Cyber Squatting and Hampering Goodwill- IPR

By Aarushi Singh

Delhi High Court in the case of Manish Vij and Ors. Vs Indra Chugh and Ors.^[1] defined the word cyber-squatting as an act of obtaining fraudulent registration with intent to sell the domain name to the lawful owner of the name at a premium

Cybersquatting is registering, selling or using a domain name with the intent of profiting from the goodwill of someone else’s trademark.

It generally refers to the practice of buying up domain names that use the names of existing businesses with the intent to sell the names for a profit to those businesses.

In simple words, it means trading via a domain name which is similar to the domain name of an already existing company/organization to defraud the customers as well as to make profits which are originally belongs to the already existing company/ organization. In layman’s term, it is one of the easy methods to earn illegitimate money.

Domain Name

Everything which is available on the internet has a source of its coming, the websites that we look for while searching such as a file of information or a web page, they have their own address known as URL, Unique Resource Locator.

A domain name is a part of this address which is assigned to each computer or service on the internet. Domain name system maps names to a series of number or IP address.

These numbers are then linked with an easily read and remembered address – the domain name. They are designed in such a manner so that even humans who are not technological experts will be able to remember them easily.

So, the binary series of numbers are converted into some wordy format for the humans to recognize them better.

For example: ‘Starbucks’ which is a pre-existing huge company which has a huge turnover and profit income. Suppose the official domain name for Starbucks is “Starbucks.org” and any person have formed a similar address, for example “Starbuck.org”.

The only difference in both these domain names is ‘S’. So whosoever is trying to attempt creating such false domain name not with any intention to use is legitimately, whosoever is trying to register second mentioned domain name, registering potential misspellings or typos for Starbucks and linking their false domain name to original ones to try to sale their products are all examples of cyber-squatting.

People who will be searching for Starbucks will automatically get to see the fake URLs as well because search engines are tend to show all the possible results related to each search which works as a jackpot for this defaulters in committing frauds.

Hence, domain names are an essential element of business now. They helps a businessman expand his business even to the places it could not possibly reach physically. When a grand name is associated with a domain name, it builds expectations of the customer that if a certain brand is advertising it means the product has certain value.

For example, Puma and Adidas, both are brands for shoes but their values are much higher than the shoes which do not own their names or any names because the costumers trusts the brand and it produces good-will for the brand.

Domain names build reputation for the company in the market which is an essential element to do business. Domain names helps in expanding as well as they are direct way of contacting each customer which means it is a great way of communicating with a huge audience all at once.

Sometimes it is possible to forget the re-registration of domain name even though the legitimate owner holds it, that’s when the cyber-squatter can come into action.

The domain name works even if the owner has not re-registered it and if it is not re-registered prior the date of expiry then anyone can purchase the domain name. In this scenario cyber squatters register the domain name in their names. This process is called renewal snatching.^[2]

Laws in India

We can only imagine the losses cyber-squatting can incur on such trusted brands, hence we can say that this crime is very notorious but still India does not have any specific or separate laws governing it.

The cases related to domain name protection are dealt under Trade Marks Act, 1999 and the definition is mentioned under Offences under Information Technology.

Indian courts have put a distinction between the Trade Mark and domain name. In the case of Satyam infoway Ltd Vs Sifynet Solutions Pvt Ltd^[3] have observed

“distinction lies in the manner in which the two operate. A trademark is protected by the laws of a country where such trademark may be registered. Consequently, a trade mark may have multiple registrations in many countries throughout the world. On the other hand, since the internet allows for access without any geographical limitation, a domain name is potentially accessible irrespective of the geographical location of the consumers. The outcome of this potential for universal connectivity is not only that a domain name would require worldwide exclusivity but also that national laws might be inadequate to effectively protect a domain name”.

There is a lacuna in laws related to domain name. Trade Mark Act, 1999 expressly says trademarks must be registered within the territory to be able to seek claim under the Act. The Act expressly protects Trademarks.

