.au Direct Domain Names - What you Need to Know

.au Direct is a new namespace in the Australian Domain Name System.

Traditionally, Australian domain names are made up of at least 3 elements.

For example, in the domain name yourdomain.com.au, the 3 elements are as follows:

.au Direct does away with the Second-Level Domain and instead places the unique part at this level. Instead of yourdomain.com.au, you can register the .au Direct domain name, yourdomain.au.

It is important to note that .au Direct is in addition to, and does not replace, the existing traditional domain names.

According to auDA (the organisation responsible for regulating the AU domain name space), the main reasons for releasing the .au Direct namespace are:

• shorter, more memorable, more mobile-friendly, domain names — consumers don't need to type in the ".com";
• more options and flexibility — .au Direct is an entirely new namespace which will operate in addition to traditional AU domain names;
• relaxed eligibility rules — registrants no longer need to have a connection to the specific domain name;
• brings Australian domains into line with key international jurisdictions, which already offer direct domain names under their respective country codes.

Criticisms of the .au Direct launch include the following:

• the new namespace is yet another domain name to acquire and maintain — This imposes additional costs and administrative burdens upon businesses seeking to protect their brands;
• the relaxed eligiblity rules and availability opens the scope for domain name squatting and potential cyber attacks.

Unlike some overseas domains, and the global top-level domain (gTLD) space (*.com, etc), which are open to any applicant, the .au Direct namespace requires registrants to satisfy an Australian presence test. This means that the registrant of an Australian domain must be:

• an Australian-registered organisation or business (issued with an ABN or ACN);
• an Australian citizen or resident; or
• the holder of an Australian trade mark (provided the domain name is an exact match of the trade mark).

The traditional domain names also imposed eligibility rules, effectively requirng a "close and substantial connection" between the business' name, products or services and the domain name selected. However, the connection rule is relaxed and does not apply to .au Direct.

An important implication of the relaxed eligibility rules is that anyone who satisfies the Australian presence test can register any .au Direct domain name, regardless of whether there is a connection between their business and the domain name.

The following key dates and times apply to the launch of the .au Direct Namespace:

To manage competing entitlements to .au Direct domain names, auDA implemented a Priority Allocation Process.

During the sunrise period (between 24 March 2022 and 20 September 2022), all .au Direct domains with a corresponding traditional Australian domain were placed into "Priority Hold" status, pending receipt of claims from existing domain name holders.

The Priority Hold domains can only be registered to an eligible claimant during the sunrise period. Unclaimed Priority Hold domains are released to general public availability from 3 October 2022 (UTC).

No Competing Claimants

If there is only 1 eligible claimant, the Priority Hold domain name can be immediately claimed by that claimant during the sunrise period.

Competing Claimants

Where there are 2 or more competing eligible claimants, the auDA Priority Allocation Process is invoked.

First, the claimants are assigned a Priority Category, based on the date of registration of their corresponding traditional domain.

Where there are multiple claimants, priority is determined between each of the categories as follows. Note that each Claimant must also remain eligible to hold the domain name.

Once the Allocation Process is resolved, the winning claimant will be entitled to registration of the domain name. If the winner's claim is not ultimately completed, then the domain name falls back to general public availability.

At the General Public Availability Date (Tue 4 Oct 2022 07:00 AEST), any unclaimed .au Direct domain names will be come available to the general public.

Importantly, this means that any organisation or individual that satisfies the Australian Presence Test will be able to register an unclaimed .au Direct domain name.

This risk to businesses is that an unscrupulous operator could register the corresponding .au Direct domain name, with the intent to:

• monetise the domain name — for example, running paid advertisements under the corresponding .au Direct domain name
• cybersquatting — attempting to resell the domain name to the holder of the original domain at potentially inflated prices (although this practice may be against auDA Licensing Rules)
• pass-off as the original business — For example: users who are unfamiliar with .au Direct domain names could easily mistake the .au domain for the original .com.au domain name
• engage in criminal or cyberthreat activities — such as website cloning and impersonation, or email address spoofing

If another person or organisation successfully registers the .au Direct domain name that corresponds to an existing traditional Australian domain name, there are a few avenues that might be explored, including:

• Direct negotiations with the .au Direct registrant — which might include an offer to purchase the domain name
• Raising an Eligibility Complaint under the auDA Licensing Rules — however, given auDA's eligilibity rules for .au Direct are more relaxed, this strategy may be unlikely to succeed if the registrant satisfies the Australian Presence Test.
• Raising a Domain Name Dispute under the auDRP — to succeed, the complainant would need to satisfy the grounds under the auDRP.
• Court proceedings based on trade mark infringement (if the complainant holds a registered Australian trade mark), passing-off or misleading and deceptive conduct in contravention of the Australian Consumer Law

It should be noted that in most - if not all - cases, the legal costs to formally dispute or recover a domain name once taken would outweigh the intial cost of registering the domain name. We would recommend obtaining appropriate legal advice before embarking upon a domain name dispute process.