The new '.au' domain licensing rules – what has changed?

7 minute read  21.04.2021 Belinda Alcock, Lachlan McNamara

Following recent changes to the '.au' domain licensing rules, businesses that hold or use .com.au and .net.au should review their compliance, to avoid the risk of cancellation.

 


Key takeouts


Foreign entities that hold a .com.au or .net.au domain name should confirm their eligibility to hold the domain name under the New Rules. To be eligible, the foreign entity must be the owner of a registered or pending Australian trade mark that is an exact match with the domain name. To avoid cancellation, it may be necessary to seek registration of a new Australian trade mark (i.e. an exact match to the domain name) or transfer the domain name to a Australian-based entity in your corporate group that does meet the eligibility requirements.

 

Under the New Rules, the owner of a .com.au or .net.au domain name is prohibited from licensing, renting or leasing their domain name to a third party (other than a Related Body Corporate). If you are currently licensing a .com.au or .net.au to a third party, or using a .com.au or .net.au domain name under licence – there is a risk of cancellation. You should assess this risk and consider if the purchase or transfer of the domain name (and any underlying trade mark or business name on which it is based) is appropriate.

 

If you have any concerns about how a third party is currently using a .com.au or .net.au domain name, you should consider if there is an opportunity to seek cancellation of the domain name under the New Rules. To this end, the New Rules include a new, more boisterous complaints process for seeking deregistration of a domain name due to ineligibility. This may provide a more efficient and cost-effective alternative to bringing proceedings via the World Intellectual Property Organisation (WIPO).

 

The organisation responsible for the development and administration of the .au domain names, .au Domain Administration Ltd (auDa) has made notable changes to the rules which govern .au domains. Effective from 12 April 2021, the new licensing rules (New Rules) have tightened the eligibility criteria for the popular .com.au and net.au domain names and prohibited holders of .com.au and .net.au from licensing, renting or leasing these domain names to third parties. These changes apply to all existing domain names in the '.au' space – not just domain names registered after the commencement of the New Rules.

Eligibility for .com.au and .net.au – Australian and foreign traders

The New Rules have slightly changed the eligibility criteria for who may hold a .com.au or .net.au domain. The position now is:

For an Australian registered entity (i.e. an entity that is a registered Australian company or holds an ABN in Australia) – they are eligible for any .com.au or .net.au domain name that is:

  •  a match to an Australian trade mark, company name, or business name (that is either held by them directly, or an Australian-based related body corporate); or
  •  a synonym to any service/good/event/activity/premises that they deal with. The 'synonym' eligibility criteria replaces the former 'close/substantial connection' test, and should now provide greater certainty given the objective nature of synonyms.

A match is defined under the New Rules to mean a domain name that is identical to one, some or all of the words or numbers used in the applicant's legal name, business name or Australian Trade Mark. While words or numbers may be omitted, they must be in the same order and must not include any additional words or numbers. This definition of match, and allowance of synonyms to describe goods and services, has replaced the previous 'substantial connection' rule, which permitted applicants to register a domain name which bore a 'substantial connection' to their legal name, business name or Trade Mark.

Scenario A

An Australian registered company 'Orange Tree Frog Pty Ltd' sells various pets and other creatures. It could register a domain that is a 'match' of the company name, such as 'orangetreefrog.com.au' or 'orangefrog.com.au' or a synonym of the goods and services it offers 'australianpetsales.com.au'.

Eligibility for a foreign entity

For a foreign entity – they are eligible for any .com.au or .net.au domain name that is an exact match to the words of any Australian trade mark registration or application in their name.

An exact match means the domain name must be identical to the trade mark and include all words in the order they appear in the trade mark, excluding DNS identifiers and trivial changes such as 'the' or 'a'.

Scenario B

A foreign entity, USA Frogs LLC, holds the registered Australian trade mark 'ORANGE FROG' (word mark). USA Frogs would only be eligible to register a domain for 'orangefrog.com.au'. Under the New Rules, USA Frogs is ineligible to hold any derivation or modification of the trade mark, including:

  • a misspelling such as 'orangetreefrog.com.au';
  • adding an additional word, whether inside the trade mark or after, such as 'orangefrogfactory.com.au' or 'orangehouseholdfrog.com.au' or;
  • using a synonym, such as 'orangetoad.net.au'.

