On 28 March 2018, the European Commission’s (EC) Directorate-General for Communications Networks, Content and Technology released an important notice to stakeholders (the “Notice”) on the impact of Brexit on. EU domain names.  The EC’s Notice highlighted that the EU regulatory framework for the .EU country code Top Level Domain (ccTLD) will cease to apply to the UK as from the UK’s withdrawal date from the European Union, which is set for 30 March 2019, unless a ratified withdrawal agreement establishes a later date.  As a result, UK individuals or entities that do not fulfil the eligibility requirement for registering .EU domain names as of the withdrawal date will no longer be able to register new or renew existing .EU domain names, and may also have their existing .EU domain name registrations revoked by EURid.

EURid is the .EU Registry that has managed the .EU ccTLD since its appointment by the European Commission in 2003, in accordance with the EU regulatory framework.  The EU regulatory framework for .EU domain names consists mainly of the following: (i) Regulation (EC) No. 733/2002 of the European Parliament and of the Council of 22 April 2002 on the implementation of the .EU Top Level Domain, (ii) Commission Regulation (EC) No. 874/2004 of 28 April 2004 laying down public policy rules concerning the implementation and functions of the .EU Top Level Domain and the principles governing registration and (iii) Commission implementing Decision of 11 April 2014 on the designation of the .EU Top Level Domain Registry.

The eligibility requirements for registering .EU domain names are set out in article 4(2)(b) of Regulation (EC) No. 733/2002 of the European Parliament and of the Council of 22 April 2002 on the implementation of the .EU Top Level Domain.  Pursuant to this provision, the following persons are eligible to register .EU domain names: (i) undertakings having their registered office, central administration or principal place of business within the EU, or (ii) organisations established within the EU without prejudice to the application of national law, or (iii) natural persons residing within the EU.   It should be noted that EURid’s Domain Name Registration Policy extends eligibility requirements for .EU domain names to residents of, or entities established in, Norway, Iceland and Liechtenstein.

There are four major consequences of Brexit on .EU domain names, as highlighted in the EC’s Notice:

1. Registration and renewal of .EU domain names.  The EU’s Notice expressly provides that “as of the withdrawal date, undertakings and organisations that are established in the United Kingdom but not in the EU and natural persons who reside in the United Kingdom will no longer be eligible to register .EU domain names or, if they are .EU registrants, to renew .EU domain names registered before the withdrawal date”.  The EU’s Notice also stressed that .EU registrars will not be entitled to process any registration or renewal requests of .EU domain names by those undertakings, organisations and persons.
2. Revocation of registered .EU domain names.  If UK individuals or entities holding a .EU domain name no longer fulfil the eligibility requirements for registering .EU domain names in accordance with article 4(2)(b) of Regulation (EC) No. 733/2002, EURid will be entitled to revoke such domain names “on its own initiative and without submitting the dispute to any extrajudicial settlement of conflicts”  in accordance with article 20(b) of the Commission Regulation (EC) No. 874/2004.  This is a major consequence as there are over 300,000 .EU domain names owned by registrants based in the United Kingdom.
3. Rights that can be invoked in .EU domain name dispute proceedings.  .EU domain names may be revoked by extra-judicial or judicial procedures, in accordance with article 21 of Commission Regulation (EC) No. 874/2004 of 28 April 2004.  A party may obtain the transfer or cancellation of a .EU domain name pursuant to the .EU Alternative Dispute Resolution Rules (the “ADR Rules”).  To obtain the transfer or cancellation of a .EU domain name, a complainant must demonstrate that: (a) the disputed domain name is identical or confusingly similar to a name in respect of which a right is recognised or established by the national law of a Member State and/or EU law and; either (b) the disputed domain name has been registered by the respondent without rights or legitimate interest in the name; or (c) the disputed domain name has been registered or is being used in bad faith.However, as of the withdrawal date, a party seeking to revoke a .EU domain name in accordance with article 21 of the Commission Regulation (EC) No. 874/2004 of 28 April 2004, will no longer be able to rely on rights recognised or established by the United Kingdom but not by EU Member States or by the European Union.  However, the EC Notice stresses that rights arising from international treaties, such as the Paris Convention or the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS), will not be affected.
4. Applicable law in agreements between accredited .EU registrars and .EU domain name registrants.  Article 5 of Commission Regulation (EC) No 874/2004 provides that agreements between the Registrar and a .EU domain name registrant cannot designate, as applicable law, a law other than the law of an EU Member State, nor can they designate a dispute-resolution body, unless selected by EURid, the .EU Registry, pursuant to article 23 of that Regulation, nor an arbitration court or a court located outside the EU.  The EC’s Notice provides that, as of the withdrawal date, should any such agreement designate as applicable law the law of the United Kingdom, the Registrar and concerned domain name registrant are advised to amend the relevant agreement in accordance with the law of a Member State.

The EC’s notice, however, highlighted that the aforementioned consequences are “subject to any transitional arrangement that may be contained in a possible withdrawal agreement”.  Negotiations between the UK and the EU with a view of a reaching a withdrawal agreement are currently ongoing.

The .EU ccTLD is the 8^th largest ccTLD, with approximately
3.8 million domain name registrations (as of December 2017), as reported by Verisign’s Domain Name Industry Brief.  Almost 10% (over 300,000) of .EU domain name registrations are held by UK individuals or entities.

.EU is not the only extension that imposes residency requirement within the EU as part of the eligibility requirements for domain name registration.  There are a handful of other ccTLDs that do so, including .FR (France), .IT (Italy) and .HU (Hungary).  Thus, given the current climate of uncertainty, UK-based individuals and/or entities are well advised to identify those domain name registrations in their portfolio which require EU residency and transfer them to a subsidiary or agent within the European Union in order to minimise the risk of having their domain name registrations revoked.

The European Commission’s “Notice to stakeholders: withdrawal of the United Kingdom and EU rules on .eu domain names” is available here.

First published on Anchovy News: Anchovy® is our comprehensive and centralised online brand protection service for global domain name strategy, including new gTLDs together with portfolio management and global enforcement using a unique and exclusive online platform developed in-house.

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