Registration can be done in various places around the world whereas for domain name registration there is one singular office for the world.

Indian courts have recognized the lacuna but in the absence of an express legislation the courts apply the provisions of Trade Marks Act to settle the disputes related to domain name protection. The court further observed in the same case:^[4]

“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”.

Dispute Resolution

Uniform Domain Name Dispute Resolution Policy (UDRP) is responsible for taking actions on the disputes related to the bad faith registrations.

The processes of UDRP are developed by ICANN (Internet Corporation of Assigned Names and Number).

Under UDRP, WIPO is the leading ICANN accredited domain name dispute resolution service provider and was established as a vehicle for promoting the protection, dissemination, and the use of intellectual property throughout the world. India is one of the 171 states of the world which are members of WIPO.^[5]

A person can file a complaint before the administration dispute resolution service provider listed by ICANN under Rule 4 (a)^[6] which is:

1. If a domain name is ‘identical or confusingly similar’ to the trademark or service mark which belong to the complainant.
2. When the domain name owner/registrant do not have significant interest and right in the respective domain name.
3. When a domain name is registered and is used in bad faith.

Rule 4 (b) has illustrations which are as follows:^[7]

1. Circumstances indicating that the domain name owner/registrant has registered or acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the trade mark or service mark; or to a competitor of that complainant for valuable consideration in excess of its documented out of pocket costs, directly related to the domain name; or
2. The domain name owner/registrant has registered the domain name in order to prevent the owner of the trade mark or service mark from reflecting the mark in a corresponding domain name, provided that it has engaged in a pattern of such conduct; or
3. The domain name owner/registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
4. By using the domain name, the domain name owner/registrant has intentionally attempted to attract, for commercial gain internet users to its web site or other online location by creating a likely hood of confusion with the complainants mark as to the source, sponsorship, affiliation, or endorsement of the domain name owner/ registrant web site or location or of a product or service on its web site or location.^[8]

India have formed its very own registry of domain names by the name INRegistry under the authority of National Internet Exchange of India (NIXI) where the disputes related to the domain name are resolved under IN Dispute Resolution Policy (INDRP).

The Policy has been formulated in line with internationally accepted guidelines, and with the relevant provisions of the Indian Information Technology Act 2000. Under InRegistry, disputes are resolved under .IN Domain Name Dispute Resolution Policy (INDRP) and INDRP Rules of Procedure.

These rules describe how to file a complaint, fees, communications and the procedure involved.^[9] Act does not provide for any legal compensation but the registry took necessary steps to compensate the loss of victims.

Role of Judiciary

Domain names are nowhere defined under any Indian Laws or are covered under any specific Act whereas in academics we still study the concept under Offences under Information Technology. Under Trade Marks Act, 1999 provides two kinds of relief under the Act which are:

1. Remedy of infringement: Trade Mark Act permits a person to avail this remedy only in case the trademark is registered.^[10]
2. Remedy of passing off: No registration is necessary in case of availing passing off remedy.^[11]

Another remedy is provided under ICANN which is arbitration under ICANN rules.

Need for a legislation regarding the domain name protection was majorly sought by the various cases.

The very first case which came up in Indian courts was Yahoo! Inc. v. Akash Arora and Ors^[12] in this case the defendant used ‘YahooIndia.com’ to avail certain services against the domain name ‘Yahoo.com’.

