Background The Internet Corporation for Assigned Names and Numbers (“ICANN”) has approved the use of .xxx as a sponsored top-level domain (“TLD”) intended for use by the adult entertainment industry in March 2011. The first stage of registration for .xxx domain names has started on 7 September 2011. Trade mark owners should be aware of the risk that third parties may register .xxx domain names that are identical or similar to their trademarks. The Risks Cybersquatting has been a phenomenon that has existed since the commercialisation of the Internet, where a third party registers a domain name which is identical or similar to the name of a well-known firm or brand with the sole intention of selling it on to the firm at a higher price. Third parties may also register such domain names in an attempt to lure customers into a scheme of fraud by representing themselves as the genuine firm. In the context of .xxx domain names, the prime concern of non-adult businesses would be the negative connotation on the image of the firm when one of its trademarks is used as the domain of an .xxx website. Pre-empting the Risk The registrar of .xxx domain names, ICM Registry, has provided for a scheme for trade mark owners to exclude their names from the .xxx regime permanently for a one-off fee.  Owners of existing trade marks may exclude their trade marks by submitting a reservation request under the “Sunrise B” stage of the launch of the .xxx domain from 7 September 2011 to 28 October 2011. To be eligible for reserving a domain name under Sunrise B, the following conditions have to be met: 1.          The trade mark must be a registered trade mark ; 2.          The trade mark must be of national or regional international effect; 3.          The trade mark must be issued prior to 1 September 2011; 4.          The trade mark must be in full force and effect; and 5.          The domain name sought must correspond to the complete textual component of the trade mark. After a Sunrise B registration is accepted, the domain name will be reserved and visitors of the domain will be directed to a site maintained by the registrar indicating the reserved status of the name with no reference to the ownership of the domain name. The Limitation The Sunrise B scheme only provides for the reservation of one domain name per trade mark and it must exactly correspond to the whole of the text on the trade mark.  Thus it cannot protect domain names which are variations of a trade mark like abbreviations or typographical errors of it, in which case the only way to prevent such domain names to be registered by a third party would be registering them in the free availability stage before a third party does so. Taking down a Domain Name There are quite a number of ways to take down an infringing .xxx domain name after it has been registered under the domain registry’s policies and common law.  The most notable of which is the Rapid Evaluation Service Policy (“RES”), which was intended to provide a quick remedy to clear cases of abuse of registered trade marks or names of individuals. In order to be eligible to participate in the RES regime, the complainant has to show: 1.          the domain name is identical or confusingly similar to a registered trade mark that the complainant owns and uses; 2.          the respondent does not have any rights or legitimate interests in the domain name; 3.          the domain name is being used in bad faith or is not conceivably susceptible to be used in good faith.   In a successful complaint under the RES regime, the domain name(s) in question will be cancelled and reassigned to the registrar and all traffic to the domain name will be redirected to a webpage signifying the deactivation of the domain name. Implications on Businesses Businesses should review their trade mark protection practices to prepare for the official implementation of the .xxx domain on 6 December 2011.  Considerations may include reviewing their current trade mark watch service to see if it covers .xxx domain names, whether persons designated to detect online infringement of trade marks have network permission to visit .xxx websites and what company policy shall be implemented against the registration of .xxx domain name which infringes its trade mark. Businesses also have to decide on whether they are to participate in the Sunrise B Scheme to block the registration of their trade marks as .xxx domain names and whether they are to register variations of their trademarks as .xxx domain names to prevent the registration and misuse of such domain names by third parties. Businesses should also discuss with their lawyers to examine the various gateways available to tackle the misuse of domain names by third parties and to formulate an enforcement strategy against such infringers.

IMPORTANT: The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

For enquiries, please contact:

Hans Lee Partner, Chartered Patent Attorney (UK), Head of Intellectual Property & Technology T: (852) 2107 0337 E: hans.lee@onc.hk

Derek Lau Senior Associate T: (852) 2107 0329 E: derek.lau@onc.hk

Published by ONC Lawyers © 2011