The article is written by Shruti Malviya from Team Vakalat Today.
Introduction
The Internet revolutionized business activities by opening the gateway to a worldwide electronic marketplace in which domain names would uniquely identify any brand or service. As its usage by various entities increased, so did the need to protect digital identity. In this regard, the legal doctrine of passing off emerged as an important tool in connection with the safeguarding of domain names from unauthorized use and misrepresentation in relation to e-commerce. The following article delves into the details of passing off actions as a means of protecting domain names and provides a comprehensive insight to readers who wish to learn about the confluence of intellectual property and Internet law.
Passing off is a common law tort that has long dealt with situations in which one party misrepresents its goods or services as another’s, potentially misleading consumers and causing damage to the goodwill associated with the original brand. This concept has grown in the domain of cyberspace to include within its gambit domain names, which have emerged as more than mere web addresses; they are know-how of how companies identify themselves and succeed commercially. The reason this would confuse customers is that the domain name will come very close to an already established brand, thereby causing a loss to its goodwill and financial credibility
The legal framework, regarding passing off actions in relation to domain names, is very complex and differs from jurisdiction to jurisdiction. For example, the courts in India have finally started recognizing that domain names are also trademarks and, as such, passing off claims can be maintained even if there are no registered trademarks. Landmark cases, such as Yahoo! Inc. v. Akash Arora[1], have decided that the principles of trademark law apply equally to domain names, thereby allowing for legal action against cybersquatting or any other form of misrepresentation over the Internet.
More importantly, various international bodies have put in place policies and guidelines that address domain name disputes, like the Internet Corporation for Assigned Names and Numbers and the World Intellectual Property Organization. These frameworks are supposed to balance the rights of trademark holders against fair competition in a digital marketplace. As such, with continued growth in the use of the Internet, there will be growth in the number of legal mechanisms designed to protect domain names.
Many international bodies — ICANN and WIPO, for examples have created rules to solve domain name disputes. These frameworks try to strike a balance between the rights of trademark holders and competitive advantages in the market.
In conclusion, protection of domain names using passing-off actions is very important in the intellectual property law for e-commerce.
Understanding Domain Name
The domain name is a label string that defines the autonomy over or control of an area within the internet. They are employed by DNS, which is a standard for network addresses on the internet and also in applications specific naming and addressing. A domain name stands for human readable WWW address of the website hosted on it. Domain names are arranged into subordinate levels (subdomains) of a root domain identified as DNS and which does not have a name. The topmost group of domain names is known as TLDs i.e., generic top-level domains (gTLDs), e.g., com, info, netand org, etc., and ccTLDs (country code top-level domains). A web page’s location on the Internet is determined by its domain name. A URL (Uniform Resource Locator), also called a domain name.
Every website has a unique number associated with it called an IP address. They are used by your computer to locate and connect with the server that host a website data. When people type a domain name into their browser search bar, it sends out a query over the internet to what we call DNS servers. The DNS replies with the hosting server IP address of website so that we can access it. IP addresses are too difficult to remember and hence domain Names were born. This is why for the machines on which web developers deploy browser-facing code to be able to name it and make sense of what the humans want, a website must first have been named.
Meaning of Passing Off
Passing off goods is the act where a trader tries to pass his items as originating from another merchant. For example, it entails manufacturing a product that closely resembles typical toothpaste and slapping on an indicator such as ‘Colmate’ to mislead consumers into buying the counterfeit Colgate.[2]
In this regard, some of the most celebrated readings are dated back to Singer v. Loog [(1881)18Ch D 395 at 412][3] where it was pronounced that “No man shall be entitled to refer his goods as being the products of another subject and no person is not allowed to connect any mark by means whether without immediately making when direct false representation himself onto a buyer with whom he does business upon terms so closer per such immediate ineffective misinformation who purchases from him enables if sales may be mistaken or could turn outlying either fake indication towards someone else whose final purchaser”.
Legal Framework of Passing Off
Somebody that is passing their products or business as and for the products or even company associated with someone else will be sued, criminally billed (if making use of documents which are required to expenses can cause a lawyer within one degree), in addition, fined. In order to succeed in a passing-off action, the Plaintiff has to establish that[4] :
- In the course of his business, the defendants made a statement to customers about the goods or services they supplied.[5]
- The false statement was intended to hurt his trade, business or goodwill.[6]
- There is harm to the business or goodwill of the person.[7]
The principle of passing off can be deduced from the fact that the broad off is: In the interest of fair trading. The law has been used to sort out competing rights in certain instances. Trading should be honest and not just non-injurious, but there has been no occasion to look for solutions to that principle.[8]
Key Elements of Passing Off Action
The elements of passing off action are a common law remedy.To successfully establish a passing off action concerning a domain name, the plaintiff needs to demonstrate the following elements.
1. The false representation must have been made in the course of the trade.
2. The person must prove that he has goodwill with the domain name or trademark.
3. The existence of confusion must be proven that it will confuse consumers about the origin of the goods or services offered.
