Selling Aussie Domains To Foreign Residents

Many people think that Aussie domains can only be registered by Australians.

The simple fact is that this is not the case – auDA policy allows a number of ways for non-Australians or foreign entitities to legitimately register .au domain names.

Before I wrote this article, I double checked my facts with auDA; and also with Erhan Karabardak (Director at Cooper Mills Lawyers and current Supply Class Director at auDA). Erhan had previously written an article on this subject back in 2011 – and as he told me yesterday, he had been meaning to update it for ages! The good news is that he has done so overnight – and I will be quoting from it here.

How Does It Work?

Like a lot of my fellow domain investors, I often get enquiries on my domains from foreign residents. Initially, a lot of them are under the impression that it is simply too difficult to become “eligible” e.g. they can’t get an ABN.

So let’s look at the actual auDA policy. As per Schedule C, these are the “Eligibility and Allocation Rules for COM AU”:

1.  To be eligible for a domain name in the com.au 2LD, registrants must be:

a) an Australian registered company; or

b) trading under a registered business name in any Australian State or Territory; or

c) an Australian partnership or sole trader; or

d) a foreign company licensed to trade in Australia; or

e) an owner of an Australian Registered Trade Mark; or

f) an applicant for an Australian Registered Trade Mark; or

g) an association incorporated in any Australian State or Territory; or

h) an Australian commercial statutory body.

I’ve highlighted the three options for overseas purchasers. The first option (d) is a bit too difficult to my mind. It’s costly; and there is annual reporting involved. However, if an overseas purchaser intends conducting business in Australia, then this is the sensible method.

The best and easiest option by far (in my opinion) is (f) – become an applicant for an Australian Registered Trademark. It’s fairly simple; very cost effective; and has no reporting requirements. (It’s very important to note that the TM must be maintained in order to remain eligible).

However …

Before overseas purchasers get excited, there is one other major requirement of auDA policy. Every registrant of a domain name must have a “close and substantial connection” to the domain name. This is defined in the same Schedule C of auDA Policy:

2. Domain names in the com.au 2LD must be:

a) an exact match, abbreviation or acronym of the registrant’s name or trademark; or

b) otherwise closely and substantially connected to the registrant, in accordance with the categories of “close and substantial connection” set out in the Guidelines on the Interpretation of Policy Rules for the Open 2LDs.

3. A domain name may also be registered in the com.au 2LD under paragraph 2(b) for the purpose of domain monetisation, in accordance with the explanation of “domain monetisation” set out in the Guidelines on the Interpretation of Policy Rules for the Open 2LDs, provided that the following conditions are met:

a) the content on the website to which the domain name resolves must be related specifically and predominantly to subject matter denoted by the domain name; and

b) the domain name must not be, or incorporate, an entity name, personal name or brand name in existence at the time the domain name was registered*.

As you can see, I have highlighted (3). There is nothing to stop overseas domain investors who are the owner of (or an applicant for) an Australian Registered Trademark registering multiple domains under the one trademark – provided that they employ domain monetisation.

The Cooper Mills Lawyers article explains it so:

“It is also worth noting that once a registrant is ‘Eligible’ then they can register more than one domain, they are not limited to a single domain. This equally applies to domain name investors who seek to use a trademark application as the basis upon which to acquire a portfolio of domain names for monetization purposes”.

Conclusion

• I have sold a number of premium domains to overseas purchasers via the “Application for Trademark” method. Believe you me when I tell you that it is a win / win situation!

• You can use a legal firm to assist your buyer with a TM application; or if you feel competent enough, you can also create an account at IP Australia, and do it yourself. If you’re doing this for the first time though, my advice would be to use a legal firm like Cooper Mills or Markwell. They charge somewhere between $1200 and $1600 (for a non-complicated one class application).

• I have approached all the drop-catching platforms to see if they can accommodate the “Application for Trademark” eligibility. I’m pleased to say that so far Drop.com.au and DomainShield.com.au can do so. Hopefully Netfleet won’t be far behind – this overseas market is a potential goldmine for dropcatchers!

• Please note that this is just general information – every person should get their own legal advice applicable to their own circumstances.

Ned O’Meara – 12th July 2016

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