Although the Internet acts as a gateway for European SMEs, it is also an ideal platform for infringers to sell counterfeit products and to commit fraud. Learn how to protect your domain name and read about recommended online Intellectual Property Right (IPR) protection strategies.

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Protection of online IPR in China
Overview: China and the internet
The use of the internet is booming in China. With more than 298 million ‘netizens’, China connects more people
to the internet than any other country. The number of registered ‘.cn’ domain names has increased to 14 million,
making ‘.cn’ the largest and fastest growing country suffix in the world. Continued growth in the number of
people in China using the internet is predicted over the next decade, facilitated by the increasing availability of
broadband technology and the growing trend towards online shopping and purchasing. The internet is therefore
an attractive business and marketing platform for many European SMEs who are working with, or in China.
Although the internet acts as a gateway for European SMEs, it also acts as an ideal platform for infringers to sell
counterfeit products and to commit fraud. The internet provides a low cost method of reaching consumers
around the world without revealing identity or origin of operation, meaning that infringers can operate
anonymously.
Why is internet domain name protection important?
Companies operating in China are facing an increasing number of online threats, such as fraud, counterfeit sales,
false affiliation, phishing, slamming, and traffic diversion.
These threats may at best lead to consumer confusion or lost web traffic but at worst, they may lead to lost
emails, lost business, and in some cases, to law suits from consumers against (genuine) IPR holders. In general,
the various online criminal activities may lead to brand dilution, increased risks, loss of business and to an
eventual loss of reputation (and ultimately profit). The all‐reaching nature of the internet means that even EU
SMEs operating exclusively in their home markets cannot ignore the risks these activities may pose their business,
even if these activities originate in China.
What are the risks of domain name infringement?
The classic form of domain name infringement is known as ‘cyber‐squatting.’ ‘Cyber‐squatting’ is when a person
or entity with no legal rights to a particular domain name consciously (in bad faith) registers a domain name
identical to a third party company, product or trademark name. The cybersquatter is taking advantage of the first
to file principle that applies to domain name registrations, and is seeking to sell the domain name to its ‘rightful’
owner at a high price. As much as this is still frequently occurring today, this is no longer the main motivation for
infringers who register domain names infringing on third parties.
In recent years, what is referred to as ‘monetisation’ of domain names has become more common. This is
registering domain names with misspellings or ‘typos’ of famous brands, or company names. The registrant, or
the ‘domainer,’ as domain name monetisers are called, benefits from the traffic generated when people mis‐type
a URL into a browser to find a website. If an internet user mistypes the URL ‐ i.e. types www.euroap.eu instead
of www.europa.eu the user reaches the website of www.euroap.eu, where the registrant of the domain name
euroap.eu can place a number of sponsored links from large search engines such as Google or MSN, or from
parked providers such as ‘Sedo’ or ‘DomainSponsor’. If the internet user then clicks on one of those exposed links,
the registrant of the domain name receives a portion of the advertising revenue paid by the advertiser. Such
‘typo‐websites’ are called pay‐per‐click websites. This practice of registering domain names with either legitimate
attractive generic domains or infringing misspellings of brand names has increased to enormous proportions, and
is a key factor in the massive growth of domain name registrations globally and in China.

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Several factors make it easy and attractive for ‘domainers’ to register domain names, some legitimate, some
illegal, in China.
‘.cn’ domain names are very cheap compared to other top level domain (TLD) names. These ‘.cn’ domain
names are also relatively easy to register
‘.cn’ is divided into 34 regional TLDs such as bj.cn for Beijing and sh.cn for Shanghai and offers both Latin
and Chinese Characters
The Internet is booming in China – spending on online advertising is increasing annually
As well as the threat of ‘typosquatting’, domainers also use fraudulent, counterfeit websites that may be using
‘.cn’ domain names, websites, and email addresses that contain your brand name or variations of it. These
registrations of infringing domain names occur in many forms; correctly spelt under a regional suffix, miss‐spelt,
and in Chinese characters. These factors also make it somewhat more complicated for IPR owners to protect
themselves online in China, compared to other countries and other top level domain names.
How can a European SME protect their IP assets online and mitigate these risks?
As it can be very costly and time consuming to prosecute domain name disputes or law suits in China, it is very
important to proactively define a defensive domain name registration policy.
When creating and implementing a strategy for protecting your IPR in China, it is just as important to consider
online brand protection as it is to protect your IPR through trademarks, patents, copyright etc. It is important to
protect your company names, product names, services, and trademarks through domain name registrations
under the Chinese top level domain ‘.cn.’
The ‘.cn’ domain name regulations have four important characteristics:
They are based on a ‘first to file’ principle
Instant registrations
Low costs
Low requirements for registration documentation
China offers a fully automated domain name registration service. People or companies who wish to register a ‘.cn’
domain name can do so in only a few minutes
As opposed to trademark registrations, where third parties can object to the application of a certain trademark,
‘.cn’ domain names are registered instantly and can be used immediately following registration.
The cost of a domain name is also very low (prices range between 15 and 40 EUR) at European registrars and
there is no requirement to provide hard copy documents such as company certificates or trademark certificates
to prove a right to register the domain name. Put simply, as long as the domain name is available, anybody can
register the domain.
Strategy
Helpdesk experts recommend formulating and implementing an online brand protection strategy that is aligned
with the offline IPR and general business strategies. Consulting dedicated experts can assist you in formulate and
execute the best strategy for your company. In doing so, you should consider the following questions:

