CYBERSQUATTING: A BRIEF LEGAL OVERVIEW

Cybersquatting, is a crime against the laws and regulations of cyber law. It can be defined as registering, trafficking in, or using a domain name with bad-faith i.e. mala fide intent to make profit from the goodwill of a trademark belonging to someone else. The cybersquatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.

The term is derived from "squatting", which is the act of occupying an abandoned or unoccupied space or building that the squatter does not own, rent or otherwise have permission to use. Cybersquatting however, is a bit different in that the domain names that are being "squatted" are (sometimes but not always) being paid for through the registration process by the Cybersquatters. Cybersquatters usually ask for prices far greater than that at which they purchased it. Some cybersquatters put up derogatory or defamatory remarks about the person or company the domain is meant to represent in an effort to encourage the subject to buy the domain from them.

The World Intellectual Property Organisation (WIPO) saw a 20 per cent increase in the number of cyber squatting (abusive registration of trademarks as domain names) cases filed in 2005 as compared to 2004. In 2005, a total of 1,456 cyber squatting cases were filed with WIPO's Arbitration and Mediation Centre, according to a WIPO release.

HISTORY:-
The practice that's come to be known as cyber-squatting originated at a time when most businesses were not savvy about the commercial opportunities on the Internet. Some entrepreneurial souls registered the names of well-known companies as domain names, with the intent of selling the names back to the companies when they finally woke up. Panasonic, Fry's Electronics, Hertz and Avon were among the "victims" of cyber-squatters.

ABUSIVE DOMAIN REGISTRATION SYSTEM:-
In the new e-economy it is commercially prudent for a company to have an easily traceable address in the cyber-space. This requires registration of a particular domain name and web site under the domain name system (DNS). However, this practice has spawned a new industry in valuable domain names.

Since the process of registration of domain names is simple and on 'first come, first served' basis, the only thing that should be avoided is the issuance of duplicate domain names. These practices include the deliberate bad faith registration as domain of well-known trademarks in the hope of being able to sell the domain to the owners of those marks (or rivals owners) or simply to take unfair advantage of the reputation attached to those marks. In technical parlance, this is called cyber squatting.

There have been several instances of companies, individuals or governments trying to take generic domain names away from their owners by making false claims of trademark violation. Sometimes they are successful. This practice is called "Reverse Domain Hijacking".

For example, little known Heathrow Land Development in Florida attempted to use their narrow one-class trademark and the UDRP process to acquire heathrow.com.

IN SUPPORT OF CYBERSQUATTING:-
There are several people who advocate pro-squatting policies as well. The major contention is that:-
• When a system of registration exists on a first come first serve basis exists; there is nothing wrong in taking advantage of it to earn money.
• Another argument professed by such people is that since the cyber-squatters usually don’t deal in the same goods that the targeted entity deals in, there is no question of affecting the customer base of the said identity.

These ideas are merely desperate attempts by opportunists who do not wish to be deprived of the chance of making a quick buck. Quite clearly, the impact of such policies would be to create confusion in the minds of consumers.

Developments in the Domain Name Registration System:-
The combined effect of developments such as: the use of 'Whois' privacy services for registrations; the growth in the number of professional domain name dealers and the volume of their activity; the use of computer software to automatically register expired domain names and their 'parking' on pay-per-click portal sites; the option to register names for free for a five-day 'tasting' period; the growth in the number of accredited registrars; is to create greater opportunities for mass registration of domain names.

LEGAL SCENARIO:-
Domain name disputes involving alleged bad-faith registration are typically resolved using the Uniform Domain Name Resolution Policy (UDRP) process developed by the Internet Corporation for Assigned Names and Numbers (ICANN).

In court system, jurisdiction is often a problem, as different courts have ruled that the proper location for a trial is that of the plaintiff, the defendant, or the location of the server through which the name is registered. Countries such as China and Russia do not view cybersquatting in the same way or degree that US law does.

People often choose the UDRP (Uniform Dispute Resolution Process) created by ICANN because it is usually quicker and cheaper than going to court, but courts can and often do overrule UDRP decisions. In Virtual Works, Inc. v. Volkswagen of America, Inc. (a dispute over the domain vw.net), the Fourth Circuit Court of Appeals created a common law requirement that the cybersquatter exhibit a bad faith intent in order to confer liability. This means that domain names bearing close resemblance to trademarked names are not per se impermissible. Rather, the domain name must have been registered with the bad faith intent to later sell it to the trademark holder.

Under UDRP policy, successful complainants can have the names deleted or transferred to their ownership (which means paying regular renewal fees on all the names or risk them being registered by someone else).

Australia is another example - auDA requires anyone registering a .com.au domain to have a valid entitlement for that domain - ie. a registered business name with an Australian Business Number (ABN) issued by the Australian Taxation Office. However, any Australian citizen over the age of 16 can obtain an ABN (which is free) and use it to register as few or as many domain names as they like.

However in the UK, if someone has registered a domain name incorporating a trademark, then the domain name holder could be in breach of section 10 of the Trademark Act, 1994 that states “a person infringes a registered trademark if he uses identical or similar to the registered trademark in relation to identical or similar goods or services".

