ARTICLE
2 July 2008

Australian Domain Names Up For Grabs?

SF
Spruson & Ferguson

Contributor

Established in 1887, Spruson & Ferguson is a leading intellectual property (IP) service provider in the Asia-Pacific region, with offices in Australia, China, Indonesia, Malaysia, Philippines, Singapore, and Thailand. They offer high-quality services to clients and are part of the IPH Limited group, which includes various professional service firms operating under different brands in multiple jurisdictions. Spruson & Ferguson is an incorporated entity owned by IPH Limited, with a strong presence in the industry.
Up until now it has been difficult to answer questions about the value of Australian domain names and whether they can be transferred. Firstly, the Australian Domain Name Administrator (auDA) has been quite restrictive in its approach to domain name transfers.
Australia Intellectual Property

So how much is www.sexy.com.au worth and can I sell the name? Actually, RU Sexy already beat you to that name but substitute another prospective domain name of your choice.

Up until now it has been difficult to answer questions about the value of Australian domain names and whether they can be transferred. Firstly, the Australian Domain Name Administrator (auDA) has been quite restrictive in its approach to domain name transfers. Secondly, there is little publicly available information about the price for which Australian domain names have been sold.

There is more public information about prices paid for dotcom domain names. However, Australian domain names are unlikely to have anywhere near the same value as a general rule. Some people say that a good rule of thumb is to divide the price paid for a dotcom domain name by 100 to get the value for a .com.au equivalent. Still, that could be a significant sum. So why the sudden interest in domain name values? auDA recently announced that it will be relaxing its rules on domain name transfers. Up until now, domain name transfers were effectively limited to situations where a person was selling their whole business along with the associated domain name.

The key features of the new auDA policy on domain name transfers are:

  • domain names cannot be registered for the sole purpose of resale or transfer. The aim is obviously to prevent the speculative registration of vast numbers of domain names for later sale.
  • a domain name cannot be transferred within 6 months after registration. No doubt this restriction is related to the first point in seeking to reduce opportunities for domain name trafficking. But let's hope this does not restrict legitimate transfers associated with business sales.
  • after the 6-month waiting period, the domain name can be offered for sale by any means.
  • a standard transfer form will apply and the registrar may charge a transfer fee. If there is a significant increase in the volume of domain name transfers, this administration fee could be a good money spinner for registrars.
  • interestingly, parties who are involved in a domain name transfer will be asked to disclose the sale method and price to enable auDA to provide aggregated market data. Disclosure is voluntary and confidential. auDA will publish this data in a de-identified way to give prospective buyers and sellers a better idea of market prices for an Australian domain name. While this has the potential to give a much clearer idea of domain name values, it will be interesting to see whether parties do disclose this information.

It is hoped that the new policy will be in effect by mid 2008 following further consultation with stakeholders and allowing time for system changes needed to implement the policy.

So now may be an excellent time to get in and register all those domain names you have long been thinking about. Of course you never have any intention of selling them, well at least for 6 months anyway. It will be interesting to see whether there is a sudden spike in domain name registrations in coming months.

But before we all get too excited, auDA has advised that its existing rules in relation to eligibility to apply for a domain name will remain. So you will still need to demonstrate a legitimate interest in applying for the name such as being the holder of an associated trade mark or company or business name or being able to demonstrate another legitimate connection between the domain name and your business. While this requirement will create some restrictions, enterprising domain name traders will no doubt find ways to accommodate these requirements while amassing substantial portfolios of tradeable domain names.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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