Scenario C

Similarly, if USA Frogs LLC holds a logo mark with a tagline e.g. 'orange frog, the home of amphibians', then the only potential domain that could be registered would be 'orangefrogthehomeofamphibians.com.au'.

In each of the above scenarios, if the foreign entity seeks to rely on an Australian Trade Mark for their domain name eligibility, the New Rules requiring an 'exact match' minimises the range of available domain names.

Given the above, foreign entities in particular should review their current domain name registrations and confirm their eligibility for each domain name under the New Rules. Otherwise, there is a risk that the New Rules will be enforced (either by the domain name registrar or an interested third party, such as a competitor) and a business-critical domain name could be deregistered.

The New Rules (and accompanying new Registrar rules) may see more active enforcement of eligibility requirements in future. There is also the possibility of an interested third party seeking cancellation of a domain name (utilising the new complaints process, discussed in more detail below).

Third party use, licensing and ownership

The New Rules prohibit holders of an .au domain from renting, leasing or sub-licensing their domain name. This prohibition also extends to any sub-domains (e.g. where a website is essentially split into sections, such as 'Adelaide.orangefrog.com.au' and 'Sydney.orangefrog.com.au' for different locations, or 'store.orangefrog.com.au' and 'support.orangefrog.com.au' which may cover an online store/customer support services respectively). Sub-domains are commonly used when different services/cities/areas/franchises are operated by different entities, in connection with a common brand.

Renting, leasing and sub-licensing was permitted under the previous rules, and enabled holders to bypass eligibility rules for the .au domain names. By closing this loophole, auDA aims to improve website control and transparency for consumers, by ensuring that the registrant of a domain name is in fact the operator of the website.

Importantly, this change may catch-out some entities who have previously allowed third parties to use their .au domains (e.g. as part of a brand licence or franchise arrangement, or joint collaboration), or organisations with more complex corporate structures. There is an exception provided for the licensing of domain names between related body corporates (as defined under section 50 of the Corporations Act 2001). For example, it is permissible for a company to license a domain name from its holding company or subsidiary and vice versa.

In response to the New Rules, to avoid any risk of cancellation, businesses (in particular foreign entities) may need to explore alternatives to licensing – i.e. by transferring the domain name to the third party, and potentially assigning any underlying trade marks or business names which provide the basis for eligibility. These transfers could be subject to a requirement to assign-back the domain names and trade marks to the original holder, after a fixed period has expired and/or subject to certain events occurring (such as the termination of a broader agreement between the parties).

A new complaints process

To accompany the modifications to the eligibility and allocation requirements, auDA has also introduced a new complaints process. The complaints process enables an entity to seek cancellation of a domain name, if they believe the registrant does not meet eligibility requirements.

The first step is to lodge a complaint with the specific domain name registrar – with each registrar having their own unique complaints process to resolve a complaint. There is a prescribed time limit of 30 days for the registrar to action the complaint.

In the event the registrar's process does not yield the desired outcome, the complaint can be referred to auDA for further review. Escalation of the complaint involves writing to auDA, who will then investigate the complaint. If still dissatisfied, a complainant may request an internal review from auDA, or failing that, an external review by the Licence Review Panel (administered by auDA).

Given the above, the new complaints process can be a more efficient and cost-effective option than bringing proceedings through WIPO or the courts. However, unlike WIPO and court proceedings, the complaints process can only result in cancellation of the domain name (and not a direct transfer of the domain name to the complainant). Therefore, if the complainant wishes to secure the domain name itself, it will need to pro-actively monitor its availability, and take additional steps to secure it.

Need help?

If you currently hold or license any .com.au or .net.au domain names, and are concerned about your compliance with the New Rules, please reach out to us discuss potential solutions.

Alternatively, if you have any concerns about a third party's ownership or use of a .com.au or .net.au domain name, we can assist with a complaints process or investigate other options for obtaining the domain name.

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https://www.minterellison.com/articles/the-new-au-domain-licensing-rules-what-has-changed

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