.cyou New gTLD Application

Beijing Gamease Age Digital Technology Co., Ltd.

2/F,East tower of Jing Yan Hotel, No. 29 Shijingshan Road, Shijingshan District Beijing - 100043 CN

+86 010 68613344

+86 010 68864315

http://www.changyou.com/

Qing Peng

Business Manager

 

+86 010 64242299 8108

 

Fan Yang

Business Manager

 

+86 010 68613344

 

Limited Liability Company

Beijing, China

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Cyou

Beijing Gamease Age Digital Technology Co., Ltd. anticipates the introduction of this TLD without operational or rendering problems. Based on a decade of experience launching and operating new TLDs, Afilias, the back-end provider of registry services for this TLD, is confident the launch and operation of this TLD presents no known challenges. The rationale for this opinion includes:
- The string is not complex and is represented in standard ASCII characters and follows relevant technical, operational and policy standards;
- The string length is within lengths currently supported in the root and by ubiquitous Internet programs such as web browsers and mail applications;
- There are no new standards required for the introduction of this TLD;
- No onerous requirements are being made on registrars, registrants or Internet users, and;
- The existing secure, stable and reliable Afilias SRS, DNS, WHOIS and supporting systems and staff are amply provisioned and prepared to meet the needs of this TLD.

The intention of the Beijing Gamease Age Digital Technology Co., Ltd. (“Cyou”) in filing this application is to proactively protect the ownership of the “Changyou.com” and “Cyou.com” trademark at the Internet Generic Top-Level Domain (gTLD) name space and to provide a trusted, hierarchical and intuitive namespace for registrants and users that use Cyou’s broad range of high-quality entertainment and virtual communities services.

Beijing Gamease Age Digital Technology Co., Ltd. (“Cyou”)

Beijing Gamease Age Digital Technology Co., Ltd. (“Cyou” ; NASDAQ: CYOU for changyou.com limited) is a leading developer and operator of online games in China. Cyou began its operations as a business unit within Sohu.com Inc. (“Sohu”, NASDAQ: SOHU) in 2003 before carving out as a separate, stand-alone company in December 2007 and subsequent listing on the NASDAQ Global Select Market in April 2009. We now operate one of the most popular Massive multiplayer online game (“ MMOGs”) in China, and have enjoyed strong growth in user data and revenues for our games. Currently, Cyou are also operating many games like “LuDingJI”,”GuYu”, “DaoJianYingXiong”, “JiuDingChuanShuo”,”DaHuaShuiHu”, “DongHaiQiTan”, “JianXian”, “MengShuiTang”, “ShengShiShanGuo”, “TianZhiRen”. In addition, multiple games like “ZhanDiFengYun OL” “TaoYuan” are under test.
We engage in the development, operation and licensing of online games, including MMOGs, which are interactive online games that may be played simultaneously by hundreds of thousands of game players, and Web-based games, which are played over the Internet using a Web browser. We also own and operate the 17173.com Website, the largest game information portal in China that has an experienced team with strong expertise in running the website and building a game community and developing relationships with advertisers in the online game industry.
We have a leading in-house technology platform that includes our advanced 2.5D and 3D graphics engine, a uniform game development platform, effective anti-fraud and anti-hacking technologies, proprietary cross-networking technology and advanced data protection technology. Our product development team and game operations team work closely together to translate game player feedback into game updates and expansion packs. Our close relationship with Sohu provides us with unique competitive advantages and we have benefited from Sohu’s strong brand recognition in China and it’s large user base and its quality advertising resources. Sohu’s trusted brand name and resources in China provides us with a broad marketing reach, Cyou now has grown up as an individual large platform and its registered users of Cyou platform have reached 175.7 million according to the Q4 of 2011 annual report with 117 million of concurrent users（PCU）and 317 million active account paying (APA).
Our award-winning, in-house developed game, Tian Long Ba Bu, or TLBB, has been instrumental in our success. Adapted from the popular Chinese martial arts novel of the same name, which in English means ʺNovel of Eight Demigods,ʺ TLBB is a 2.5D martial arts-style fighting and community-building MMORPG. TLBB has won various awards in China, including 2008 “Best Self-Developed Online Games (First Place)” and 2008 and 2009 “Most Favorite Online Games by Game Players (First Place)” awards at the China Digital Entertainment Expo and Conference, or ChinaJoy. Its expansion packs, TLBB2 and TLBB3, won the 2010 “Most Favorite Online Games by Game Players” award and the 2011 “Best Self-Developed Online Games” award, respectively, at ChinaJoy. To leverage the success of TLBB, we licensed the game to third-party operators overseas. TLBB is currently licensed to third-party operators in Vietnam, Taiwan, Hong Kong, Malaysia and Thailand. We also operate a modified version of TLBB in the U.S. and certain European countries. Tianlongbabu (TLBB) has published 23 big expansions within the five years after the open beta in May 2007, the peak of concurrent users have over 1 million in Q2 of 2011, ,which is a great performance in Chinese MMOG market
Our Web-based game DDTank was developed in-house by our VIE 7Road and is a popular Q-style multi-player Web-based shooting game in China that has won various game awards. Players use keyboards to control tanks to compete with others, using different weapons to produce different firing effects. Since DDTank’s launch, we have regularly developed new content and released new versions of the game. DDTank is currently licensed to third-party operators in China, Vietnam, Malaysia, Taiwan, and Brazil. DDTank’s 2.4 version won the 2010 “Most Liked Web-based Games by Game Players” award at ChinaJoy.
Cyou intends to file this application for trademark protection purpose. The trademark ownership of “Changyou.com” and “Cyou.com” have been acquired by Cyou since 2010. The approach was to secure the 2nd-level domain name protection on popular .COM name space. Preserving .Cyou Top-Level Domain resources for its existing and future businesses is critically important for us. As a reference, the following registered trademarks have been under Cyou’s management:
The following trademark portfolio is the inseparable part of CYOU’s businesses. It represents the past and on-going effort made by Alipay on intellectual property asset protection relating to the “CYOU” brand.

