Jack Ellis

Chinese entities now own almost half of all new generic top-level domain (gTLD) registrations, with nine of the top 10 new gTLD registrants associated with the country, according to recent reports. With another tranche of gTLDs just approved for sale by the Chinese government, many brand owners will be concerned about what this all means for their trademark protection strategies.

Michael Berkens of The Domains blog reported recently that, according to analytics site ntldstats.com, nine out of the top 10 registrants of second-level domains under new gTLD strings are Chinese. These top 10 registrants account for close to 3.2 million domain registrations between them, comprising about 11% of the more than 29 million registrations in new gTLDs that have been made so far.

Out of this total, 48% of registrations are owned by entities from China – a slight decrease from last year’s figures. The United States is the second most significant territory of origin, accounting for 10.5% of new gTLD domains, with Germany a distant third on just over 2%. Another 23% of domain registrants use a Whois privacy service, meaning that their country of origin or base of operations is unclear.

The simple matters of its huge population size and rapid economic growth suggest that China’s increasingly dominant position in domain name ownership should not come as too much of a surprise. But it is the country’s enduring reputation as a haven for counterfeiting and trademark infringement that is likely to have many brand owners concerned about its rise as an internet superpower.

The available evidence strongly suggests that China continues to be the world’s main source of fake goods – and by a significant margin. The US Chamber of Commerce’s Global IP Centre estimates that 86% of counterfeits originate from China; and, despite several promising signs of improvement in the country’s trademark system, it is clear that infringement remains a major issue for resident and non-resident rights holders alike.

Coupled with this is data indicating that new gTLDs are an increasingly popular tool for parties engaging in illicit activity online. A recent study from cybersecurity firm PhishLabs found that while new gTLDs only accounted for 2% of all phishing domains in 2016, the overall number of phishing sites hosted on them increased by more than 1,000% over the course of the year. Another recent report, this time from IBM, revealed that new gTLDs comprise seven of the top 10 domains used by spammers. With specific reference to China’s domain name growth, the IBM report predicts that the ‘.xyz’ new gTLD is likely to feature more prominently in spamming activity in the near future following the Chinese Ministry of Industry and Information Technology’s (MIIT) accreditation of the string back in December.

For trademark owners, that brings some added weight to the news that the MIIT has just approved a further five gTLDs for sale to Chinese consumers. The strings ‘.info’, ‘.mobi’, ‘.red’, ‘.pro’ and ‘.kim’ have now been licensed by MIIT, bringing the total number of gTLDs – including new gTLDs launched since 2013, as well as earlier strings – available to Chinese domainers up to 15. On Domain Incite, Lucky Masilela, the CEO of ‘.africa’ registry ZA Central Registry, is quoted as saying that he expects “a huge uptake” from the China market once general availability opens.

For brand owners, the worry will be that China’s ever-growing stake in online real estate means ever-greater opportunities for trademark infringers, cybersquatters and counterfeiters. Whatever the eventual outcome, it seems inevitable that China is likely to feature more and more prominently in the day-to-day work of trademark counsel.

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