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Public Comments on the "Consultation Paper on the Review on Administration and Assignment of Internet Domain Names and Internet Protocol Addresses in Hong Kong"

Consultation Paper on the Review on Administration & Assignment of Internet Domain Names and Internet Protocol Addresses in Hong Kong

CWHKT welcomes this opportunity to comment on the administration and assignment of Internet domain names and Internet protocol addresses in Hong Kong.

CWHKT's Views

CWHKT is broadly supportive of the recommendations put forward by the Taskforce in its report. CWHKT welcomes the Taskforce's statement that appropriate registration policies should be drawn to strike a balance between encouraging the development of electronic commerce in Hong Kong and guarding against cyber squatting. CWHKT believes that as expressed in the World Intellectual Property Organisations Final Report of the WIPO Internet Domain Name Process (the WIPO Report) that it is important that proposed registration practices do not hamper or distort the speed with which events are able to occur in the Internet world. Overly restrictive registration practices will not only distort the speed with which activities on the Internet occur but will also result in a stifling of other key strengths of the Internet which include its ability to foster innovation and encourage diversity. CWHKT also believes that given the global nature of the Internet the practices adopted by Hong Kong must be in line with those adopted internationally.

Given these fundamental principles, there are a number of recommendations on which CWHKT would like to comment. These recommendations are set out below.

Reserved List

The Taskforce recommends that the registration authority should draw up a reserved list of well-known international trademarks, services marks and brand names and make the list available on the Internet. It is suggested that such a list could be based on the reserved lists prepared by other cc TLD registration authorities. CWHKT suggests that in developing any such list of names the registration authority could be guided by the WIPO Report in terms of the factors that should be taken into account in determining whether a mark is well known. The non-exhaustive criteria that have been put forward in the WIPO Report include:

  • the degree of knowledge or recognition of the mark in the relevant sector of the public;
  • the duration, extent and geographical area of any use of the mark;
  • the duration, extent and geographical area of any promotion of the mark including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;
  • the duration and geographical area of any registrations, and/or any applications for registration, of the mark, to the extent that the reflect use or recognition of the mark;
  • the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognised as well known by courts or other competent authorities; and
  • the value associated with the mark
  • evidence of the mark being the subject of attempts by non-authorised third parties to register the same or misleadingly similar names as domain names.

Format and business nature of a domain name

The Taskforce recommends that the second level domain name category being selected for a particular domain name application should similarly correspond to the business nature of the applicant and suggest that it might seek evidence from the relevant business registry in order to confirm that this is the case.

CWHKT appreciates that the motivation behind this recommendation is to deter cybersquatting. However CHWKT believes that this approach is likely to limit the ability of parties to develop new businesses and seek out new opportunities if they are to be limited to registering a name that corresponds to their existing business name or which is in accordance with their current provision of goods or services. CWHKT believes that there are more appropriate ways to deal with the issues of cybersquatting than by providing overly restrictive rules on the domain names that particular parties can register.

Multiple Registrations

CWHKT firmly supports the ability of a party (other than an individual) to register multiple domain names provided that other steps to deter cybersquatting are taken in parallel with this approach.

Transferability of domain names

CHWKT supports the transferability of domain names on valid grounds such as the ownership or distribution right of a company, its products or services has been transferred. CWHKT also believes that there should be some limited scope for the commercial transferability of domain names. CWHKT does not support purposeful resale of domain name for commercial gain. CWHKT can envisage circumstances where commercial transfers would be appropriate such as in circumstances where a company with a legitimate right to a domain name goes into liquidation, for example, and the liquidator in charge of that company could obtain a commercial price for the transfer of that name. In such circumstances CWHKT believes that there should be no bar on the commercial transfer. Clear guidelines on circumstances under which domain names could be transferred should be made public.

First Come, First Served

While CHWKT supports the first come, first served principle on the basis that such a principle avoids unnecessary delays involved with requiring a registrar to search all of the applicable information to determine whether there is a party with a more legitimate right to the domain name then the applicant, CHWKT agrees that the applicant must be required to give a representation that to the best of the applicant's knowledge that the domain name does not interfere with or infringe the intellectual property rights of another party. CWHKT would suggest that the Taskforce should perhaps consider the wording adopted by ICANN which requires the applicant to represent that to the best of its knowledge and belief, neither the registration nor the manner in which it is directly or indirectly used infringes the legal rights of a third party. CHWKT also believes that the applicant should be required to make a representation that all of the information provided by the applicant is true and accurate.

Renewal of domain names

CWHKT supports the Taskforce's recommendation that domain names should be subject to a renewal process and that the renewal fees should cover the administrative costs of the process and enable the registration authority to operate on a self-financing basis. CHWKT believes that the Taskforce should consider the recommendation put forward in the WIPO Report that failure to pay the renewal fee within a specified time should result in cancellation of the registration.

CHWKT also suggests that the Taskforce should consider whether if at the time of renewal of a registration of a domain name, applicants who have yet to commence using the domain name should be required to make a statement as to their intention to use the domain name during the period of the next renewal. While CWHKT acknowledges that in the WIPO report it was recognised that there are circumstances in which it might be legitimate to register a domain name and to hold it "without" use and that therefore a statement of intention to use should not be required, CWHKT believes that the issue requires further consideration particularly given that there has been no discussion of how long a renewal period should last for. CHWKT believes that if long renewal periods are to be chosen then there may well be benefits in introducing a requirement that on renewal, a party who has yet to commence using their domain name should be required to make a statement as to their intention to use the domain name within the next renewal period.