4. Damage is the amount of loss to the business or goodwill that the misrepresentation will cause
Passing-off” under the LAW OF TRADE MARKS [Sec. 27(2)]:-
The law that allows for action in case of passing off an unregistered trademark is provided in subsection 2 of section 27 of the Trade Marks Act, 1999. The provision reads:[9]
‘No person shall be deprived or restricted in any way to bring any action against another person for passing off goods or services as his own goods or services, or those of another person who has the rights, and obtain a remedy for such an act.’[10]
Therefore, under Trademarks Law, this defense operates for both registered and non-registered trademark cases. In Cadila Health Care Ltd. V. Cadila Pharmaceutical,[11] it was stated that “the TMM Act, 1958 contains provisions regarding Sec. 27 (2) which states that the infringement proceeding is only allowable as far as protection conferred by statutory protections afforded to registered marks is concerned while the claim of passing off can still be maintained even if the trademarks are not registered.”
Case Law Illustrating Passing Off in Domain Names
Certain principal cases that have shaped the passing off actions have also traced the legal provisions as to the domain names where misrepresentation, confusion and goodwill ought to be protected. Here are two pivotal cases that illustrate the application of passing off in the context of domain names:Here are two significant cases which will elaborate the above notion of passing off in domain names:
- Yahoo! Inc. v. Akash Arora[12]
Internet media network, Yahoo! Inc. sued Akash Arora, who had purchased the domain name yahooindia.com, Yahoo! argued that perhaps consumers may have been misled into going to Arora’s site thinking it was part of the Yahoo! group because of the similarity of the name. In its judgment, the Delhi High Court was prepared to recognize that principles of passing off could be applied to domain names. The court therefore emphasized the connection between the two domain names and concluded that this caused confusion to the consumers hence detriment to Yahoo! and its reputation and reputation. This case defines the passing off laws for domain name which has an influence with the protection of domain names as the latter has been compared to the protection of trademarks.
2.Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.[13]
Another landmark case is Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd. where Supreme Court of India elaborated the laws pertaining to passing off in context of domains. Satyam Infoway owned the domain name ‘satyamonline. com ‘ and was keen to safeguard it from Sifynet, who had already registered another similar domain name.
Reputation: The plaintiff has to prove that the domain name under dispute has amassed goodwill and recognition in the relevant market.
Misrepresentation: The defendant must be proven to have employed a domain name that is likely to deceive and create confusion as to the identity of the owner of the business.
Likelihood of Confusion: For the domain name to be considered an infringement on the trademark, there must be a probability that the consumers will be confused about the source of the goods or services.
The Supreme Court decided in Satyam Infoway’s favour holding that since the domain name is a valuable property right like a trademark one is entitled to protection against passing off. This case further affirmed the idea that business have to guard their internet presence to ensure that identity thefts do not occur and lead to complications and confusion among customers to the detriment of the business’ reputation.
3.Acqua Minerals Ltd. v. Pramod Borse[14]
For instance, Bisleri, a trademark registered under the name Acqua Minerals, a problem arose when Pramod Borse bought the domain name “bislari. com”. It was established by the Delhi High Court that once a trademark is registered, no one has any legal right to use the said trademark as a domain name save for the owner of the trademark. The court held this as the reason for confusion since the two domain names appear very close hence creating an instance of likelihood of confusion. This case brought the fact of passing off in the domain name on the base of trademark protection and illegal use of the likenesses of the domain name and thus the protection of the goodwill connected with the trademark.
4.Rajat Agarwal v. Spartan Online[15]
Here, the court looked at the provisions that allowed the use of domain names for commercial functions that may confuse consumers. Rajat Agarwal had gone ahead and register a domain name that was very much similar to that of Spartan Online. As to the domain name, the court stated that domain names cannot be allowed to be used as tools of commerce that assist clients to gain access to commodities or services while they are being deceived about the origin of such commodities or services. The judgment also stressed that domain names should be unique and should not cause confusion to customers, thus following the passing off doctrine.
Remedies Available for Passing Off
There are also provisions for some reliefs in passing off actions which are as follows: They are laid down under Section 135 of Trade Marks Act.[16]The following[17] are the reliefs available in an action for passing off :
1. an injunction with conditions;
2. the plaintiffs may opt for account of profits or damages;
3. an order to obliterate or sanitise the offensive labels and marks from the surface.
There are other reliefs, that are:
Civil Remedies
1. Injunctions: The court can order a permanent or temporary injunction that will restrain the infringing party from using the domain name giving rise to the confusion. There is a permanent injunction which may cover a long time up to the docketing of a case while sometime a temporary injunction may be granted in the process.
2. Damages: The passing off may lead to the award of monetary damages in favour of successful claimants where they are able to prove losses. These include the lost of profits and the loss of business goodwill.
