cyber squatting

In this article, Mayank Garg who is currently pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses  What is Cyber Squatting? What are the laws against Cyber Squatting?

Introduction

A domain name is the human-friendly name of an internet address. URL is constituted as an actual technical name for a website. The coordination of all the websites or domain names is said to be done by Internet Corporation for Assigned Names and Numbers (ICANN). There are two levels of domain, i.e. top level and second level domains. At top level domains, it consists of two character abbreviations of the names of the country; for e.g., India’s ccTLD is “.in” but in a domain name, the label that precedes the TLD constitutes the second level domain; for e.g. “.com”.

Registration of domain names lead to the disputes which usually allege the infringement of trademarks. Anything bearing the mark is taken to be an indication of the reputation and goodwill of the company, the quality of product or service and the affiliation of the product/service with the company.[1]

Cyber Squatting

Cyber squatting- The most common domain name dispute relate to the crime of cyber squatting. Cyber squatting can be understood as the registration of a domain name that consists of a mark that is identical to or confusing similar to an existing trademark. Cyber squatting is constitutional only if the registration has been done in bad faith, that is, with the intention of selling the domain name at such a higher price to the owner of the trademark, or to create an impression of having some kind of affiliation with the owner of the trademark.

For e.g., in the case of Oberoi Hotels Pvt. Ltd. v. Arun Jose, oberoi hotels owned a trademark on the mark  “The Trident” and “Trident Hotels”, while Arun Jose had registered the domain name ‘tridenthoels.com’. The courts held that the domain name was held by the respondent in bad faith and hence he was responsible for cyber squatting.

Cyber squatting (otherwise called space hunching down), as indicated by the United States government law known as the Anti-cybersquatting Consumer Protection Act, is enrolling, trafficking in, or utilizing an Internet area name with lacking honesty purpose to benefit from the goodwill of a trademark having a place with another person. The cyber squatter then offers to offer the space to the individual or organization that possesses a trademark contained inside the name at an expanded cost. The term is gotten from “hunching down”, which is the demonstration of involving a surrendered or empty space or building that the squatter does not claim, lease, or generally have consent to utilize . A domain name generally comprises of the trademark of an organization or business a domain name has 2 essentials elements , for say the top level domain (TLD) such as .com, whereas second level (.co) and third level that may consist of a trademark . For example, www.trademark.co.com. In this “.com” is a top level domain, “.co” is a second level domain and “trademark” is a third level domain.

In the well-known case  of  Marks and  Spencers, the defendant registered enlisted trademark of mark and Spencers as “www.marks and spencers .com”  with the mala fide  aim to offer it at a higher cost to the legitimate proprietor . This demonstration in digital world  is regularly known as “CYBER SQUATTING”, comparably in UK , In the judgment of “One in a million case” the English court conceded injunction against cybersquatting  of domain  names including  Sainsbury, Marks and Spencer and English telecom the offense of cybersquatting   additionally  involves unjustifiable competition where a defendant  deliberately takes uncalled for favorable position of a well-known trademark to occupy movement to the area so that  the  legitimate trademark proprietor is constrained to pay the litigant a preposterous add up to exchange an domain name. In an English court judgment, it was held that whether the domain was registered by another person or which is deceptively similar to the famous trademark, the unfair competition may be assumed whereas in these cases deliberately the marks were registered and the motive lacked legitimate purpose that amounts to unfair registration.[2]

Yahoo Case

The other famous Yahoo case, the U.S. based yahoo Inc. suited the defendant in India who register a similar domain name Yahooindia.com and used [Yahoo India] as their trademark. The whole content of the website Yahooindia.com was very much similar to Yahoo Inc. The High Court of Delhi passed an order restraining the defendant from using Yahoo as their trademark or domain name and using the same code that infringe their copyrights. In the whole matter Indian Courts held that a domain name is very much entitled to the same protection as their trademark and observed the law of trademark that is applied to the virtual world as well.[3] , The practice that is come to be known as cybersquatting begun when most organizations were not sharp about the business openings on the Internet. Some entrepreneurial souls enlisted the names of understood organizations as area names, with the aim of offering the names back to the organizations when they at last woke up.  Panasonic, Fry’s Electronics, Hertz and Avon was among the “casualties” of cyber squatters.

