JPNIC Rethinks Weird Domain Name Rules

Back to Contents of Issue: August 2000
by Daniel Scuka
There's at least one thing you can neither buy nor sell in Japan: an Internet domain name. Thanks to the policies of the Japan Network Information Center (www.nic.ad.jp), only the original registrant can hold a particular domain, and it cannot be bought, sold, or otherwise transferred. "To their credit, JPNIC is trying to do the right thing -- they're trying to prevent cybersquatting," says David J. Kappos, an intellectual property attorney who co-chairs Tokyo's American Chamber of Commerce Intellectual Property Committee.

JPNIC has a few more odd rules up its sleeve: a corporation cannot hold more than one upper-level .co.jp domain. Sony, then, can forget about vaio.co.jp and playstation2.co.jp. And, especially galling to foreign companies, JPNIC restricts .co.jp registrations to corporate entities registered in Japan. Your overseas incorporation just won't cut the wasabi with JPNIC (though that is, maddeningly enough, otherwise adequate for doing business in this country).

However well intentioned these policies are, they've led to some bizarre practices in real life. For example, cybersquatters simply set up shell companies, register a domain name under it, and then sell the company to the highest bidder. "They get to make more money, because when you go to buy your name back, you've got to buy the shell company and the name, so it's even more expensive," Kappos says.

One Kafkaesque result of this is that business opportunities have arisen for brokers who will serve as your registered local representative office and hold your .co.jp domain name for you until you are ready to launch in Japan (see the Venture item in Investor).

Acting through the ACCJ, Kappos has urged JPNIC to reform its domain name policies. Among the recommendations: Japan should take legislative action to deter cybersquatters (as the US Congress recently did with speedy, bipartisan support); JPNIC should immediately nullify the rule prohibiting transferring domain names, the one restricting domain names to one per company, and the one requiring a registered Japan presence; and JPNIC should establish a simple procedure by which trademark owners can block the registration of their trademarks by others.

"If the rules are changed the way we are proposing," Kappos says, "a .co.jp domain name registrant could be located anywhere, the same as for US domain name registrants." Kappos thinks a line to the effect of You agree to accept jurisdiction and application of the laws of Japan if a dispute should arise relating to your activities in Japan would answer the concerns of those who want registrants to be accountable in Japan for their online activities.

"I understand JPNIC is already considering making some of the changes we're asking for," Kappos says. "Eventually they'll change, but we're hoping we can speed this up."

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