Cyou in connection with the following China national trademark registrations: 6636091，6636095，6636098，6636104，6636109，6636116，6636120，6636071，6859342，6859344，6859348，6859353，6859365，6859362，6859366，6859373，6859382，7798644，7798660，7798683，6636072，6636081，6636092，6636096，6636099，6636107，6636117，6636122，6636127 and the international trademark registrations in USA 3804327 as well as registration in EU 009083692.

Potential Business Models


Cyou is still analyzing potential use case options on the type of domain names that will be permitted to be registered and by whom. The best current thinking is to initially allow only a limited number of Corporate Internal Users (CIU) to apply ⁄ register limited number of second level .Cyou domain names. Besides Beijing Gamease Age Digital Technology Co., Ltd. itself, a CIU may be a representative of an entity (registrant) and the entity is wholly owned or affiliated with the Beijing Gamease Age Digital Technology Co., Ltd. This conservative approach shall meets the pre-defined trademark protection purpose and minimize potential technological, marketing and operational risks. Such approach is subject to change depending upon on a range of external factors, will be reviewed at the regular basis. A consultative process with ICANN and relevant stakeholder shall take place prior to determination of any change of this approach. Most likely, Cyou will not make any such determination until after the first three years of operation.

Cyou believes that the proposed .Cyou gTLD has the potential to offer the following benefits to Internet users and consumers:

1. Committed to providing high-quality entertainment and virtual communities to game players with the elevated level of user confidence at the top-level;
2.Provide intuitive and memorable domain names that will facilitate the ease by which consumers can locate information online;


What is the goal of your proposed gTLD in terms of areas of specialty, service levels, or reputation?

While Cyou’s intention of filing this application is to proactively protect this ownership of the “Cyou” trademark at the Internet Generic Top-Level Domain (gTLD) name space, and to provide a trusted, hierarchical and intuitive namespace for game players that use Cyou’s broad range of high-quality entertainment and virtual communities service, it is also important to recognize Cyou’s strong expertise in running the Website, building a game community and developing relationships with advertisers in the online game industry. The Cyou gTLD registry service will be built on top of that corporate expertise and experience.

What do you anticipate your proposed gTLD will add to the current space, in terms of competition, differentiation, or innovation?

As a brand gTLD, the primary driving factors of Cyou are providing a high-quality entertainment and virtual communities service for its customers. The success of this gTLD will not be measured by the number of domain name registered. Instead it will be measured by the level of consumer recognition and trust that is placed place in .Cyou gTLD. Using this benchmark, Cyou strives to build consumer recognition and trust that rise to the level of that found in the .EDU and .GOV.CN domain names.