Leading Judgments

Further, in the case of Tata Sons Ltd. V Monu Kosuri and others3, the defendant registered deceptively similar domain name containing the word ‘Tata’ in it. The court confirmed that the domain names are not just internet address and it must be protected. Hence, the court ordered an ad interim injunction in favor of the plaintiff. In another case Acqua Minerals Ltd v. Pramod Borse4 and others the defendant deliberately registered ‘Bisleri.com’ as its domain name. When the plaintiff who were actually owning the marks ‘Bisleri’ moved an action , the court passes an injunction holding that a domain name serves the same function similar to trademark and thus need a similar level of protection as granted to the trademark . A domain name also identifies a web page as a source of origin or various services that are in same manner as the associated brand name. Similarly, in Dr Reddy’s Laboratories Ltd v Monu Kosuri and others 5, the court held that the defendant’s domain name ‘Dr Reddy’s lab .com’ was deceptively very much similar to the trademark of the plaintiff. In Satyam Infoway v Sifynet solutions6, the appellant used ‘SIFY’ as a main component of its domain name as www.sifymall.com, www.siffy realestate.com on other hand the respondent infringed its domain name by using the same domain name. The Supreme Court held that appellant was entitled to injunction order to stop the respondent from using the domain names in dispute of it and held the respondent guilty of passing off.

Even when a trademark owner has registered a domain name with the particular gTLD, another party may register the same domain name or identical domain names with another gTLD. For e.g., in the case of NewsToday Printers and Publishers (P) Ltd. v. InetU, Inc., NewsToday printers registered the domain name of ‘newstoday.co.in’ in the ‘’.co.in’ domain, consisting of their registered trademark of ‘NewsToday’, while the respondent registered the domain name of ‘newstoday.com’ in the ‘.com’ domain. The court held that even though the domain name was identical or confusing similar to a trademark in which the complainant had rights, the complainant failed to establish that the respondent had no rights or legitimate interest in respect of domain name or that the domain name was registered in bad faith. The complaint was accordingly dismissed.

Another area of concern is that a large number of domain names can be created out of the same trademark by adding various prefixes and suffixes, even on the same gTLD. For e.g., in the case of Tata Sons Ltd. v. Ramadasoft,  though Tata Sons had registered the domain name ‘Tata.com’, the respondent registered the following variations of the domain names incorporating the trademark “TATA’. The court held that the domain name were held by the respondent in bad faith and hence he was responsible for cyber squatting.

Likelihood of Confusion Test

The traditional test of likelihood of confusion was first applied by the US courts in the case of Comp Examiner Agency v. Juris, Inc., where the defendant, which was the owner of the trademark ’JURIS’, found that  the name juris.com was being used by the plaintiff for the provision of legal services online. It sued the plaintiffs for the trademark infringement, while the plaintiff challenged the trademark of the defendants on the ground that the term juris was too generic, and therefore the trademark granted to it must be cancelled. The court founded further that te use of domain name ‘juris.com’ by the plaintiff ease likely to cause confusion or mistake as to the affiliation, connection or association of the plaintiff with the defendants. The use of this domain name therefore constituted trademark infringement and was causing irreparable harm to the reputation of the defendants, and also precluded the defendants from using a similar or confusingly similar domain name such as ‘juris.com’.

Cyber Squatting under the Lanham Act, ACPA

Anti-Cyber Squatting Consumer Protection Act of 1999 provides that a person will be liable for a civil action if

  1. Has a bad faith to profit from the mark; and
  2. Registers, traffics in or uses a domain name that is identical or confusingly similar to or dilutes a distinctive or famous work.[4]

In determining whether a person has bad faith intent described under subparagraph (A), a court may consider the factors such as, but not limited to-

  • The trademark or other intellectual property rights of a person, if any, in the domain name;
  • The extent to which domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
  • The person’s prior use, if any, of the domain name in the connection with the bona fide offering of any goods or services;
  • The person’s bona fide noncommercial or fair use of mark in a site accessible under the domain name;
  • The person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
  • The person’s offer to transfer, sell. Or otherwise assign the domain name to the mark owner or any third party for financial growth without having used, or having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;
  • The person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the other person’s prior conduct indicating a pattern of such conduct;
  • The person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of the others that are distinctive at the time of registration of such domains, or dilutive of famous marks of others that are famous at the of registration of such domain names, without regard to the goods or services of the parties; and
  • The extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of sub-section (c).

Bad faith intent described shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.

There are major problems with the question of retrieving the domain names through court. Some of the problems that can be immediately identified are:

  • Issue of Jurisdiction– Trademark law is domestic, where as a central international authority controls domain name. As we can see, Municipal laws govern Trademarks; it has to be resolved by a domestic authority. In India, the trademark of a product or a company has to be registered as provided by the Trade Marks Act, 1999. This Act also provides for the dispute resolution mechanism.
  • When there is an infringement of a trademark, the Appellate Board has the power to decide the dispute. Other countries also have similar provisions to resolve trademark disputes.
  • His problem arises when the question of registration comes in. Registration and control of trademark is done under the domestic law whereas domain name is done by ICANN[5]an international domain name organization. The domain name central organization has its agents in different countries who issue domain names on the basis of first come first served principle.

