Client Alert - Internet Keywords and Wireless Keywords in Mainland China (PRC)
The awkwardness of many website addresses has caused the development of Keyword systems. These permit you to enter one word to link to a specific website. One example in the United States is the Keyword system adopted by America On Line. Keyword Systems also exist in Korea, Taiwan and Thailand. They offer the convenience of allowing a user to enter a simple word in the language with which the user is most familiar.
Internet Keywords in China
CNNIC. In China, the China Network Information Center (called CNNIC) registers Internet Keywords. These are simplified ways for Chinese Internet users to go to a website by just typing the Keyword (which may be in English or in Chinese characters) into an Internet browser on a computer rather than typing the entire URL address for that website. CNNICâ€™s English website is at www.cnnic.cn/en/index/index.htm.
3721. There is a competing Chinese Internet Keyword system run by a company named Beijing 3721 Technology Co. Ltd. (called 3721), which launched its Internet Keyword system in June 1999, much earlier than CNNIC. 3721 derived its name from a Chinese proverb, â€œAs easy as 3 x 7 = 21.â€ Its Internet Keyword system is reported to be more popular in China with over 80% of the market share of Internet Keywords reaching over 90% of Chinese Internet users. Yet, it is virtually unknown outside China even though it was acquired by Yahoo! in 2003. 3721â€™s English website is at www.3721.com.
Wireless Keywords in China
Starting in 2006, CNNIC began to register Wireless Keywords. These are simplified ways for Chinese mobile phone and other mobile device users to go to a website or reach another instant messaging user by typing the Wireless Keyword (which also may be in English or in Chinese characters) into a mobile device.
3721 at one time had a Wireless Keyword registration system but has discontinued it because there were few Chinese users of mobile devices. So only CNNIC offers Wireless Keywords.
The official charge for registering an Internet or Wireless Keyword is reported to be about as follows:
- CNNIC: US$ 2,600 for 10 years (but generic keywords cannot be registered for more than 2 years).
- 3721 charges, only for Internet Keywords, of course:
|Specific Keyword (unique to one organization)||US$ 115/year (US$ 1,150 for 10 years)|
|Generic Keyword (product category or industry)||US$ 1,300/year (US$ 13,000 for 10 years)|
Some U.S. companies have received messages from Chinese companies claiming to be keyword registrars authorized by CNNIC. These messages state that someone in China has applied to register an Internet Keyword or a Wireless Keyword incorporating the U.S. companyâ€™s name or trademark. The sender goes on to say that it has found that the U.S. company owns that name or mark, and that if the U.S. company does not itself register the Keyword, the sender will allow the Chinese company to do so.
We have been told that the underlying reason why these unsolicited emails are being generated is that CNNIC is encouraging its accredited registrars to sell Keywords by offering them big rebates. This has resulted in CNNICâ€™s registrars making engineered threats regarding allegedly pirated Keywords to solicit business.
Some U.S. companies have investigated the threats and have reportedly been unable to corroborate them. Accordingly, some U.S. companies have chosen to ignore the threats, while others have decided to register the Keywords as a defensive measure.
There is no published directory of Internet Keywords or Wireless Keywords. However, it is possible to monitor Keywords that exactly use a trademark through the Whois Search Systems of both the CNNIC and 3721. However, if an additional word is added to the Keyword, that variation would have to be separately searched. The cost for monitoring each Keyword in both systems would total about US$ 600 per year.
If someone other than the trademark owner registers a Keyword, the owner may either file an arbitration to get the Keyword transferred to it or commence a court action for unfair competition.
CNNIC Internet Keyword arbitrations may be filed with the Domain Name Dispute Resolution Center under the China International Economic and Trade Arbitration Commission (DNDRC under CIETAC) or the Hong Kong International Arbitration Committee (HKIACC). CNNIC Wireless Keywords may only be filed with the DNDRC under CIETAC.
3721 Internet Keyword arbitrations may be filed with the Beijing Arbitration Committee.
Since March 17, 2006, there has been a two year time limit in which to commence disputes concerning domain names ending in <.cn>. However, an arbitration or court action concerning a Keyword can be filed at any time without limit.
For arbitrations, we understand that the estimated cost (including official fee and professional charges by Chinese counsel) would be about :
- US$ 3,200 for CNNIC Internet Keywords
- US$ 3,400 for 3721 Internet Keywords
- No schedule exists for CNNIC Wireless Keywords
The cost for a court action is estimated to be between US$ 6,000 and $12,000, depending on the difficulty of the case.
Registration. As is true of domain names, the least costly way of protecting a Chinese Keyword that you may want to use would be to register it yourself. If you choose to do so with one of these companies, 3721 may be the better choice. We have been advised that registration with 3721 provides sufficient coverage. But if you do not intend to sell goods to Chinese customers over the Internet or through handheld devices, then you may decide to forego Keywords registrations. Moreover, the ease of finding desired websites using Internet search engines instead of specific website URLs may reduce the utility of the Keyword systems.
Monitoring. There are so many possible variations in Keywords, and monitoring is so specific, that it does not seem practical to monitor Chinese Keywords.
Actions. If a Keyword embodying your trademark is registered in China by a cybersquatter who puts it to use, you can consider bringing an arbitration or court action at that time.