It is likely that Australian businesses and users will soon be able to register domain names directly at the second level (eg yourname.au) as well as in the existing second level domains (eg yourname.com.au). This will impact owners of existing brands and .au domains who are likely to have to register additional names to continue to protect their brands online. In this post, partner Robert Gregory and lawyer Georgia Adams break down the key changes and the likely impact on organisations.

Four years after the Policy Review Panel (Panel) recommended that Australians should be able to register domain names directly under .au, a Final Report on recommendations for implementation and reform of existing policies (Report) was released on 25 March 2019 to the .au Domain Administration Ltd (auDA) Board.

The recommendation is to open up direct registration of domain names at the second level to all Australians (see key below). To be eligible for a domain name ending in .au, the Panel recommends that the registrant must have a connection to Australia, for example be an Australian citizen, permanent resident or entity established under Australian law

Many will see this as an additional cost to business and internet users (and revenue to the domain name industry) with no additional benefits to businesses or users.

The Panel supports the view that there are no proprietary rights in a domain name and a domain name is held under a limited licence. A summary of the Panel’s recommendations in the Report for reforming the existing policies is below.

Implementing direct registration

The Panel recommends that the implementation process should be completed in less than a year. It proposes a ‘lock-down model’ in the event of a conflict as to who should be entitled to a domain name. Until the conflict is resolved no one may use the domain name. The Panel considers it reasonable to indefinitely lock up a number of domain names to protect existing domain name licensees.

The Cost-Benefit Analysis Report states that a benefit of direct registration is its potential ability to enhance growth in the value of internet shopping. Additionally, a small increase in e-commerce will more than outweigh the costs that auDA will spend marketing and promoting direct registration. The Consumer Survey conducted shows a high expected trust for websites using the .au domain name even though .au has not yet been launched. The .au was rated as easy to remember but other domains such as .com.au and .com are often preferred. Another report around stakeholder engagement and focus groups shows general agreement with the Panel’s recommendations. One focus group strongly suggested that ‘eligibility for registration in .au should be set a high benchmark’.

Reform of existing policies

In summary, the Panel recommends the following:

1. Where an applicant relies on a trade mark registration to establish an Australia connection, the trade mark must be an exact match to the domain name.
2. Stricter controls be put in place to prevent resale or warehousing (ie where domain licences are purchased for future resale when they become more valuable).
3. Domain registration be permitted for online directories and informational services that relate to the subject matter denoted by the domain name.
4. Where a domain licence is transferred, the new owner receives the benefit of the remaining licence period (currently that period is lost if it is sold).
5. Existing licence holders be exempt until the end of the current registration period as they may no longer meet the new rules because the existing policies will become more strict.
6. A suspension process rather than cancellation of a domain name licence.
7. Retain the following policies:
   • ‘Prohibition on Misspellings’: which prohibits the deliberate misspelling of personal or brand names to trade off the reputation of that brand. For example, Woolworth.com.au, quantas.com.au or e-bay.com.au. However, auDA have discretion to allow the misspelling if the registrant can demonstrate legitimate grounds.
   • ‘Reserved List’: which prohibits words, phrases and acronyms under Australian law. For example, ‘ANZAC’, ‘Olympic Games’ or ‘Federal’. The Panel recommends this list be publicly available.

It is likely that the auDA will implement the recommendations of the Panel.

So what should my organisation be doing now?

Given the impact of the recommendations, now is the ideal time for organisations to:

1. audit their existing domain name registrations to understand what domain registrations are currently registered by the organisation;
2. consider whether it may be necessary to apply for additional trademark registrations and whether an ‘Australian presence’ can be established for an .au domain; and
3. appoint a key stakeholder within the organisation who is responsible for managing the process of applying for any new additional direct registrations.