Individual Domain Names

While supportive of the proposal that individuals should be allowed to register their names in a new second level domain under. hk, CWHKT queries how exactly the requirements that such domain names should be required to be derived directly from the names appearing on their Hong Kong identity cards will be resolved alongside the obvious problem of individuals with identical names. CHWKT believes that there are a number of issues which will require careful resolution before this policy can be proceeded with.

Dispute Resolution for .hk Domain Names

The Taskforce's recommendations with respect to dispute resolution issues relating to domain names is that:

  • the registration authority may appoint organisations which provide arbitration and mediation services to act as domain name dispute resolution service providers. The registration authority and the dispute resolution service providers will agree on a stipulated service level (e.g. turn around time, availability of qualified panellists to serve the arbitration panels, factors to be taken into consideration in deciding disputes etc)
  • the dispute resolution procedure will be invoked if the claimant is able to produce the following evidence to one of the service providers-
    • the registered domain name is identical or confusingly similar to a trademark or service mark to which the claimant has rights;
    • the registrant has no rights or legitimate interests in respect of the domain name; and
    • the registered domain name is being used in bad faith.
  • the dispute will be handled by an independent arbitration panel provided by the dispute resolution service provider.
  • the arbitration panel will inform the disputed parties once a decision has been made. In the event that the registrant loses, an appeal against the decision may be made to the courts in Hong Kong within a specified period. If no appeal is made within the stipulated period, the domain name of the registrant will be deleted from the domain name database.
  • the domain name registrar receiving complaints against domain name will take no action until it receives instructions from the registrant or an order of a court or a dispute resolution service provider handling the concerned dispute.
  • notwithstanding the establishment of an alternative dispute resolution procedure parties involved in domain name disputes may go to the court to resolve their dispute before the alternative dispute resolution procedure commences or to contest the result of the dispute resolution.

CWHKT supports the idea of a dispute resolution process to provide a speedy, efficient and cost effective alternative to litigation. CHWKT agrees however that the overall right to litigate should be retained for the parties. CWHKT would also suggest that the Taskforce should consider mandating a requirement as that domain name applicants should in the domain name agreement be required to submit without prejudice to other potentially applicable jurisdictions to the jurisdiction of the courts of the country where the registrar is located. A similar requirement that domain name applicants be required to submit to jurisdiction was recommended in the WIPO Report.

CWHKT believes that it is important for the dispute resolution procedure to ensure as far as possible that the decisions that are made by arbitration panels are based on consistent principles. CWHKT also believes that in order to ensure the speedy resolution of disputes the arbitration panel should only be entitled to rule on the validity or otherwise of the applicants claim to the domain name, the transfer of the domain name registration to the third party complainant and the allocation of the responsibility for payment of the costs of the proceedings.

CWHKT believes that in assessing the question of whether a domain name has been registered in bad faith the following factors which were put forward in the WIPO Report should be considered as evidence of the registration and use of a domain name in bad faith:
(i) an offer to sell, rent or otherwise transfer the domain name to the owner of the trade or service mark, or to a competitor of the owner of the trade or service mark for valuable consideration; or
(ii) an attempt to attract for financial gain, Internet users to the domain name holders website or other on line location, by creating confusion with the trade or service mark of the complainant; or
(iii) the registration of the domain name in order to prevent the owner of the trade or service mark from reflecting the mark in a corresponding domain name, provided that a pattern of such conduct has been established on the part of the domain name holder; or
(iv) the registration of the domain name in order to disrupt or cause inconvenience to the business of a competitor.

CWHKT also believes that a key issue relating to the alternative dispute resolution process with respect to domain names is the level of costs above. CWHKT agrees with the WIPO Report findings that the dispute resolution procedure is likely to entail the following cost elements;
(i) an administration fee to be paid to the dispute resolution service provider;
(ii) the fee to be paid to the panel of decision makers;
(iii) other fees that may be incurred in relation to the proceedings.

CHWKT believes that while the third party claimant should be required to pay an administration fee at the outset of the process, the sharing of costs and perhaps the reallocation of the liability for the administration fee between the parties is a matter that CWHKT believes can be fairly left to the arbitration panel to be decided on conclusion of the arbitration process.

CWHKT also believes that the procedures to be adopted by the arbitration panel should be as speedy and efficient as possible. In this case CWHKT believes that the use of electronic or on line filings as suggested in the WIPO Report should be considered.

Proposed Institutional Arrangements
While CUHK is the only registrar in Hong Kong now, it is CWHKT's view is that if there are other qualified parties interested to provide the service, these parties should be invited to be the registrar. CWHKT appreciates that more competition may drive down the cost and improve service quality.

Regardless of whether the new non-statutory, non-profit making corporation is to be spun off from JUCC, it is important that the organization has an appropriate level of transparency, in particular in making its new rules and decision. It is also desirable if an appeal mechanism can be established for check-and-balance.