3. Account of Profits: Another remedy the court can award is to make the infringer to pay any profits the he/she has made from the use of the domain name. Pursuant to this remedy, the infringer is prevented from having any gains out of his wrong Doing.
4. Delivery Up or Destruction: The subject matter may be delivered up or destroyed by a court’s order where it includes domain names and the branding which confusingly resembles the complainant’s brand.
5. Transfer of Domain Name: Where the domain name is determined to be infringing, the court may make an order for the transfer of the domain name to the owner of the infringed name, which makes for the restoration of the original party’s online identity.
Criminal Remedies
- Imprisonment and Fines: According to the Trademarks Act 1999 crimanial case may be filed for infringement of a trademark. The offenders may be sentenced to imprisonment not below six months, but which may attract up to three years imprisonment besides fines which range from INR 50000 up to INR 200000. This acts as a discouragement against the infringement of trademarks including those involving domain names.
International Perspectives on Domain Name Protection
United States
In the USA domain names are registered under common law of passing off which extends protection on the basis of trademark law. Particularly, the Anticybersquatting Consumer Protection Act (ACPA) defines the registration of the domain names identical or confusingly similar to trademarks. This law enables the proprietor of a trademark to approach a court of law for damages against an individual who registers domains in cyberspace with the objective of using that trademark’s reputation for his personal gains.
European Union
The European Union has developed a stable system of law to protect various attributes of the intellectual property including the domain name. The Enforcement Directive comprises certain provisions according to which the owners of trademarks are entitled to act against domain names which are in violation of their rights. According to the EU, its members should be prepared to work together to reduce cases of international domain name disputes affecting their countries.
India
The legal position for passing off actions relating to domain names in India is still developing. The civil remedy for passing off are contained in the Trademarks Act 1999. Some of the distinctive examples are the Yahoo! Inc. v. Akash Arora cases through which the courts have affirmed application of trademark law to domain names. The Indian judiciary has laid great emphasis on the principle that famous trade marks are as vulnerable to abuse in the domain name registrations..
World Intellectual Property Organization (WIPO)
WIPO has been instrumental in dealing with domain name disputes anywhere in the world mainly through its UDRP. This policy brings ways to resolve domain names dispute that is similar or resembles the registered trademark. The UDRP is envisage to provide quick and cheap approach to the international brand owners to contest the registration that is in violate of their rights to the trademark without the need to go to a court of law.
Conclusion
A significant component of the present and future legal protection of brand assets is the legal doctrine of passing off actions, as the domain name is an essential component in the electronic environment. Since the reliance on the web presence by businesses becoming as important as ever, there are strong possibilities of consumer confusion resulting from similarity in domain names impact strongly on brand image and reputation.
Passing off acts as a useful legal tool that helps businesses to protect their goodwill against such third parties who seek to pass off other businesses’ domain names in the market. All the cases highlighted demonstrate that courts have accorded domain names as properties that deserve protection in the same way as trademarks. The available remedies such as injunctions, damages and transfer of domain names place the workings of a company’s hands and allows the business to fight infringers and retain its identity on the internet.
In light of current developments in relation to the use of the Internet, the laws should also be changing. Trademark protection and domain names: the correlation will remain crucial for handling new problems as cyber-squatting and abuse of the domain names. It is necessary for employees of businesses and corporations to be extremely careful with domain names and where possible consult their attorneys to litigate against any passing off.
Therefore, getting to know such a concept as passing off protection enhances the armory of knowledge that may ensure that businesses protect their innovations and, at the same time, strengthens the principles of fair fighting in the sphere of the digital marketplace. In this matrix, the principles of passing off will continue to hold their crucial rule to prevent creations in brands and make the distinction clear for consumers as they continue to struggle in the digital environment.
[1] 1999 PTC 1920 (Del)
[2]BL Wadehra, Intellectual Property, New Delhi, p.175, Universal Law Publishers, 2007.
[3]P. Narayanan, Intellectual Property Law, Kolkata, p.212, Eastern Law House, 2001.
[4]Lord Diplock in Erven Warnik v. Townend, cited in Law Relating to Intellectual Property Rights,pg.154Allahabad, Central Law Publications, 2008.
[5]Ibid.
[6]Ibid.
[7]Law Relating to Intellectual Property Rights, ibid
[8]P. Narayanan, Intellectual Property Law, Kolkata, p. 214, Eastern Law House, 2001.
[9]Meenu Paul, Intellectual Property Laws, Faridabad(Haryana), pg.344, Allahabad Law Agency, 2004.
[10]Ibid.
[11]AIR 2001 SC 1952, cited in Intellectual Property Laws by Meenu Paul, ibid.
[12] 1999 PTC 1920 (Del)
[13]AIR 2004 SC 3540.
[14] AIR 2001 Delhi 467.
[15]AIR 2017 (NOC 846) 287.
[16]P.Narayanan, Intellectual Property Law, Kolkata, pg.235, Eastern Law House, 2001.
[17]Ibid.
