Cybersquatting & Regulatory Mechanisms

Cyber Squatting is a word that has come to be linked with the registration of domain names without the objective of using them, in the names of popular brands or personalities exclusively for the purpose of making money. The crux is that “name” belongs more appropriately to another entity. Secondly, the registrant is targeting to trade the name.

cyber crimeDomain name registration method commenced on the basis of the “First come First serve” basis. The registrant authority did not take the accountability for examining the possession/owner of the name. Later when the internet became trendy, large popular businesses wanted to enter the internet with their own websites and regularly found that the domain name they were looking for had already been booked. So, businesses who wanted the same domain name had to pay a price, which was many times mind-boggling.

This growing cost of buying back domain names resulted in a ‘Meta society’ trademark owners coming together and asserting that their intellectual property rights on a registered trade mark should be extended to “domain name”. This has developed in considering “Registration of Domain Names without the intent of using them” as cybersquatting.

In order to prevent cybersquatting, some countries have imposed somewhat arbitrary restrictions on domain name use such as limitations on the choice of the domain name to match the registrant company’s name or to contain no general terms. Some countries have enforced restrictions on the number of domains that a registrant can own, making it difficult for businesses to register multiple brands. This may present a problem for many US corporations that own hundreds of brand names. The United States of America has the “Anti-Cyber Piracy Act” to outline the rights on domain names.

In the absenteeism of any law, clashes regarding domain names are fixed through the uniform Disputes Resolution Mechanism that the registrants have agreed to practice. The WIPO has been supportive of the Dispute Resolution based on “Trade Mark Rights”. Disputes are largely decided through an “Arbitration Process”.

Indian locus:

  • In India, certain cases have been decided like Yahoo Inc V/s Akash Arora. In this case, the plaintiff, who is the registered owner of the domain name ‘Yahoo.com’ accomplished in procuring an interim order restraining the defendants and agents from dealing in service or goods on the internet or elsewhere under the domain name “Yahooindia.com” or any other trademark/domain names which are deceivingly similar to the plaintiff’s trademark “Yahoo”.
  • In Rediff Communication Limited V/s Cyberbooth. The Bombay High Court has said that the internet domain names are of significance and are a valued corporate advantage. A domain name is more than an internet address and is allowed for safeguard as a trademark. The development and growth in technology and the service has rendered internet sites also to come to be recognized and accepted and are being given defense so as to safeguard such providers from passing off the services rendered by others as his service.

Cyber Squatting

Cybersquatting is elucidated as “an act of procuring fraudulent registration with an intention to sell the domain name to the lawful owner of the name at a hefty price”. The court in Manish Vij v. IndrChugh and The Satyam Infoway Ltd v. Sifynet Solutions (P) Ltd case pinned the Indian domain name situation way back in 2004 stating that-“As far as India is concerned there is no legislation which openly refers to dispute resolution in connection with domain names. But though the operation of the Trade Marks Act, 1999 itself is not extraterritorial and may not allow for sufficient protection of domain names, this does not mean that domain names are not to be legally protected to the grade possible under the laws pertaining to passing off. The recent way is Reverse Domain Name Hijacking where an attempt is made by a trademark holder to acquire a domain name from a legitimate user by making false cybersquatting allegations against him.

The Information Technology Act, 2000 of India along with The Information Technology (Amendment) Act 2008 addresses many cyber crimes and has set up a special cyber crimes cell. However, the Act oddly overlooks the problem of domain name disputes and cybersquatting. In the case of cybersquatting domain names may be reflected as trademarks based on use and brand repute and so fall under the Trade Marks Act, 1999. However, not all domain names are trademarks.

Other than the aforementioned civil remedies, conferring to Section 135 of the Indian Trade Marks Act, 1999 legal remedies for cases for infringement of registered trade mark or passing off includes an injunction, damages, or account of profits or delivery up of infringing goods or damage of infringing goods. Section 103 enforces punishment for applying false trademarks or trade descriptions and Section 104 enforces punishment for selling goods or services bearing a false trademark or description, (in both cases) which is punishable with imprisonment for a term not less than six months and may extend to three years and with fine, not less than Rs. 50,000 which may extend to Rs. 2 Lakhs. The Copyright Act, 1957 is implored at times, and raids conducted, however, domain name offenses are still struggling for legislative clarity.

The common law remedying of passing off is available to the possessor of the trade mark but in case his mark is registered, he can file an action for infringement of trade mark. Plentiful cases including that of Yahoo, Rediff, and Satyam have laid down the subsequent guidelines-

  1. The defendant should have sold/ offered its goods/ services in a manner that cheats the public into perceiving that the goods/ services of the defendant are in fact the plaintiffs.
  2. Misrepresentation by the defendant to the public should be proven.
  3. The loss/likelihood of it should be proven.

