October 19, 2017
The Rise of Domain Names: How to Protect Them?
The current rising trend in e-commerce has led to an increase in the number of domain name registrations worldwide. In Malaysia, as of September 2017, there was a total of 327,109 “.my” domain names registered. These numbers, however, have inevitably led to a surge of legal concerns and disputes regarding the use and ownership of domain names already registered. In order to settle such disputes in a more resourceful manner than litigation, a party may turn to an alternative solution offered by Domain Name Dispute Resolution (DNDR) providers, such as KLRCA.
Given the current trends of global economic modernisation and internationalisation, electronic commerce or e-commerce is no longer an amenity, but rather a necessity. This statement is supported by the statistics and forecasts, as global retail e-commerce sales are expected to reach $4.48 trillion by 2021, which means an increase of 141% since 2016. This phenomenon has an obvious consequence: an exponential growth of webpages and, hence, a surge in registration of domain names.
In order to put up a page on the internet, the interested party must choose and register a domain name. A domain name is the identification of one or more IP addresses that correspond to a particular webpage or, to put in other words, it is the “human-friendly address” of each website. Having this in mind, the importance of an appropriate domain name is clear and may involve parties paying huge amounts of money to get it right. For instance, the domain name “insurance.com” had the registering party pay a total amount of $35.6 million, making it the most expensive domain name in history. In 2017, the average sale price of the top ten “.com” domains, according to DN Journal, is of $917,000. As an interesting fact, the domain name “.tk” corresponding to the small island-country of Tokelau, in the Pacific Ocean, is the only free country-code top-level domain (ccTLD) that exists. It was established in 2006 and nowadays holds the second position of top ccTLD in the world.
In the recent years, the registrations of domain names of all types have gone over the roof. VERISIGN, a global specialist in domain name and internet security, has stated that on the second quarter of 2017 there was a total of approximately 332 million domain name registrations of all top-level domains (TLDs). According to their numbers, there is a steady annual growth of 2.1%. TLDs are those domains of the highest level of importance in the Domain Name System of the internet, such as “.com”, “.org” or “.net”. On the other hand, the total number of ccTLDs have increased a 2.6% over a year to year basis, to 144.2 million registrations on the second quarter of this year. The leading ccTLDs with more registrations as of the first half of 2017 was “.cn” (China) with 21.4 million, followed by “.tk” (Tokelau) with 19.1 million, “.de” (Germany), with a total of 16.2 million, “.uk” (United Kingdom) with 10.7 million, and “.ru” (Rusia) with 6.4 million.
With regards to Malaysia, as of 30th September 2017, the number of registered domain names with “.my” was 327,109, according to the data offered by MYNIC, the sole administrator for web addresses with “.my” in Malaysia. This represents a steady increase of 2% over the same date of the previous year, which had a total of 320,619 registered domain names. In addition, the number of registrations have continued to expand at a determined and relentless pace. Since the first official record of registered “.my” of January 2008 to the present, the growth of registrations is of an outstanding 426.3%.
Malaysia’s domain name growth is more or less parallel to other countries within the ASEAN region. For instance, Vietnam and its domain name “.vn” has, as of 30th September 2017, 418,534 registered domains, which represents an increase of 10% compared to the same period of 2016. Since its first collected data by VNNIC, the Vietnamese administrative body, of January 2012, the number of registrations has grown a 129.8%. Singapore, on the other hand, has had a growth of -1.2% of registrations in the past year. Overall, since the first data collected by its administrative body in Singapore in June 2009, the number of registered domain names has increased in a 63.4%, fairly slower compared to Malaysia and Vietnam.
Given the continuous registration of domain names, legal concerns and disputes have as such proliferated. The problems shall arise when two parties have a conflict over who has the right of registration, ownership and/or use of a certain domain name. A usual dispute is related to cybersquatting, in which a specific party has registered a domain name with the objective of selling it to the trademark owner for profit or commercial gain. Another standardised issue is typo-squatting, where a party has misspelled a word of the domain name on purpose in order to lure internet users who were looking for the legitimate site to their misspelled site.
When a problem of this nature arises, the consequences are bound to affect the rightful owner of the domain name in a significant manner. From monetary bribe to abuse of the law, in cyber-squatting cases; from economic loss to damage of the image and brand, in typo-squatting. In these situations, the Complainant has two options: it may seek for judicial relief or it may choose an alternative dispute resolution.
On the whole, litigation over any conflict may be lengthy and costly and with tight procedural steps, whereas alternative dispute resolution enjoys more flexibility and has quicker, cost-effective procedures. In domain name disputes, there is no difference. The judicial process of domain name disputes may be quite lavish, as legal standards are not uniformly applied. On the other hand, alternative resolution is available in the form of a simple administrative process. The party seeking relief may ask for the cancellation of the domain name or its transfer from the misconducting party, but no pecuniary award for damages. Given the nature of the disputes and their immediate consequences on the Complainant, there is a need to act swiftly and refrain the counterparty as quickly as possible. As a result, the most efficient manner to prevent any more harm is to resort to alternative dispute resolution for domain names.
