This article is written by Kiran Mary George.

Mandrake, Vixen and Co, a partnership company dealing in silk fabric in Bangalore for the last 10 years decides to expand their consumer base, and pursuant to setting up offices across the country to reach out to retailers, they decide to launch their very own website. A brainstorming session has them settling down on  www.mandrakevixenco.co.in .Having gained great repute for their material throughout the country over the past 5 years, they filled an application to register a domain name to expand their online presence.

However, they received an unpleasant shock when they were informed of a number of  domain names with their trademarked business name – www.mandrakeandnvixen.co.in. www.mandrakevixen.co.in, already registered within the last two years. Upon visiting the sites, it was found that they were largely empty save for a big bold lettered “Mandrake, Vixen and Co – Dealers in fabric”, followed by a number of advertisements for competing companies’ products. Accordingly, a suit was filed against the domain owners.

Mandrake, Vixen and Co’s little quandary is a typical example of cyber squatting, or bad faith registration. The main purpose behind wasting thousands of dollars only to register and maintain a website is to utilize the goodwill earned by a particular institution, company, organization or person to personal benefit. Aside from cases of cyber squatting occurring in the plain ignorance of the trademark-holder and often co-existing with the trademark holder’s domain name, it also happens where a trademark holder has forgotten to re-register the domain name upon expiry of the period for which domain name registration is valid.

 

UNDERSTANDING CYBER SQUATTING

It is general practice for most well established firms to choose a domain name that can be identified with their established trademarks. The entities that pre-registered the domain names for Mandrake, Vixen and Co were persons other than the owner of well known trademark, who registered the names knowing that the popular fabric dealer would eventually seek to acquire a similar domain name.

Because Mandrake, Vixen and Co was well known, consumers, expecting to visit the online website found themselves being directed to the pseudo website that claimed to be the company being searched for, giving the domain owner a fantastic opportunity to make money out of posting advertisements on the website and thus diverting business to other sites that are often competing establishments.

When the scapegoat companies like the one cited in the instance above finally awake to the realization that an earlier registration has rendered it unable to register a domain name that contains its very own trademarked company name, they approaches the actual owner of the domain name. The latter then seizes the opportunity he has been waiting for all along and makes an offer to sell it to the rightful company at a massive profit to himself. A reputed and well established company like Mandrake, Vixen and Co would obviously seek to prevent online traffic from being misdirected to such wrongfully owned websites, and would therefore find themselves left with no choice but to buy out the domain names they have been held ransom to, in order to protect their own interests.

What gives these cyber squatters a lot more courage to put even popular companies in a corner by either 1) registering a domain name without utilizing it or b) establishing a company in a similar name to trade off the business of the trademarked company, is the fact that in order to avoid the arduous process of litigation a number of companies resort to an out of court settlement by buying out the domain names from the squatters.

However, there are in fact a number of instances where suits have been filed to recover the domain name from the wrongful owner. One of the first cases of cyber squatting in India was Yahoo Inc. vs. Aakash Arora & Anr., where the defendant launched a website www.yahooindia.com, almost identical to that of plaintiff’s and providing similar services  in an attempt to trade on the fame and popularity of the popular news, and mail website. The court ruled in favour of the trademark rights of the US-based Yahoo Inc, stating “A domain name registrant does not obtain any legal right to use that particular domain name simply because he has registered the domain name, he could still be liable for trademark infringement”.

REMEDIES

An entity – individual or organization in India affected by domain name related trademark infringement has three methods of remedy:

 

1. PROSECUTION UNDER THE INDIAN LAW

Unlike most developed nations, Indian law does not have a legislation for domain name protection, and therefore, cyber squatting cases are decided under the Trade Mark Act, 1990.

