Cybersquatting: Meaning and Forms

Cybersquatting occurs when someone registers, sells or uses a domain name that contains an existing company’s trademark or service mark, usually with the intention of selling the domain name to the trademark owner for a profit. This includes any time someone registers, sells or uses a domain name to profit from a brand’s goodwill. Businesses and brand owners have to use their favourite domain name by buying it from cybersquatters for big bucks, as there is no way to use two domain names that are pronounced exactly the same. Aside from that, they often have to knock on court doors to bring cybersquatters to justice and condemn their illegal and unethical actions.

Types of Cybersquatting

  • Typosquatting: Typosquatting is often referred to as ‘URL hijacking’ or a ‘sting site‘ is a type of Cyber Squatting. Typosquatters convert the common mistakes made by internet users while typing a web address into a web portal. To trick the web users, the typosquatters may also fabricate a website that resembles the original site by using a similar layout, color schemes, logos, and content.
  • Combosquatting: Combosquatting does not use misspellings but rather affixes a word or a series of words to popular and known trademarks.
  • Identity Theft: In identity theft, cybersquatters purchase a web portal that was accidentally not renewed by the previous owner. After registering the domain names that are lapsed, cybersquatters may link them with websites that are a clone of the websites of the last name domain owners. This way, cybersquatters misguide the visitors of their websites into trusting that they are visiting the websites of the previous domain name owners.
  • Name Jacking: Name jacking refers to registering domain names in the name of an individual, usually a dignitary or a public figure. Name jackets benefit from the web traffic related to the domain built in the name of particular famous individuals.
  • Reverse-Cybersquatting: Reverse-cybersquatting, also known as reverse domain name hijacking and commonly abbreviated as RDNH, refers to an attempt to obtain a domain name lawfully owned by another person.

What is a Domain Name?

A domain name is a distinctive address for a website. Usually, it consists of a website name and a site name extension. An unforgettable domain can strengthen your disapproval and facilitate your audience to realise your website. The equivalent of a physical address for your website is a domain name. Instead of using your site’s internet protocol (IP) address, it is easier for users to find it. The internet infrastructure relies heavily on domain names, which are made up of a name and an extension.

Importance of Brand Equity and Value of Goodwill

Brand identity aids in the development of a brand’s own distinct position and differentiation from competitors in the market. This differentiation also aids in the development of a positioning strategy and the acquisition of a devoted consumer base.

Goodwill has a significant impact on value since it mitigates the chance that a company’s profitability will suffer once it is sold. The difference between the acquisition price of the business and the fair market value of the tangible assets included in the sale is the goodwill value.

Laws in India

Unlike many developed countries, India has no law that can protect domain names. Therefore, cybersquatting cases are resolved under the Trademarks Act 1999. In the absence of a specific statute, the Indian courts extend the scope of the Trademarks Act 1999 to such conflicts, given the gap in such specific issues. In the case of Satyam Infoway Ltd. v. Sifynet Solutions Pvt Ltd.,  the Court observed that “As far as India is concerned, there is no legislation that explicitly refers to dispute resolution in connection with domain names. But although the operation of the Trade Marks Act, 1999 itself is not extraterritorial 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.”

Remedies for cybersquatting under trademark law

Cybersquatting satisfies all the particulars of a crime as well as a civil wrong. There are two ways to bring legal redress against a cybersquatter: a lawsuit under the Anti-cybersquatting Consumer Protection Act (the “Act”) or using the Internet Corporation of Assigned Names and Numbers (ICANN) international arbitration system.

Case law:

Yahoo!, Inc. vs Akash Arora & Anr. on 19 February 1999

Relevant Facts

The present case raised an important legal issue relating to the issue of passing off under the Trademark Act in India. In the present case, Yahoo! Inc., the plaintiff, is a well-known American web service provider known worldwide for providing web-based services. They have been a registered company since 1995 and had their trademark registered in 69 countries, India not being one of them.

In the present case, Akash Arora, the defendant, began providing its web-based services using a trademark phonetically similar to that of the plaintiffs. Yahoo Inc. filed a lawsuit seeking a permanent injunction to prevent the defendants from continuing their business under the controversial domain name “Yahooindia.com” or other similar names. The plaintiff also filed a request for an injunction under CPC Order 39 Rules 1 and 2 to prevent the defendants from using the “Yahooindia.com” domain name.

Issue:

  • Whether a website name is protected under the Intellectual Property Right or not?
  • Whether the defendant’s act in registering the name Yahoo India to pass off services almost like those offered by Yahoo Inc is an infringement of the plaintiffs’ trademark and amounts to passing-off under the relevant sections of the Trade and Merchandise Marks Act?

Contentions:

Plaintiff’s attorney held that the “Yahoo” trademark and the “yahoo.com” domain owned by Plaintiff were well-known trademarks and had acquired “a distinctive reputation” and “goodwill,” that is why the Defendants is using Yahooindia’s domain name, presenting its products and services as those of the plaintiff because “yahoo India” was a trademark “identical and deceptively similar” to the plaintiff’s trademark. The attorney argued that the plaintiff’s domain name or trademark was equally protected from an act of identity theft as it was from trademark infringement. By taking a deceptively similar trademark and copying the plaintiff’s domain name overlay, the defendant attempted to pass off its service as that of the plaintiff. To substantiate this, the lawyer argued that the users knew that the companies use the same domain name on the Internet as their trademark and also have the name of the country in the domain, and therefore tried to use the plaintiff’s services, users easily land on the defendant’s domain. Finally, the attorney argued that the fact that the defendants worked in the same industry as the plaintiff showed that the assumption of a deceptively similar name was unfair.