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Domain Name Strategy
• What is the purpose of registering a domain name?
o Protection of IP
o Increasing visibility (Online marketing)
o Infrastructure (emails, websites, intranet)
o Security (risk mitigation – avoid lost emails, lost traffic etc)
Domain Name Audit
• Which domains are registered – by whom?
• How are these domain names being used? (Web content, emails)
Domain Name Policy
• Which domain names and keywords should I register?
• How best to register and use the domain names?
Monitoring
• Which possibly infringing domain names are registered by third parties?
• Which websites are selling our products or eroding our brands?
Enforcement
• Should I: Recover a third party domain name? Attempt to remove an infringing website? Take legal action?
Registration process in China
One has to check if the particular ‘.cn’ domain name is available for registration. Use the ‘availability search box’
to search for the domain name you wish to register. The Chinese domain name registry China Internet Network
Information Center (CNNIC) offers this service online:
English: http://www.cnnic.cn/en/index/index.htm
Chinese: http://www.cnnic.cn/
Registration of the domain name needs to be completed through an accredited registrar. When registering a ‘.cn’
domain name one has to sign an agreement (typically online) with the registrar stating that the applicant is
accepting and complying with the China Internet Domain Name Regulations and all other general regulations.
A list of accredited international registrars can be found here:
http://www.cnnic.cn/html/Dir/2007/06/25/4671.htm
A list of Chinese registrars can be found here:
http://www.cnnic.cn/html/Dir/2007/06/05/4635.htm
Choosing a registrar:
When choosing a registrar it is recommended to use a registrar you know and trust. Although there can be a price
difference between the registrars, the risk of losing your domain name or having your domain name temporarily
deactivated, should your registrar cease business operation, should be taken into consideration.
You do not, however, have to go directly to one of the accredited registrars. In most cases your local domain
name provider will offer ‘.cn’ domain name registrations as they usually have ties with accredited registrars.

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The price of registration is typically between 15 – 40 EUR per domain name, per year. Multiple registration periods such
as 5 year registrations or 10 year registrations are also possible and may be a cheaper option.
Warning: It is worth noting that a number of Chinese Domain Name providers are trying, in bad faith, to encourage
European companies to register a number of Asian domain name extensions. These providers typically claim that they
have received a registration request from another company who wishes to register domain names that are identical
to your company name. This is a well known fraud operation known as ‘slamming’. The Chinese domain name
provider is simply trying to persuade you to register a number of domain names in order to profit from such an order.
What to do? In case you receive such an email you have four options:
1) ignore the email
2) reply to the email that you will report this email to CNNIC (the Chinese domain name registry) as ‘slamming’
and an attempt at fraudulent activity
3) forward the email to CNNIC at service@cnnic.cn
4) Register some of those domain names you may have already considered registering, through your local or
usual registrar.
How can one recover an infringing ‘.cn’ domain name?
The national domain name registry has implemented a domain name dispute policy; the ‘CNNIC Domain Name Dispute
Resolution Policy’. The cost for one domain name dispute case is approximately RMB 4000, exclusive of attorney fees.
It is recommended to seek assistance from IP Law firms ‐ either Chinese or international ‐ with expertise in domain name
disputes. The main criteria for proving a prior right to a domain name are
• the disputed domain name is identical with or confusingly similar to the complainant's name or mark in which
the Complaint has civil rights or interests;
• the disputed domain name holder has no right or legitimate interest in respect of the domain name or major
part of the domain name;
• the disputed domain name has been registered or is being used in bad faith.
Note: A domain name dispute has to be carried out within two years after the initial registration of the ‘.cn’ domain
name. After this period one has to go through the legal system, which can be a timely and costly affair.
Take away message
It is recommended not only to actively promote your business in China by using ‘.cn’ domain names, but also to protect
your IPR by defensively registering domain names as ‘.cn’. By monitoring for infringements and by enforcing rights,
companies can mitigate the majority of the global risks of online criminality in China at a reasonable cost.