New transfer policy for '.au' domain names

The new domain name transfer policy for '.au' domain names has come into force.
In December 2007 the board of '.au' Domain Administration Ltd (auDA), the administrator of the '.au' domain name, approved a recommendation that the existing domain name transfer policy be relaxed. The new transfer policy, which came into force on June 1 2008, allows '.au' domain names to be transferred to another entity for any reason. In contrast, the former policy permitted transfer only in a limited number of circumstances.
The key features of the new policy include the following:
  • The registration of a domain name for the sole purpose of resale or transfer to a third party is prohibited;
  • Domain names cannot be transferred during the first six months of registration (initial registration only);
  • After the initial six-month period, a registrant will be free to transfer the domain name by any means; and
  • The new registrant must comply with normal eligibility and allocation rules.
Some commentators have raised concerns that the new policy will facilitate the practice of cybersquatting - that is, the registration of a domain name for the sole purpose of selling that domain name to a person with a stronger entitlement to that name. 
While the new policy makes it easier for domain names to be transferred by allowing transfers for any reason, it seems that it stops short of creating an open secondary market for '.au' domain names, as it prohibits registration of a domain name for the sole purpose of resale. However, it is difficult to see how this prohibition will be monitored or enforced in practice. Moreover, while the six-month holding period may act as a deterrent to cybersquatting in some cases, it is unlikely to dissuade a cybersquatter convinced that there is money to be made in a particular domain name.
However, although the new policy permits the transfer of a domain name for any reason, the initial registrant and transferee must still satisfy the normal eligibility rules. These rules include the requirement that:
  • there be a close and substantial connection between the domain name and the registrant; and
  • the domain name be an exact match, abbreviation or acronym of the registrant’s name or trademark. 
The continuation of the eligibility criteria to the new transfer policy makes it unlikely that the new transfer policy will result in any dramatic increase in the incidence of cybersquatting. Even if the new policy makes cybersquatting more attractive, a potential cybersquatter still faces the same barriers to obtaining registration in the first place, and any secondary market created by the policy is still limited to those with legitimate interests in a domain.
Given that the new policy removes only the restrictions on the circumstances of a transfer (but not the restrictions on whom a domain may be transferred), it may ultimately prove beneficial to businesses, as it will allow parties with a legitimate interest in a domain name to deal with it in a more commercial manner.
Justin Gay and Julian Wan, Corrs Chambers Westgarth, Melbourne

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