Defendant’s counsel downplayed the plaintiff’s allegations, finding that the application of the provisions of the Trademark Act was limited to goods and, therefore, not applicable in the present case. The attorney stated that the trademark/domain name “Yahoo!” owned by the plaintiff was not registered in India and therefore cannot bring an infringement action. In addition, it was determined that an interim action could not be brought as the services provided by Defendant and Plaintiff could not be described as “goods” under Indian Trademark Law. The lawyer further stated that the controversial word “Yahoo” could be found in a dictionary and was therefore devoid of any distinctive character. The attorney went on to say that the defendant used a disclaimer and that there was no likelihood of fraud, implying that it was not a simulation. Counsel also refuted the plaintiff’s argument, claiming that people using the
Internet was educated and “technically skilled“, and therefore no user would go to the defendant’s website if they intended to visit the plaintiff’s domain.

Rule of law:

When a defendant conducts business under a name sufficiently similar to that under which the plaintiff conducts business. That name has acquired a good reputation; the general public is likely to believe that the business of If the defendant is the plaintiff’s business or a branch or department of the plaintiff, the defendant is liable for an action for intervention.

Judgement with Reasoning:

In the ruling, the court found that the companies’ domain name created their internet presence and found that the plaintiff’s domain was Yahoo.com, which was not registered in India but was popular in India for being one of the first provisions of web directory services. The Court then discussed the Defendants’ first submission, which focused on the point that Plaintiff’s “Yahoo” domain name is associated with a service and not.

Goods, while Sections 27(2) and 29 of the Trade and Merchandise Marks Act. The court accepted the defendant’s contention that the present case was not an infringement claim but disagreed with the counsel’s view that there was no fraud. The court relied on several judgments and on the comment of Fr. Narayan that defines the law of passing off as the principle that restricts the use of a name that can mislead people into believing it is in some way related to someone else’s business. The court mentioned the case of Monetary Overseas v. Montari Industries Ltd.; 1996 PTC 42, where it was held that “When a defendant does business under a reputation which is sufficiently on the brink of the name under which the plaintiff is trading which the name has acquired a reputation and therefore the public at large is probably going to be misled that the defendant’s business is that the business of the plaintiff, or maybe a branch or department of the plaintiff, the defendant is responsible for an action in passing off.

The court then discussed the counterfeiting elements and whether or not they were met in the present case. Based on the case of Ellora Industries v. Banarsi Dass and Ors. the court found that in order to prove counterfeiting, the plaintiff had to demonstrate the existence of his business reputation or good faith. In addition, the court also relied on the case of Ellora Industries and Lord Green M.R.’s remark to confirm that the existence of the goods was not necessary to flaunt the usurpation. If both parties Were in the same industry, the damage possible if the trademarks/domain names attacked were deceptively similar.

After determining that the services could be counterfeit, the court found that the plaintiff’s domain name “Yahoo!” had gained immense popularity worldwide. Since the plaintiff’s services were provided over the Internet to users who accessed it through the domain name accessed, it was essential to protect the domain name from being copied. In the present case, the defendant’s name was almost identical to the plaintiff’s domain name, so that there was immense potential for confusion and deception for an Internet user. The court also refused to accept the defendant’s contention that Internet users were experienced and therefore not duped. The court said in this regard that even if a person has been enlightened via the Internet, he can be misled since the information provided on the defendant’s website is similar to that of the plaintiff.

In addition, the court found that the plaintiff used regional names such as Yahoo. FR (France) and Yahoo.CA (Canada). Therefore, the defendant’s use of the name “yahoo India” is intended to create confusion. Finally, the court refused to accept the defendant’s contention that the word “Yahoo” is a dictionary word and therefore commonly used by other companies.

The court argued that “Yahoo!” had acquired “distinctiveness” and “uniqueness,” and most people associated the word with the plaintiff. In the face of these authorities, the court accepted the prima facie evidence presented by the plaintiff and issued an injunction against the defendants, barring them from operating under the name “Yahooindia.com” or any other name-bearing “yahoo!“.

Analysis

This case is a landmark case of cybersquatting in India. It was the first time that the Delhi High Court ruled that a registered website name is similar to the trademark, giving it the same protection. Yahoo Inc. alleged that Akash Arora took over the Yahoo domain name in order to offer services similar to those of Yahoo Inc. and tried to capitalize on the goodwill generated by Yahoo Inc since there was a high probability that that an Internet user would be confused and misled. Believing that both Yahoo and Yahoo India domain names are owned by Yahoo Inc. Therefore, Yahoo Inc. argued that Akash was responsible for the forgery.

Like the two brands/domain names, “Yahoo!” Akash was blamed for the counterfeiting and prevented from using the deceptively similar domain name. In this case, the court’s decision is based on the reasoning that if the value of a name lies solely in its resemblance to another organisation’s name or trademark, the public is likely to be misled by the use of that name, and such an act would allow this pass. The court clarified that domain names are entitled to protection against imitation and infringement bypassing the distinctive test by confirming the above points.

Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.

Author

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    Tarannum Bose is a Law student pursuing BBA LLB (Hons) from Amity Law School, Kolkata. She is proficient in deep and accurate research with a quick turnaround. She has prior experience in article writing and hopes to further develop her article writing finesse.