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This article is written by Janhavi Sitaram Dudam who is pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.

Introduction

Daniel J. Boorstin said that: “An image is not just a trademark, a design, a slogan, or an easily remembered picture.” It is a cleverly crafted personality profile of a person, organisation, business, product, or service. Domain names on the internet have a huge market of their own. The world is experiencing a new revolution in the area of communications, which has provided a plethora of new opportunities for cyberspace.

The internet’s increasing importance has transformed it into a powerful platform for companies to promote, advertise, and sell goods and services. Unfortunately, cybersquatting, which is the result of deceptive and illegal conduct, has risen as well. In this article, we will understand the meaning of cybersquatting and how it interferes with a brand identity. The article will also reflect on how social media platforms have given rise to new forms of cybersquatting. In light of this, we will discuss the cases involving cybersquatting and the remedies available.

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Cybersquatting : meaning and forms

According to the United States Federal Law known as Anti-Cybersquatting Consumer Protection Act, cybersquatting (also known as domain name squatting) is the act of registering, trafficking in, or using a domain name with the bad faith intent of profiting from the goodwill of someone else’s trademark. The cyber squatter then attempts to sell the domain to the individual or corporation that owns the trademark included within the name at an inflated price.

The word “squatting” comes from the act of occupying an abandoned or unoccupied space or building that the squatter does not own, rent, or have permission to use. Cybersquatting, on the other hand, is distinct in that the domain names that are being “squatted” are (sometimes but not always) paid for by the cyber squatters during the registration process. Cyber squatters normally demand much higher rates than the ones they paid for it. Some cyber squatters make disparaging remarks about the individual or business the domain is supposed to serve in order to persuade the subject to purchase the domain from them. Others monetise their squatting by posting paid links to the actual site that the user likely wanted through advertisement networks.

There are a variety of realistic forms of cybersquatting that attract attention, which come under the broader category of cybersquatting. Typosquatting, classic cybersquatting, cyberpiracy, and pseudo cybersquatting are examples of these variations. The “classical cybersquatting” is the simple registration of a domain name based on a trademark with the intention of selling it to the trademark’s legitimate owner for a profit.

The use of trademarks in domain names with the goal of attracting more traffic to a list of similar web pages identified by a common name is referred to as “cyberpiracy.” While “pseudo cybersquatting” is described as the registration of a domain name without actually using it or connecting it to any online web pages or active website. These are also known as “blocking registrations,” and they aim to prevent legitimate right holders from using domain names. All of the above actions are classified as different types of “cybersquatting.”

The importance of brand identity and value of goodwill

Two primary assets are considered when valuing a business. The two types of assets are tangible and intangible. Real estate, machinery, and inventory are examples of tangible assets. Intellectual property, brand recognition, and goodwill are examples of intangible assets that are not physical. Brand recognition and goodwill are closely linked to the value of the business, despite the fact that they are intangible assets.

The value of someone identifying your brand is known as brand recognition. A brand may include product features, logos, slogans, and so on. The Chevrolet logo, for example, is known as the “bowtie” and brings with it some stereotypes. Similarly, Ford’s emblem is also known as the “blue oval”. The primary problem with brand value is that the name itself – is the value of the brand. It takes a combination of psychology, sociology, economics, and field research to figure out how much a brand is worth.

Interbrand publishes an annual list of the “World’s Most Valuable Brands”, which is based on three factors: financial forecasting of future revenue associated with the brand, the brand’s role as a percentage of total revenue, and brand strength, which includes metrics like visibility and loyalty.

For 2020, the five most valuable brands were:

These are five businesses that are widely recognised for their high quality and are known by almost everyone on the planet. Maintaining a strong brand identity is critical for business owners. If you’re a small-town car dealer or a national marketing firm, the success of your company is determined by its brand name. 

Goodwill, like brand value, is an intangible asset that serves as a monetary value for otherwise unquantifiable intangible assets. When one business buys another, goodwill is calculated. For example, if Company A pays $100 million for Company B and Company B’s tangible and intangible assets are valued at $90 million, then Company B has goodwill worth $10 million. Maximizing brand value for a business owner also leads to long-term success, and goodwill is the valuation of that intangible value in the sense of selling the company.