Cyou would like to establish one of the most powerful online game brands in China, relying upon emerging Internet technologies and domain name system to deliver services to its consumers both domestically and abroad, therefore, which enable it to compete effectively and to capitalize on the rapid growth in the online game market. Cyou shall elevate its existing market leadership to another level. However, any broader adoption of this competitive advantage will only be undertaken after Cyou has confidence that the concerns of various government and law enforcement regarding ICANN’s new gTLD process are properly addressed to its satisfaction. This evaluation is specifically reference in Section 18a.

While many customers of game playing service websites are subject to a never ending barrage of spam and phishing activities, Cyou from day one will be a trusted source for consumer looking for online game regarding Cyou services.

What goals does your proposed gTLD have in terms of user experience?

Cyou believes that the .Cyou gTLD will provide an enhanced experience for the hundreds of millions of consumers both domestically and internationally that uses online game services. This will increase confidence, predictability for new customers and partners as Cyou continues to expand into other markets around the world as a leading global online marketplace platform.

In addition to providing consumers with shorter, memorable, and intuitive domain names to help customer navigate the website, Cyou envisions best in class safeguards to minimize any potential phishing, pharming, or spamming that have plagued the customers of other entertainment and virtual communities service providers.


Provide a complete description of the applicant’s intended registration policies in support of the goals listed above.

As documented in Section 18a, during the first three years of operation, Cyou is intending to restrict registration and use of domain names with the gTLD to limited number of CIU. Because of this condition precedent, any registration and use requirements are more appropriately vested in these corporate⁄subsidiary agreements and not in a domain name registration agreement. Cyou mark is a valuable brand whose protection is of paramount important, any registration and use (e.g. trademark quality control provisions) must vest in these other agreements.
Aside from these concerns, Cyou will incorporate all required ICANN consensus policies and other legal⁄policy requirements imposed on new gTLD applicants into the terms and conditions of the domain name registration agreement. Based on ICANN Registry Agreement, Cyou sets and enforces .Cyou registration policies. General Registry Policies will be developed and made available prior to launch of TLD. Such policy decisions, based on ICANN Registry Agreement and relevant industry best practices, include but are not limited to:
• Registration eligibility requirements
• Which registrars may become accredited and sell domains
• Wholesale prices offered to registrars
• Reserved names
• Phased allocation (Sunrise, Landush, etc.) of the domain space at the second and third levels
• Dispute policies
• Technical policies, including SRS security and access.
This .Cyou General Registry Policies pertain techno-operational policies in the following areas:
1. Domain Registrations (Domain Objects) and the .Cyou Zone File
2. Domain Contacts (Contact Objects) and WHOIS Service
3. Dispute Resolution Policies
4. Obligations of Registered Name Holders
The General Registry Policies provides the framework for the general operations of the .Cyou Registry. Other policies, such as the .Cyou Eligibility, Reserved Name Policies, Sunrise Policies and other relevant policies are described separately in other documents published at the .Cyou TLD registry Websites. Pricing and technical specifications are published for Accredited Registrars only and provided separately.
The .Cyou TLD registry is committed to maintaining the integrity of the data within the .Cyou Registry and to implement policies that deter infringements. The .Cyou Registry adopts the Uniform Domain Name Dispute Resolution Policy (UDRP) for facilitating the resolution of disputes over the registration and use of a second-level domain name registered under the .Cyou Registry. All domain name registrations must submit to the mandatory proceedings commenced under UDRP, which is available for review at http:⁄⁄www.icann.org⁄dndr⁄udrp⁄policy.htm. Complaints under the UDRP should be submitted to an approved dispute-resolution service provider listed at http:⁄⁄www.icann.org⁄dndr⁄udrp⁄approved-providers.htm.
Beyond the UDRP, all domain registrations must also submit to proceedings commenced under formally adopted dispute policies as set forth by Cyou from time to time and published on the .Cyou Website(s). Such dispute policies will take effect at the time they are announced on the .Cyou TLD registry Website(s), with or without prior notice to registrars or registrants.
Such dispute policies may include for example, but not limited to, expedited processes for suspension of a domain name by claims sought by intellectual property right holders (URS), Internet engineering and security experts or other competent claimants in the purpose of upholding the stability, security and integrity of the .Cyou Registry. Dispute policies may also include for example challenge processes adopted by the .Cyou Registry for special programs when occurred.
Moreover, based upon Cyou’s commitment and established track record in providing a safe eco-system for businesses and individuals, Cyou intends to provide best in class safeguards that will evolve over time.

