With the development and usage of World Wide Web, mobile internet and mobile phones, the Chinese E-Commerce market got an enormous growth. According to “Chinese E-Commerce Market Data Monitoring Report 2016”, the E-Commerce transaction amount reached 22.97 trillion RMB in 2016.
For both Chinese and international enterprises, to join this market is a trend but also a necessity. As one of the mainly path for entering E-Commerce market, the meaning of domain name registration is therefore getting more and more important.
Worldwide exist 330 million registered domain names currently. In China is the number in the amount of 50 million. China is becoming the second largest domain name market in the world. This market is interesting for both domain name service providers and enterprises as domain user. The foreign providers need to know the policy and rules for running a domain name business in China. And how to register and protect domain name in China is now an important issue that the enterprises should pay attention to.
Chinese government is trying to improve their laws and rules of internet administration service. The Ministry of Industry and Information Technology of the PRC (MIIT) released a new version of the “Measures for the Administration of Domain Names on Internet” on September 1, 2017. These new measures took effect on November 1, 2017. The rules should further promote the foreign investment to come into the Chinese registration market on one hand; on the other hand encourage the user to choose the registrar, which is a in China registered legal person. At the same time the rules accelerate also the development of domain name with Chinese characters.
Doing business as service provider
Foreigners need to meet the following condition if they want to act as domain name service providers in China:
The provider should be a legal person with a good credit record. It should also possess capital, human resource and the technological capabilities for the business. And it should meet the safety requirement and follow the Chinese laws.
For register as service provider the following documents are required:
- letter of commitment of legitimate business operations and honesty business operations;
- document of company condition;
- certificate of competencies including management system, operating location, agreement of competent cooperation, etc.;
- internet information safety guarantee; and
- prove of creditworthiness.
An application should be filed by the MIIT for domain name Root server operating agencies and domain name management agencies, and by Local Communications Authority for domain name service agencies. Permitted application will get a validity of 5 years and can be renewed on application.
The administrative body in charge of the registration of domain names in China is the China Internet Network Information Center (CNNIC). The registration of domain name follows a “first come, first served” principle. And it is open to entities incorporated in China that will be able to assume civil liabilities independently. Foreign companies incorporated or registered outside of China will not be allowed to apply for and hold domain name registrations with CNNIC in their own name. However, if they have locally established subsidiaries or representative office, the subsidiaries or representative offices can file an application and hold the registration in the name of such subsidiaries or representative offices.
For application the following documents are required:
- an application form;
- a formal letter of request from the organization applying for domain name registration or a power of attorney entrusting an agent to file the application;
- copy of the identification card of the representative of the applicant handling the application; and
- Copies of the business registration documents of the applicant.
The CNNIC will examine the application and the applicant is required to pay an administrative fee in the amount of 300RMB per year. After the payment the domain name registration certificate will be issued.
It should be noted that domain names content contains such as endangering national security, infringe on legitimate rights of others or any other contains that forbid by other laws and regulations, are not allowed.
Protect your domain name in China
Similar to the problem with trademark squatting, domain name squatting is also a problem that enterprises have to face. Right of domain name can be seen as a extension of trademark rights. The dispute resolution process is comparable to the process for trademark dispute. The dispute resolution institutions in China are the China International Economic and Trade Arbitration Commission (CIETAC) and the People’s Court.
The basic criteria for a successful appeal are:
- the complainant’s rights are legitimate and effective;
- the defendant have no such rights over the disputed domain name; and
- the defendant acted in bad faith.
In bad faith acted the defendant, if the registration and use of the domain name is for commercial purposes, and the domain name is same or similar to the complainant’s registered trademark, domain name, etc., and confusion was caused; or the defendant neither uses nor intends to use the domain name, but has intentionally prevented the registration of the domain name by the person holding rights therein; or offered to sell the domain name.
A dispute resolution by CIETAC is more convenient than court litigation. But if the complainant is inclined to pursue compensation, court litigation should be the choice. Only the People’s court can order compensation.
In summary is highly recommended, in order to protect the legitimate rights in Internet, foreign enterprises should register domain name with help of a form CNNIC authorized agent as soon as possible. A competent agent can be helpful in completing the domain name registration process in a more efficient way.
Disclaimer: This article was first published on LinkedIn by Daniel Albrecht on https://www.linkedin.com/pulse/domain-name-registration-protection-china-daniel-albrecht/