In the above-mentioned Satyam case, the appellant registered multiple domain names like www.sify.net, www.sifymall.com, etc. in June 1999 through ICANN and WIPO, based on the word “Sify”, created using features of its corporate name, Satyam Infoway, which earned a wide prominence. The respondent registered www.siffynet.net and www.siffynet.com with ICANN is 2001 and 2002 congruently as it carried on the business of internet marketing. On the respondent’s claim to the appellant towards the transfer of the domain name failing, the City Civil Court gave a temporary injunction against the respondent on the ground that the appellant was the prior user of the trade name “Sify” which had built up enough goodwill over the time in relation to the internet and computer services.

On appeal, the Hon’ble High Court said that the balance of convenience between both the parties should be considered and the respondent had financed huge sums of money in the business. It held that customers would not be misled or confused between the two parties as the two businesses were altogether very different.

On another appeal, the Supreme Court found that both the lower courts agreed on the principles of passing off actions in connection with trademarks being appropriate to domain names. The Supreme Court said that in order to claim to pass off and restrain the defendant from passing off its goods/ services to the public as that of the plaintiff’s, the test of misleading the public with respect to the uniqueness of the manufacturer/ service provider, misrepresentation and loss or probability of it should be applied and proven.

The appellant’s claim for being one of the leading internet service providers in India was not contested and the words “Sify” and “Siffy” are both visually as well as phonetically similar to quite an extent, with or without the adding of “net” to “siffy”. The Supreme Court did not accept the respondent’s clarification of the word “Siffynet” being derived from an amalgamation of the first letter of the five promoters of the Respondent. The Court held that there was a similarity of duplicate or similar services by both parties and mix-up was likely, unlike claimed by the defendant. As for the balance of convenience issue, the Court was satisfied with the appellant’s evidence of being the former user and having a reputation with the public with respect to “Sify”. The respondent would not suffer great loss and could carry on its business under a different name. The Supreme Court set aside the High Court’s findings that no partiality would be caused to the appellant as it had another domain name since this would be imperative only if the case was one where the right to use was co-equal to both the sides. The respondent’s adoption of the appellant’s trade name was untruthful and so the High Court’s decision was set apart while that of the City Civil Court was declared.

Organization of Domain Names and the Regulatory Mechanism- ICANN Domain Name Dispute Resolution Policy, OECD, WIPO

ICANN is a non-profit company that was created under the direction of the United States Department of Commerce. The goal of the organization is to expedite the privatization of the technical administration of Internet names and addresses, the domain name system. As part of this privatization effort, ICANN declared on April 21, 1999, the selection of five companies to contribute in a two-month test of a freshly shared registration system. During and after the two-month test phase, apart from network solutions Inc (NSI), America online, CORE (Internet Council of Registrars), France Telecom   Melbourne IT and register .com joined as registrars for GTLD names (General Top Level Domain Names).com,.net, .org, .mil, .gov, .edu,.int.

In India, the courts have made efforts to apply the principles of trademark and in particular those concerning passing off to settle domain name disputes. In Satyam Infoway Ltd V/s Sifynet Solutions Pvt. Ltd. The Supreme Court has held the domain name could be said to be a word or name which was capable of differentiating the subject of trade or service made available to the prospective users of the internet. On the question of whether the principles of trademark law and in specific those relating to passing off apply to the domain name, the court said that “it is obvious that domain name may have all the characteristics of a trademark and could find an action for passing off. The court also observed that in India there is no legislation that clearly refers to dispute resolution in connection with domain names. But though the operation of the Trade Mark Act,1999 itself is extraterritorial and may not permit for suitable protection of domain names, this does not mean that domain names are not legally protected to the degree possible under the laws relating to passing off.

The difference between trademark and domain names lies in the style in which the two function. A trademark is protected by the laws of a country where such a trademark may be registered. A trade mark therefore may have manifold registrations in many countries across the world. On the other hand, since the internet allows for entrance without any geographical limitation, a domain name is theoretically accessible irrespective of the geographical location of the consumers. The product of this potential for universal connectivity is not only that a domain name would require universal exclusivity, but also that national laws might be insufficient to efficiently protect a domain name. The space required international regulation of the domain name system which was touched through the World Intellectual Property Organization (WIPO) and the Internet Corporation for Assigned Names and Numbers(ICANN).

Jurisdictional concerns in order to settle the domain name disputes have a huge cause of worry. Since there is no suitable law to govern the dispute there is a muddle whether the common law remedy of “passing off” has to be applied to redress the domain name dispute or whether can be the application of the Uniform Dispute Resolution Policy (UDRP) which is given by the ICANN. On the other hand, World Intellectual Property Organizations (WIPO) and the Organization for Economic Co-operation and Development (OECD) have laid down clear rules. This being the situation there are certain case laws that have been founded by employing the above-said mechanisms. This has formed a great misunderstanding as to which law/mechanism has to be complied with.

International Arbitration has a fundamental role in the settlement of domain name disputes. Since the law relating to domain name disputes is still in the pubescent stage the role of International Arbitration is significant in settling domain name disputes.