The court observed

“usually the degree of the similarity of the marks is vitally important and significant in an action for passing off for in such a case there is every possibility and likelihood of confusion and deception being caused. When both the domain names are considered, it is crystal clear that the two names being almost identical or similar in nature, there is every possibility of an Internet user being confused and deceived in believing that both the domain names belong to one common source and connection, although the two belongs to two different concerns.”^[13]

In the case of Tata Sons Ltd and Ors. Vs. Fashion ID Ltd^[14], the court held that

“The use of the same or similar domain name may lead to a diversion of users which could result from such users’ mistakenly accessing one domain name instead of another. This may occur in e-commerce with its rapid progress and instant (and the erotically limitless) accessibility to users and potential customers and particularly so in areas of specific overlap. Ordinary consumers/users seeking to locate the functions available under one domain name may be confused if they accidentally arrived at a different but similar web site which offers no such services. Such users could well conclude that the first domain name owner had misrepresented its goods or services through its promotional activities and the first domain owner would thereby lose their customer. It is apparent therefore that a domain name may have all the characteristics of a trademark and could found an action for passing off”^[15]

After that the case of Dr Reddy’s Laboratories Ltd. vs. Manu Kosuri and Ors, came up with similar facts.

In the case of Nestle India Ltd. vs. Mood Hospitality Pvt Ltd^[16], the Hon’ble court held that in case of interim relief/ injunction test of prima facie case is traditionally important along with that I case of trademarks, the comparative strengths of plaintiff and defendants should be considered while deciding.

In the case of Aqua Minerals Ltd vs Pramod Borse and Ors^[17] the Hon’ble court said until and unless the defendant is able to proof his intentions in using the similar domain name are not malafide in name in regards with the existing brands good-will, reputation and value until then the case would be dealt as a matter of cyber-squatting.

The defendant is supposed to provide credible explanation for choosing the certain name for registration as a domain name which is pre-existing in the society.

Challenges and Issues

India failed to adopt modern methodology and elements in dealing with disputes regarding domain name protection in this dynamic society, our slow process of enacting new laws is a drawback for us which is a major reason that we are still following the laws which were enacted during the British rule.

The society has turned upside down since that time but our laws which have been through several amendments are still not modernized sufficiently.

Last two decades we have spent were the most challenging in terms of technology because new technology related crimes are emerging each day and we still have not figured out the cures which is a huge challenge for us.

Our elder generation are having issues in dealing with new technology which are being forced to do everything online under work from home conditions and India was clearly not ready for such huge change.

The current working class in majority of sectors are not well versed with the technology still they tried their best. Similarly as we are not well versed with this newly emerging technology as well as the crimes emerging along with it, we are also not able to tackle the issues.

Conclusion

So, yes we have understood the concept as a nation, we know it exists in the society and we know that we are the subjects. We have ways to curb the crime but we do not have express provisions.

We do not have provisions under Trade Marks Act which expressly deals with domain name protection, we are merely implying those provisions on domain name protection. Those provisions have specifically mentioned the term ‘trade mark’ and domain name is nowhere even mentioned.

Domain name protection laws should have been a subject of Information Technology Act, 2000 as well but the Act itself is not strong due to ambiguous and uncertain nature of the internet, dark web and crimes.

They do not fall under the territorial boundaries and hence any nation cannot claim over the issue in law or issue in fact. Cyber-squatting is a serious and federal crime in many developed countries like America. Mere drawing the distinction between trade mark and domain name is not necessary.

1. AIR 2002 Delhi 243. ↑
2. Cyber-squatting, available at  (Last visited on 22nd August 2020). ↑
3. AIR 2004 SC 3540. ↑
4. Ibid. ↑
5. Trade Mark and Domain name, available at  (Last visited on 23rd August 2020). ↑
6. ICANN, Rule 4. ↑
7. Ibid. ↑
8. Ibid. ↑
9. Ibid. ↑
10. Section 29, Trade Marks Act, 1999 as follows ‘Infringements of Registered Trademarks’. ↑
11. Section 28, Trade Marks Act, 1999 as follows, ‘Rights conferred by registration’. ↑
12. 1999 II AD (Delhi). ↑
13. Ibid. ↑
14. (2005) 140 PLR 12. ↑
15. Ibid. ↑
16. 2010 (42) PTC 514 (Del). ↑
17. AIR 2001 Delhi 467. ↑