The San Francisco-based company, which employs 70 at its operations center in Boise, has grown rapidly as it expanded into domain name management and anti-phishing software for protecting companies’ websites and brands.

Dacuro, whose software facilitates filing of patents, is planned to be launched Nov. 1, said Shah, who will head the spin-off but remain involved in MarkMonitor.

Dacuro’s software originally was developed by a Seattle firm called First to File and is still sold under that name. MarkMonitor purchased its assets in 2002 and will keep a stake in the ownership of Dacuro when it spins off, Shah said.

“We initially thought it was similar to what we were doing,” he said. “Initially we thought intellectual property’s all the same,” he said. But Dacuro didn’t fit with the image MarkMonitor is trying to cultivate as “more of a security company,” he said.

Dacuro, which will employ eight in Boise, already has a handful of large pharmaceutical companies as clients, according to Shah. The company may also seek customers among major technology companies.

The technology automates invention-disclosure forms, which attorneys use to file patents. Shah said Dacuro is working to keep its software compatible with the U.S. Patent and Trademark Office so that, when it begins accepting electronic patent applications – hopefully within a year – First to File can be used to e-file.

Other features allow attorneys to track filing dates and alert them to upcoming deadlines. If the patent office says a patent application may not be valid, companies have a deadline to respond to make their case. And though U.S. law does not allow patents to be renewed, some countries do allow it, so a company may have to track the expiration dates of its patents in multiple countries.

MarkMonitor’s new Web domain management and phishing-attack-detection services have proved to be a boon to the 8-year-old firm, which is headquartered in San Francisco. Revenue has doubled every year for the past several years and is on track to do so again, Shah said.

Since 2001, the company has grown from 30 employees to 120 and has offices in Boise, London, San Francisco and Washington, D.C. The Boise office is housed in Emerald Tech Center, off Emerald Street east of Five Mile Road.

In 2003, MarkMonitor acquired Alldomains, a San Francisco domain name registration firm that was doing similar things to MarkMonitor.

Large corporations may have several thousand domain names, which are used to register Web pages. MarkMonitor software automatically renews domain names for clients if the names are set to expire soon, and has functions for registering and transferring domain names.

That thwarts “cybersquatters” who buy up websites and redirect them to porn sites, competitors’ sites, or chat rooms or blogs dedicated to bashing companies – often with the intent of extorting money from companies that want to purchase the Web domains.

Many of the company’s clients have Web domains registered in other countries, so MarkMonitor has a number of bilingual employees who can handle the arrangements for clients. The company’s employees speak about 30 languages, Shah said. The company has benefited from Boise’s LDS population, he said; Mormon missionaries go off to foreign countries, learn the language, come back to Boise “and they still want to know it,” he said.

Since 2001, when the company got into the field, MarkMonitor has become one of the top domain name registrars in the U.S., according to Shah.

Anti-phishing services have become a major component of MarkMonitor’s business since it started offering them in 2003.

Phishing is a term used for the practice of sending fraudulent emails usually purporting to be from banks or other financial entities like PayPal. The emails usually claim that the recipient’s account will be closed unless they go to a Web link provided in the email and enter financial information or passwords. They often use the logos of the companies they purport to be from.

The phenomenon has been growing fast. According to the Anti-Phishing Working Group – a consortium of banks, Internet service providers, technology vendors and law enforcement branches – more than 14,000 phishing attacks were reported in July, the most recent month for which data were available.

ISPs feed their email traffic through MarkMonitor’s system, which scans millions of emails a day for characteristics that indicate they may be phishing attacks. When the software finds fraudulent email, MarkMonitor’s clients can notify their customers and federal authorities, and contact the ISP to have them shut down the account of the person who’s been sending the attacks.

The anti-phishing software works similarly to MarkMonitor’s original product, developed by co-founder James Hepworth, which sifts through Web content for sites that may be infringing clients’ trademarks. The company is a leader in that field, Shah said.

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