Uniform Dispute Resolution Policy created by the ICANN is used by all official registrars. Under this new policy, a trade mark owner can start a relatively low-cost administrative procedure to contest the existing domain name. In order to contest the trade mark owner must show, firstly, that the trade mark owner owns a trademark (either registered or unregistered) that is the same or confusingly alike to the registered second-level domain name. Secondly, that the party that registered the domain name has no appropriate right or interest in the domain name and thirdly, that the domain name was registered. Some of the important disputes settled under UDRP are as follows:

In Bennett Coleman and Co. Ltd V/s Steven S. Lalwani and Bennet Colman and Co. Ltd V/s Long-distance Telephone Company the respondent registered the domain names ‘theeconomictimes.com’ and ‘thetimesofindia.com’ correspondingly which were matching to the plaintiff domain names ‘economictimes.com’ and ‘timesofindia.com’ used by him for electronic publication of their leading newspaper ‘The Economic Times’ and ‘The Times of India’ respectively. The domain names in conflict redirected internet handlers to the respondent’s website ‘indiaheadlines.com’ which delivered Indian-related news. The WIPO panel established satisfaction of all elements contained in para 4(a) of UDRP and ordered the transfer of impugned domain names to the complainant.

In Microsoft Corporation V/s Amit Mehrotra The WIPO board found that the domain name ‘microsoft.org’ registered by the respondent was duplicate and confusingly similar to the trademark ‘MICROSOFT’ (in which the complainant had rights and respondent had no legitimate relevance) and that the respondent’s domain name had been registered and was being used in bad faith.

In the framework of the internet, where parties situated in different corners of the world can deal with each other at a click of a mouse, litigation of online litigation is often bothersome, unfeasible, time-consuming, and exorbitant. Providing an alternative approach to decide online disputes might aid in remedying grievances and increasing consumer confidence in e-commerce. Alternative Dispute Resolution (ADR) has a vital role to play here.

The WIPO founded the online domain name dispute resolution policy system for domain resolution system for domain name disputes commonly denoted as ICANN Policy. This process is not only faster but more cost-effective. The Uniform Domain Name Dispute Resolution Policy was adopted by ICANN on 24th October 1999. This policy provides for an effective administration process to resolve disputes concerning foul and bad faith registration of domain names. The Registrar may cancel, suspend or transfer a domain name. The plaintiff is needed to file a complainant with an Approved Dispute Resolution Service Provider as of date.

Judicial case laws have recognized the domain name problem and have tried to tackle it with injunctions, domain name transfers, and damages under the laws of passing off; however, legislature regarding the same has deep holes which need to be filled in with specific amendments to The Information Technology Act, 2000.

Harassment, blackmail, misuse of domain space, illegal gain, riding on goodwill, and initial interest mix-up are part and parcel of most domain name and cybersquatting disputes and require consideration and action of the legislature, administrative bodies as well as the judiciary.

The Anti Cybersquatting Consumer Protection Act of the United States is a major example that is cyberspace-specific, although it is still based on old-style legal principles of trademark law, and importantly, refers to jurisdictional parameters of domestic law, which are demarcated by real territorial boundaries. This act fails to account for the worldwide reach of cyberspace, and the act reads as if the internet were limited to the U.S. The Anti Cybersquatting Consumer Protection Act, in the Satyam case in India, it was seen that-“…since the internet allows for access without any geographical limitation, a domain name is potentially reachable irrespective of the geographical location of the consumers. National laws may be insufficient to effectively protect a domain name. The gap necessitated international regulation of the domain name system (DNS). This international regulation was effected through the World Intellectual Property Organization (WIPO) and the Internet Corporation for Assigned Names and Numbers (ICANN)”. If Indian law cannot highlight the issue domestically, India ratified international law and the process should be given its due.

Conclusion

There is an imperative role to be played by the Trade Mark Law in India to give uniform safeguard to domain names as that of the trade mark. Though the revealing of infringement of Intellectual Property Rights in cyberspace is easy, effective law enforcement poses a task. There is a need to upsurge the awareness of Intellectual Property Rights through different activities such as seminars, conferences, workshops, etc. There needs to be an Intellectual Property Assistance Centre at every district level. Industry Associations like ASSOCHAM, CII, and NASSCOM can play important role in the dissemination and awareness of the benefits of adopting a strong IP protection strategy for all e-businesses. The other mechanisms that can be well-thought-out to register the domain names are to give powers to registrars of domain names to scrutinize the objects with which domain names are registered and to control and administer their use through periodical checks. With regard to the domain, name dispute resolution by the UDRP areas such as freedom of speech, choice of law, the impartiality of panelists, the ineffectiveness of the panelists, and elusive definitions are anticipated to create problems in the smooth running of what would otherwise have been a comprehensive mechanism for the settlement of domain name disputes. The other problems include whether the method is as fair and operative as it should be, and the answer is indefinable. UDRP is considered to be a better resolution compared to any other resolution. The domain name dispute between the parties within the country can efficiently be addressed by the local courts if the domestic laws are amended properly to resolve Domain Name Disputes.

Author: Vikramaditya Singh – a litigation associate at Khurana & Khurana, Advocates and IP Attorney,  in case of any queries please contact/write back to us via email vikram@khuranaandkhurana.com

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