Product trademarks to be allocated top-level domains

Last year the industry self-regulatory body for internet domains that end in '.au', au Domain Administration Limited (auDA), established a panel to review Australian domain name allocation policy. The allocation policy had been the subject of criticism, with suggestions that it limited the ability of legitimate interests to obtain registration.

The panel issued its final report in April 2001, recommending a number of changes to domain name policy. The board of auDA accepted the report on May 8 and intends to implement the recommendations in the second half of this year. The recommendations are as follows:

• There should be no restrictions on the number of domain name licences that may be held by an entity or individual.
  
  
• All domain names should be subject to a renewal period as specified by auDA or the relevant administrator.
  
  
• Domain names beginning with a number should be allowed.
  
  
• Domain names that match top-level domain names should not be allowed.
  
  
• A reserved list of domain names that cannot be registered should be established.
  
  
• An applicant should be able to challenge a name on the reserved list.
  

Domain name licences will continue to be allocated on a first come, first served basis. auDA identified the following requirements for registration:

• The applicant must be Australian.
  
  
• The proposed use of the name must fit the purposes specified for the relevant second-level domain.
  
  
• There must be a declaration of good faith to use the name. Purposes that would be considered to be in bad faith include (i) licensing a domain name for the purpose of selling it or diverting traffic from another's web site, and (ii) deliberately licensing a misspelling of another entity's name to trade on the reputation or goodwill of that entity.
  
  
• The applicant must agree to be bound by any dispute resolution procedure that auDA specifies. The Uniform Dispute Resolution Policy of the Internet Corporation for Assigned Names and Numbers (ICANN) was identified as the preferred procedure.

In addition, there must be a close and substantial connection between the domain name and the licence holder. This will be demonstrated if the domain name (i) exactly matches the name on which the licence application is based (eg, company name or trademark), and (ii) is a name by which the licence holder is widely known or is otherwise substantially and closely derived from the name on which the domain name licence application is based.

This recommendation has given rise to a number of issues. First, registration for the '.com.au' domain is only available if it is based on a company or business name registration. The inclusion of trademarks as a connecting factor broadens the basis on which registration is available, allowing trademarks for products to be registered. This is important as users may not know the name of a business or company, but may be aware of particular products or services. However, the inclusion of trademark registrations as a connecting factor is consistent with the domain name allocation policies for the new ICANN approved '.biz' and '.info' domains.

Second, there is some confusion as to whether 'trademark' covers both registered and unregistered trademarks. This factor needs to be read in connection with the eligibility requirement that the applicant be an 'Australian entity', which includes an applicant for an Australian registered trademark. Therefore, an unregistered trademark may be acceptable under the first connecting factor if it is the subject of an application for registration, but not in other circumstances.

Third, while an unregistered trademark might be sufficient under the second connecting factor, there are some applicable limits. The first limb refers to a name by which the domain name licence holder is widely known. This would cover unregistered trademarks that are abbreviations or acronyms of business or company names, but would not allow unregistered trademarks for products or services unless they are also abbreviations or acronyms of business or company names. The second limb is highly subjective. It provides that a sufficient connection will exist if the domain name is otherwise substantially and closely derived from the name on which the domain name licence application is based. Again, this allows for reference to business and company names, but it is doubtful whether the requirement would allow unregistered trademarks for products or services.

A minority of the auDA panel that prepared the report did not support the inclusion of trademark applications as a basis for domain name registrations. The minority considered that the inclusion of trademark applications would lead to problems, including (i) an increase in the number of people who register names in bad faith, and (ii) possible pressure placed on small businesses and individuals who do not have a registered business identifier to apply for trademark registrations to protect their domain names.

The proposed changes to domain name allocation policy are intended to improve the access of users to domain names to which they are legitimately entitled. It will be interesting to see whether this objective is achieved.

Caterina Cosentino, Blake Dawson Waldron, Sydney