Although a distinction has been drawn between a trademark and a domain name, the Supreme court in the case of Satyam Infoway Ltd vs Sifynet Solutions Pvt Ltd; AIR 2004SC3540 recognized the lacuna in the law, but in the absence of any specific legislation to protect domain names, the subject has been covered under the Trade Mark Act. The Court stated, “As far as India is concerned, there is no legislation which explicitly refers to dispute resolution in connection with domain names. But although the operation of the TRADE  Marks Act, 1999 itself is not extra territorial and may not allow for adequate protection of domain names, this does not mean that domain names are not to be legally protected to the extent possible under the laws relating to passing off“.

The Trademark Act provides for two kinds of relief –

• Relief for trademark infringement (Sec 29), where registration of trademark is essential to claim relief.
• Relief for “passing off”, where registration of trademark by owner is not essential to claim relief.

In the well known case of Dr Reddy’s Laboratories Limited Vs Manu Kosuri and Anr 2001 (58) DRJ241,  Hon’ble High Court of Delhi Court, speaking on the confusion that can be caused on account of the deceptive similarity between the plaintiff’s registered “Dr REDDY’S” and the defendant’s domain name www.drreddyslab.com held that “It is a settled legal position that when a defendant does business under a name which is sufficiently close to the name under which the plaintiff is trading and that name has acquired a reputation the public at large is likely to be misled that the defendant’s business is the business of the plaintiff or is a branch or department of the plaintiff, the defendant is liable for an action in passing off and it is always not necessary that there must be in existence goods of the plaintiff with which the defendant seeks to confuse his own domain name passing off may occur in cases where the plaintiffs do not in fact deal with the offending goods. When the plaintiffs and defendants are engaged in common or overlapping fields of activity, the competition would take place and there is grave and immense possibility for confusion and deception. The domain name serve same function as the trademark and is not a mere address or like finding number of the Internet..”

The Trade Mark Act, however, is woefully inadequate as it protects trademarks only where it has been registered, i.e. it is not extra-territorial, and therefore, therefore offers a very limited protection against infringement of trademarks by use of identical or similar domain names. Further, it remains unable to include within its ambit the widening range of disputes emerging in cyberspace,

 

2. ICANN and UNDRP

When the Internet Corporation for Assigned Names and Numbers (ICANN) was first established in 1998, one of its foremost tasks was to resolve what was known as “The Trademark Dilemma”, i.e., the use of a trademark as a domain name without the trademark owner’s consent.

Consequently, the ICANN commissioned the World Intellectual Property Organisation (WIPO) to create a report on the conflict between domain names and trademarks. Consequently, the WIPO in its report recommended the setting up of a “mandatory administrative procedure concerning abusive registrations”, which would permit the creation of a “neutral venue in the context of disputes that are often international in nature”, called the Uniform Domain Name Dispute Resolution Policy (UNDRP), which was adopted by the ICANN on 1 December 1999.

Para 4(a) of the UDRP states the premises for filing a complaint :

“You (the domain name registrant) are required to submit to a mandatory administrative proceeding in the event that a third party (a “complainant”) asserts to the applicable Provider, in compliance with the Rules of Procedure, that:

(i) your domain name is identical or confusingly similar to a trademark or service mark in which
the complainant has rights; and

(ii) you have no rights or legitimate interests in respect of the domain name; and

(iii) your domain name has been registered and is being used in bad faith.

In the administrative proceeding, the complainant must prove that each of these three elements are present.”

At the international level, cases can be filed with any of the ICANN specified list of dispute resolution service providers such as WIPO, The Asian Domain Name Dispute Resolution Centre (ADNDRC), National Arbitration Forum(NAF).The WIPO has in fact, provided an online platform for  administration of commercial disputes involving intellectual property rights, where a dispute can be filed and within 45 days a provision is made for the disputing partied to go to court to resolve their disputes or decide the outcome of the procedure. Details with regard to rules, filing procedure and fees are available at :

1. Modified Schedule of Fees for Uniform Domain Name Dispute Resolution Policy (Schedule of Fees)
2. Modified WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy

The Bennett and Coleman v Steven S Lalwani case filed before the Dispute Resolution and Arbitration Centre of the WIPO is a popular one. Here, the plaintiff had, since 1996, held the registered and trademarked domain name www.economictimes.com, using it for electronic publication of newspapers, which had been in turn used by the defendant in India as a mark for literary purposes.