As Internet is a worldwide network, and the website which is to be accessed can be infringed from anywhere in the world, the question arises whether a court can have jurisdiction over an infringer anywhere where the website is accessible. Courts in the United States[6] have taken jurisdiction over the matters of domain name infringement. The simple issue is if the individual owning the domain name resides within the jurisdiction of the court where the suit is filed, then the court can take cognizance of the offence and proceed against the individual concerned but if the individual is situated somewhere else, it is not possible.

The United Nations World Intellectual Property Organization (‘WIPO’) has proposed guidelines for resolving disputes concerning trademarks and for managing the Internet domain name process. WIPO[7] proposes that ICANN[8] establish a mechanism to give owners of famous or well-known trademarks exclusive use of their marks in some or all-generic top-level domains throughout a large geographic area. WIPO also recommends that ICANN[9] establish a dispute resolution procedure that would only handle allegations of cyber squatting.[10] In its interim report, the WIPO recommended dispute resolution for all intellectual property conflicts involving domain name registration.

The Indian Trademark Law and Legal Remedies

According to Section 135 of the Trade mark Act, 1999 legal remedies for suits for infringing registered trademarks or the passing of injunction, damages[11] or account of profits or delivery of goods or destruction of infringing goods. Section 103 provides penalty for the applying of false trademarks i.e. punishable with infringement of not less than 6 months and may extend up to 3 years followed by fine not less than Rs. 50000 extended up to 2 lacs. In case, if a mark is registered the common law remedy of passing off is available to the owner but in case in which his mark is registered, he also possess the statutory right to file the action for infringement under Trademarks Act 1999.[12]

Conclusion

Today the Internet has become such an integral part of the modern business environment inasmuch as it is a virtual world wherein buying and selling of goods and/or services takes place on a massive scale. The consumer avails the services on the Internet and certainly relates the same with the brand/trade/domain names. This leads to the creation/building of goodwill or reputation, which is an asset and if the services don’t meet the expected standards, it clearly affects the goodwill or reputation. Thus, more often than not the domain name is kept same as the trade name so that the ultimate consumer is aware as regards the source of the goods and/or services and expects the quality/standards maintained by the provider.

References

[1] Rastogi Anirudh, CYBER LAW, LAW OF INFORMATION TECHNOLOGY AND INTERNET, Lexis Nexis, pg. 322.

[2] Marks and Spencers and others v. one in a million, 1998 FSR 265.

[3] Yahoo INC v. Akash Arora, (1999) PTC 201

Tata Sons Ltd. v Monu Kosuri and others ,2001 PTC 619

4  Acqua Minerals Ltd v Pramod Borse and others

[4] “A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person-

  • Has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and
  • Registers, traffics in, or uses a domain name that-
  • In the case of a mark that is distinctive at the time of registration of the domain name, is identical of confusingly similar to that mark;
  • In the case of a famous mark that is famous at the time of registration of the domain name, is identical of confusingly similar to or dilutive of that mark; or
  • Is a trademark, word, or name protected by reason of section 706 of title 18 or section 220506 of title 36.”

[5] Internet Corporation for Assigned Names and Numbers.

[6] Panavision International v. Toppen, 141 F. 3d 1316, Zippo’s case, 952 Supp. 1124.

[7] http://ecommerce.wipo.int/domains/background.html. In April 1999, following the First Internet Domain Name Process, WIPO published its Report, “The Management of Internet Names and Addresses: Intellectual Property Issues”, focusing on the problems caused by the conflict between trademarks and domain names. The recommendations formulated in the Report have largely been implemented by the Internet Corporation for Assigned Names and Numbers (ICANN), and have resulted in the implementation of a successful administrative system for resolving domain name disputes involving trademarks, as well as a system of best practices for domain name registration authorities, designed to avoid such conflicts.

[8] The Internet Corporation for Assigned Names and Numbers (ICANN) is a technical coordination body for the Internet. Created in October 1998 by a broad coalition of the Internet’s business, technical, academic, and user communities, ICANN is assuming responsibility for a set of technical functions previously performed under U.S. Government contract by IANA and other groups.

[9] ICANN was established in September 1998 by the Clinton Administration to take over responsibility for the IP address space allocation, protocol parameter assignment, domain name system, management, and root server system, management functions. Andrew Terrett, The Internet, Law Society Publishers London, 2000, p. 159.

[10] http://wipo2.wipo.int/process1/6-12-2001.

[11] Where plaintiff could not prove losses caused due to unauthorized use of his domain name, court held that damages could be paid- Adobe Systems Inc. v. Rohit Rathi, 2008 (37) PTC 523 (Del).

[12] Section 27, Trade Marks Act, 1999.

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