Social media : new target for a cyber squatter to tarnish the brand

With the emergence of social media platforms like Facebook, Instagram, and Twitter, a new form of cybersquatting has arisen, in which trademarked brands or names of dignitaries or public figures are registered on popular social media websites. Because of the popularity of social media platforms, businesses have built profiles on these sites in order to gain more customers. To develop strong credibility and goodwill for their signs, social media websites have started providing verification tags to prominent organisations.

While Tony La Russa’s lawsuit against Twitter was voluntarily dismissed, his case demonstrated the dangers of these websites’ new username features. The manager of the St. Louis Cardinal, Tony La Russa, had filed a cybersquatting complaint against Twitter. The issue was that a Twitter account containing La Russa’s name had posted a photo of La Russa with the caption “Hey there!” Tony La Russa is now using a Twitter account.”

This profile urged Twitter users to follow La Russa’s profile to stay up to date on his activities. The notifications were obnoxious and defamatory, according to La Russa. La Russa was informed that the profile’s maker had done so in bad faith and profited from La Russa’s trademark. After the parties had resolved the issue, La Russa filed a voluntary dismissal. The use of offensive tags and the reservation of usernames are particularly harmful to trademark owners. Facebook agrees that username infringement can be a big deal, particularly if someone else is attempting to create a reputation using a trademark that the rightful owner of a trademark has spent a lot of time developing. 

Cybersquatting through username infringement prevents the trademark owner from using the well-known username, preventing him from using his trademark on that social media platform. A reservation of a username by bad faith may also tarnish and damage the mark’s credibility. The trademark owner loses leverage of his trademark’s credibility when someone reserves a username with malicious intent.

Remedies for cybersquatting under trademark law

There is currently no law in India that addresses cybersquatting crimes. To prevent potential cybersquatting crimes, we need stringent laws that provide penalties for cyber squatters. Victims, on the other hand, should take the following measures to recoup their losses caused by cyber squatters:

A. The victim can bring arbitration proceedings under the Internet Corporation for Assigned Names and Numbers (ICANN)

 The victim has the following option against cyber squatter-

  • Filing a case against India’s multiple courts.
  • Can send a cease-and-desist notice to the cyber squatter. A passing-off order can be obtained by the victim against the cyber squatter.

B. UDRP- Uniform Dispute Resolution Policy

The Uniform Dispute Resolution Policy (UDRP) was introduced by the Internet Corporation for Assigned Names and Numbers (ICANN) and is a part of the registration agreement you electronically agree to when you buy a domain name from a website such as BigRock, GoDaddy, or others. To begin a proceeding under the UDRP, the trademark owner must choose one of the authorized service providers. For example, Asian Domain Name Dispute Resolution Centre (ADNDRC), Canadian International Internet Dispute Resolution Centre (CIIDRC), WIPO, etc. 

As per Para 4(a) of the UDRP, a complainant must prove all three elements below-

  1. a domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
  2. The infringer has no rights or legitimate interests in respect of the domain name; and
  3. The domain name has been registered and is being used in bad faith. The following conditions, in particular, but not limited to, if considered by the panel to be present, shall be proof of the registration and usage of a domain name in bad faith for the purposes of paragraph 4(a)(iii):
  • circumstances stating that domain name is registered solely for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant, who is the owner of the trademark or service mark, or to a rival of that complainant, for valuable benefit in excess of recorded out-of-pocket costs directly related to the domain name.
  • A domain name is registered in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that infringer has engaged in a pattern of such conduct; or
  • The infringer has registered the domain name primarily to interrupt a competitor’s business; or
  • By using the domain name, the infringer has intentionally attempted to attract, for commercial gain, Internet users to his website or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or through the endorsement of his web site. 

C. INDRP – .In Domain Name Dispute Resolution Policy

The .In Domain Name Dispute Resolution Policy (INDRP), which is significantly similar to the UDRP, would be applicable to ‘.in’ domain names. According to the INDRP Policy, someone who believes a domain name registered by the .IN Registry infringes on their legitimate rights or interests can file a complaint with the .IN Registry and pay the appropriate fees. The complainant must meet the same requirements as those mentioned in paragraph 4(a) of the UDRP Policy and paragraph 4 of the INDRP.