The WIPO judgement clearly held that where the plaintiff has a significant reputation as publishers of newspapers in electronic as well as print form, the defendant had made use of their trademarked name as the domain name in bad faith, in an attempt to purposely attract, for profit Internet users by creating confusion, and ruled in favour of the plaintiff.

 

3. INDRP

For the purpose of resolving domain name-related disputes in India, India has established a .IN Registry (.in being India’s a top level domain name or TLD on the internet), an autonomous body under the National Internet Exchange of India, which takes domain name registrations. However, the terms and conditions to the registration also involve submission to a mandatory dispute resolution procedure under the .IN Dispute Resolution Policy (INDRP). Details with regard to complaint submission guidelines and fees payment can be found at the INDRP Rules of Procedure

The INDRP has been formulated along the lines of the UNDRP, incorporating certain provisions of the IT Act as well as other internationally validated guidelines for the purpose of handling domain name and trademark-related issues in India.

Para 4 of the INDRP which closely corresponds to Para 4 (a) of the UDRP reads thus:

“Any person who considers that a registered domain name conflicts with his legitimate rights or interests may file a complaint to the .IN Registry on the following premises:

(i) The Registrant’s domain name is identical or confusingly similar to a name, trademark or service mark in which the Complainant has rights;

(ii) The Registrant has no rights or legitimate interests in respect of the domain name; and

(iii) The Registrant’s domain name has been registered or is being used in bad faith.”

What makes India’s INDRP strikingly different from ICANN’s UNDRP, is the phrase “each of these three elements”, requiring presence of all three elements in a domain name dispute in order to prove and inappropriate or abusive registration – this phrase being absent from INDRP’s provisions.

This, meaning that purely on the basis of a domain name being previously trademarked and being identical or similar in name to that of a trademarked company, the trademarked company may be unfairly held to have better rights, irrespective of the inexistence of bad faith on the part of the domain name registrant or absolute lack in similarity between the two businesses concerned and legitimate interest in the domain name concerned.

Upon receipt of a complaint by the INDRP tribunal, an arbitrator is appointed and within three days a notice issued to the respondent. The arbitrator shall then conduct the proceedings in accordance with the rules laid down by the Arbitration and Conciliation Act, 1996. The award shall be passed within 60 days of the commission of the arbitration proceeding. However, the award is not mandatory to be followed.

One of the most important decisions taken by the INDRP Arbitration panel was in the case of Bloomberg Finance L.P., (BF) vs. Mr. Kanhan Vijay. Here, the plaintiff had registered the domain name www.bloomberg.net.in, the name being trademarked by BLOOMBERG in 1996 as trade name and corporate entity carrying widespread reputation and goodwill in India and abroad. The company had previously registered various domain names incorporating the word “bloomberg” and was therefore recognized as the prior registrant and adopter of the domain name. The bad faith of the respondent was thus recognized, and the domain was transferred to the complainant accordingly.

 

NEED FOR REFORM

In the light of the gaping loopholes and inadequacies in the Trade Mark Act, 1999 for the purpose of handling the subject of cyber-squatting or domain name disputes, there exists a need for immediate reforms to

1. a) draft a new legislation that recognizes and addresses the menace of cyber squatting, and addressing the need for effective, all encompassing and internationally validated dispute resolution methods.
2. b) revamp the INDRP do as to make it more effective than simply a guiding policy by making the award mandatory to follow, as well as overcoming the unnecessary procedural requirements and resolving the unfavorable inconsistencies with the UNDRP.
3. c) make binding the decisions given by WIPO and other ICANN recognized dispute resolution service providers under the Arbitration and Conciliation Act, 1996 so as to ease the burden on the Indian judicial system.