Will your proposed gTLD impose any measures for protecting the privacy or confidential information of registrants or users? If so, please describe any such measures.

As a global leading company, .Cyou recognizes first hand that this is an evolving area of law in which there is no international standard. However, due to fact that every domain name will initially be registered to Cyou or a CIU, Cyou has a vested interest to make sure that accurate and current domain name information is readily available in connection with each .Cyou domain name.

Because the proposed business model set forth in Section 18a envisions a potential expanded use of .Cyou domain names to non-corporate registrants at much later time, Cyou has a vested interest to make sure that accurate and current domain name information is readily available in connection with each domain name. If individuals or companies are eventually permitted to register domain names in the .Cyou gTLD, Cyou will re-evaluate its policies at that time to ensure that its policies are in compliance with best-in-class policies at that time.

Describe whether and in what ways outreach and communications will help to achieve your projected benefits.

As noted above Cyou’s driving factor in securing a .Cyou gTLD in ICANN’s first round is primarily defensive in nature, and while Cyou sees the potential for this gTLD to serve as a cornerstone for its future online strategic initiative, there are a number of unanswered questions concerning consumer recognition, security and stability and broader industry adoption of new gTLDs within the marketplace that must be satisfactorily answered first. Once these concerns have been answered to Cyou’s satisfaction, Cyou is committed to making prominent use of the .Cyou gTLD in printed and online material as well as across its wholly-owned and affiliated entities. As leading global online game services company, Cyou currently spends over 100 million RMB annually in marketing and advertising.

What operating rules will you adopt to eliminate or minimize social costs (e.g., time or financial resource costs, as well as various types of consumer vulnerabilities)?

Cyou believes the proposed approach to initially limit registration to Cyou and the CIU (see Section 18a) will provide a trusted online environment for consumers of Cyou’s services. Therefore there is no need for other trademark and brand owners to defensive register in the gTLD. This verified eco-system also provides consumers with a single trusted source for Cyou with a substantially lower risk of fraud and or scams for its customers. Cyou also believes that the safeguards set forth in the Applicant Guidebook and the proposed business modeled outlined in Section 18a will minimize and potential negative social costs.

What other steps will you take to minimize negative consequences⁄costs imposed upon consumers?

Cyou believes that the proposed operation of the .Cyou gTLD as set forth in this application has no known negative consequences or cost implications on consumers. To the contrary, the proposed operation of this registry will likely lead to direct and quantifiable benefits to consumers. Cyou believes that by following the core corporate values as identified in Section 18b, it will be able provide real value to consumer, and minimize any potential negative consequences⁄costs.

How will multiple applications for a particular domain name be resolved, for example, by auction or on a first-come⁄first-serve basis?

Cyou does not envision multiple applicants for the same domain name, as domain names will initially only be allocated to Cyou and its corporate subsidiaries and affiliated entities. If and when Cyou decides to permit third party registrations within the gTLD, Cyou will evaluate and decide upon a best in class allocation mechanism consistent with its strategic corporate interests.


Explain any cost benefits for registrants you intend to implement (e.g., advantageous pricing, introductory discounts, bulk registration discounts).

Cyou does not envision any pricing, introductory discounts, bulk registration discounts because these marketing⁄commercial initiatives are inconsistent with the mission and purpose of the .Cyou gTLD as a trusted online source identifier. Moreover, it is the current best thinking of Cyou that .Cyou domain name registrations will be provided to Cyou and its CIU at no-cost.

Note that the Registry Agreement requires that registrars be offered the option to obtain initial domain name registrations for periods of one to ten years at the discretion of the registrar, but no greater than ten years. Additionally, the Registry Agreement requires advance written notice of price increases. Do you intend to make contractual commitments to registrants regarding the magnitude of price escalation? If so, please describe your plans.

Cyou is committed to providing the domain name registration periods set forth in the registry agreement. However, as noted above as .brand gTLD the registration and use of the domain name is conditioned upon the registrant being Cyou itself or its CIU. Therefore providing contractual commitments in a domain name registrant agreement regarding the magnitude of price escalations does not seem relevant or appropriate. Additionally, as noted above, the current best thinking of Cyou that .Cyou domain name registrations will be provided to Cyou and its CIU at no-cost.