Cases related to cybersquatting

1. Tik Tok Case 

Fotios Tsiouklas and Alan Gokoglu, two Australian friends, predicted that the app TikTok would become a famous brand So, they bought tiktoks.com for $2,000 shortly after it launched. Bytedance, TikTok’s parent company, offered Tsiouklas and Gokoglu $145,000 to purchase the domain. The pair, however, decided to keep the domain and launch a “follower growth” business, offering a “follow-for-follow” service. They also charge a fee to help people develop their following.

Bytedance filed a cybersquatting lawsuit against TikToks.com in August 2020 after a failed negotiation attempt for the tiktoks.com domain. According to the WIPO administrative panel decision report, the company filed an amended complaint in September 2020, which included the following domains:

  • Growtiktok.com,
  • Tktokcharts.com
  • Tiktokexposure.com, and
  • Tiktokplant.com.

In this case, the ‘bait-and-switch’ tactic is used by the respondent intending to benefit from the confusion. Respondents would provide services to raise user fame on the complainant’s TIKTOK social media site without the complainant’s permission and in breach of the complainant’s terms of use policy, which could result in the suspension of the complainant’s customers’ accounts, causing the complainant’s business to be disrupted. The panel directed the pair of friends to transfer all five domains to the complainant by January 13, 2021.

2. Amul 

Amul is one of India’s largest dairy firms, with the fiscal year 2019-2020 revenue turnover of more than 38,550 crore Indian rupees (approximately US$5.28 billion, or 385,500,000,000 Indian Rupees). Someone purchased the following domains and created phishing sites for the company, making it a target of cybersquatting:

  • Amuldistributor.com
  • Amulboard.com
  • Amufran.org.in
  • Amuldistributorindia.com

The fraudsters activity-

  • Created bogus bank accounts in Amul’s name and 
  • Sent fake forms via email as part of their scheme. 
  • To become an Amul distributor and franchisee, they asked to pay a fee. 
  • On the website, they ran recruitment scams in which applicants were asked to pay a fee to apply for jobs.

From 2018 to 2020, a scam was executed. Finally, Amul released a public notice about the scams and took legal action to resolve the situation.

Measures taken by online platforms to protect the content

Twitter, Facebook, and other social media platforms have taken measures to combat cybersquatting. Most of these measures will be addressed below-

  • Facebook 

If registered trademarks are infringed on, Facebook reserves the right to recover usernames. Trademark owners are responsible for reporting any trademark infringement to Facebook through a “username infringement form.” Furthermore, Facebook usernames need “mobile number authentication,” which means that in order to obtain a username, the user must validate their account using their mobile device.

  • Twitter 

Cybersquatting is prohibited by Twitter’s name squatting regulation, which eliminates the existence and incidence of “username for sale” accounts. Selling or extorting money or other forms of payment in return for usernames on Twitter would result in the extorter’s account being suspended. Non-parody impersonation is also prohibited under Twitter’s “Impersonation Policy.”

If an account gives out incorrect details or causes others to be confused, it is said to be guilty of impersonation, and those accounts can be permanently suspended. The criterion used by Twitter to define satire is whether or not an average person will realise the fake profile is a joke. Finally, following the La Russa suit, Twitter introduced “Verified Accounts” to prevent “identity confusion.” The “verified account” insignia on a profile indicates that it is a genuine and legal account.

  • Instagram

Instagram is the most popular social media platform among the millennial generation. As the number of Instagram users grows, measures have been taken to prevent cybersquatting. The concept of a “verified account,” is a safeguard against identity confusion taken by Instagram. A blue tick on an Instagram profile indicates that it is a “verified account,” which means that the social media site has verified that it is the authorised profile for the individual or brand it represents.

Conclusion

Cybersquatting has a cascading impact on society’s social and economic interests, so it should be prosecuted to provide a deterrent effect. Governments all over the world are looking at cybersquatting as a serious problem. To combat cybersquatting, different countries have implemented a variety of initiatives. 

For example, The Anti cybersquatting Consumer Protection Act (ACPA) in the United States, allows a trademark owner to sue the infringer of a domain name for damages. Uniform Domain Name Resolution (UDRP) is a service provided by the World Intellectual Property Organization (WIPO) on an international level. ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) is a tool for settling conflicts over domain names and trademarks. In countries like India, where there are no cyber laws to prevent domain name disputes, the .INDRP (.In Domain Name Dispute Resolution Policy) process is used to settle such cases. 

References

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