Therefore, this alternative resolution procedure ultimately has the same effects towards the domain name as the judicial process, making the former more efficient than and as effective as the latter. In fact, the number of cases handled by alternative dispute resolution centres continues to grow. For instance, 2016 was a year of records for domain name disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP). The World Intellectual Property Organisation (WIPO), as a UDRP service provider, registered 3,022 cases in 2016, which is almost a 10% increase with respects to the previous year. The Asian Domain Name Dispute Resolution Centre (ADNDRC), with four operating offices at CIETAC, HKIAC, KIDRC and KLRCA, in 2014 handled 226 cases under UDRP of a total of 246. The total number of cases of ADNDRC also represent an increase of 41% from 2013.
Within the ambit of ADNDRC, the Kuala Lumpur Regional Centre for Arbitration (KLRCA) handles cases for generic TLDs under the UDRP. These domain name proceedings require that the Complainant fills in an electronic form (Form C) and serves it on KLRCA, along with the relevant documentation, the relief it seeks and payment of the administrative fee. Once the complaint has been admitted, the Respondent has 20 days to submit its response. After that deadline, the Expert Panel must deliver a decision within 14 days, which shall be implemented in a period of ten days from its date of service. Moreover, under ADNDRC rules, a Complainant may submit to a Uniform Rapid Suspension (URS) System. Under this set of rules, KLRCA shall confirm the compliance of the complaint within two days and have the domain name locked in the next 24 hours as a precautionary measure.
KLRCA handles also other domain name disputes, in which it is the sole authorised provider of alternative resolution, for the ccTLD “.my” registered under the MYNIC rules and ccTLD “.bn”, under the collaboration with the Brunei Darussalam Network Information Centre (BNNIC). These proceedings also require that the Complainant fills in a form (Form A) and delivers it to KLRCA, along with the relevant documentation, the relief sought and the payment of the administrative fee. After this step, KLRCA shall confirm its compliance to the rules and the Respondent shall have 15 working days to deliver its response. Subsequently, the panel shall convey its decision within 14 working days. It shall be noted that all domain name proceedings at KLRCA, including those under ADNDRC, are intended to be settled in under 60 days since their commencement date. Furthermore, processes are intended to be totally hassle-free, as they just require a form to be filled and filed in order to commence.
Hence, when conflicts regarding domain names arise, the damaged party may resort to alternative dispute resolution in order to protect and safeguard their rights towards a particular domain name. Under this rationale, KLRCA offers multiple services of alternative resolution to ensure domain names and promote legal security within this niche area.
The fact that KLRCA manages and administers domain name disputes regarding two ccTLDs, plus the those of generic TLDs arising from the ADNDRC rules, makes the centre one of the most experienced and efficient domain name dispute resolution providers in Asia. KLRCA counts with reputed DNDR panelists and with a top-notch and expert legal team administering the disputes that ensure a proper management of the forecasted surge of domain name disputes, offering swift solutions to immediate problems.
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For further information or enquiries please contact our Domain Name Dispute Resolution help desk at firstname.lastname@example.org
Article prepared by:
Alonso Mayordomo Castilla: Alonso@klrca.org
Raquel Cubas Paryag : Raquel@klrca.org
 Retail e-commerce sales worldwide from 2014 to 2021 (in billion U.S. dollars), Statista, The Statistics Portal (2017), https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
 Definition used in the FAQ at WIPO’s webpage.
 Tommy Andres, The tiny island with a huge Web presence, CNN Radio, July 10, 2012.
 The Domain Name Industry Brief; Volume 14 - Issue 3 – September 2017. The Verisign Domain Report.
 Data obtained at the MYNIC webpage.
 As of 30th January 2008, the total number of registered domain names was 62,146, according to MYNIC.
 Data obtained at the VNNIC webpage.
 As of 30th January 2012, Vietnam had 182,122 registered domains, according to VNNIC.
 The data taken into account corresponds to SGNIC’s webpage, which establishes that the number of registered domains with “.sg” in September 2016 was 179,831 while in September 2017 was of 177,684.
 According to FAQ at WIPO’s webpage.
 Sri Sarguna Raj, Disputes over Malaysian Registered Domain Names, Skrine, http://www.skrine.com/index.php?option=com_content&view=article&id=279&
 Doug Isenberg, It’s Official: 2016 was a Record Year for Domain Name Disputes,The GigaLaw Firm (Jan. 4, 2017), https://giga.law/blog/2017/01/04/its-official-2016-was-a-record-year-for-domain-name-disputes
 Data from the Asian Domain Name Dispute Resolution Centre, Annual Report 2014 (latest Annual Report published).