Using the ICANN Procedure:
In 1999, after assuming control of domain name registration, ICANN adopted and began implementing the Uniform Domain Name Dispute Resolution Policy (UDNDRP) a policy for resolution of domain name disputes. This international policy results in an arbitration of the dispute, not litigation. An action can be brought by any person who complains (referred to by ICANN as the "complainant") that:

• A domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights.
• The domain name owner has no rights or legitimate interests in the domain name, and
• The domain name has been registered and is being used in bad faith.
All of these elements must be established in order for the complainant to prevail. If the complainant prevails, the domain name will be cancelled or transferred to the complainant, but financial remedies are not available under the UDNDRP.

WIPO:-
Recognizing the problems raised by clash between domain name system and trademarks, the World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre has developed an online Internet based system for administering commercial disputes involving intellectual property. This Dispute Resolution Mechanism is unique in that it is designed to be used online both for document exchange and for filling of evidence. However, the original documentary evidence will still be needed to be filled in a physical form. The dispute resolution is simply signed and thus, providing an inexpensive and efficient service and does not in any way seek to take the place of national jurisdiction.
The complainant selects the provider and all costs involved (expected to be approximately US $1000) must be borne by him. A successful complainant’s remedy is limited to requiring the cancellation of the registrant's domain name or the transfer of domain name registration to the complainant.

The procedure will be handled in large part online and is designed to take less than 45 days with a provision for the parties to go to courts to resolve their disputes or contest the outcome of the procedure.

Anti Cybersquatting Consumer Protection Act
The Anticybersquatting Consumer Protection Act (also known as Truth in Domain Names Act), a United States federal law. was sponsored by Senator Trent Lott, and enacted on November 29 of the same year.

METHOD - It makes people who register domain names that are either trademarks or individual's names with the sole intent of selling the rights of the domain name to the trademark holder or individual for a profit liable to civil action. It authorizes a trademark owner to sue an alleged cyber-squatter in federal court and obtain a court order transferring the domain name back to the trademark owner. In some cases, the cyber-squatter must pay money damages.
In order for a trademark owner to bring a claim under the ACPA, the owner must establish

• The domain name registrant had bad-faith intent to profit from the trademark.
• The trademark was distinctive at the time the domain name was first registered.
• The domain name is identical or confusingly similar to the trademark,
The limitation of the Act is the impact it has on settling disputes:
where two parties have a dispute over a domain name, and the domain name owner has a lessor interest in the domain and is willing to settle the dispute, if the domain name owner offers to exchange the domain name for compensation (such as the cost of reprinting letterhead, business cards, and other expenses), that offer can constitute "acting in bad faith to profit from the mark". This makes domain name disputes harder to resolve.

TYPOSQUATTING:-
Typosquatting, also called URL hijacking, is a form of cybersquatting which relies on mistakes such as typographical errors made by Internet users when inputting a website address into a web browser. Should a user accidentally enter an incorrect website address, they may be led to an alternative website owned by a cybersquatter.
• A common misspelling of the intended site: exemple.com
• A misspelling based on typing errors: xample.com or exxample.com
• A differently phrased domain name: examples.com
• A different top-level domain: example.org
Once in the typosquatter's site, the user may also be tricked into thinking that they are in fact in the real site; through the use of copied or similar logos, website layouts or content. Sometimes competitors of the victim site will do this.

Example of typosquatting

The National Austrian Public Service Broadcaster "ORF" was typosquatted by 0rf.at a net art site.

STATISTICS:-
According to WIPO report Geneva, March 12, 2007
WIPO/PR/2007/479:
• The number of cybersquatting disputes filed with the World Intellectual Property Organization (WIPO) in 2006 increased by 25% as compared to 2005.
• In 2006, a total of 1,823 complaints alleging cybersquatting were filed with WIPO's Arbitration and Mediation Center, representing the highest number of cybersquatting cases handled by WIPO since the year 2000.
• A total of 9,389 (97% of total cases) UDRP cases received by the Center have so far been resolved.

Cyber law - Blogs, News and Articles : The Internet, Cyber World Technology - India International - Visit www.cybersmart.in

GLOBAL CYBER-SQUATTING CASES

Panavision International, L.P. v. Toeppen,
In December 1995, Toeppen applied for and received registration of the domain name panavision.com. Panavision International ("Panavision") is a well-established manufacturer of camera and filming equipment. Panavision attempted to register panavision.com, but was informed of Toeppen's registration of the domain name. Panavision notified Toeppen of its desire to use the panavision.com domain name, and Toeppen offered to relinquish the domain name for $13,000. Panavision refused to pay, and Toeppen, in response, also registered panaflex.com.
Panavision sued Toeppen on a federal trademark dilution claim.
Federal District Court granted summary judgement in favor of Panavision, enjoined Toeppen from further use of the web site, and ordered him to relinquish the registration of the domain names to Panavision.

Federal District Court's findings:
(1)Panavision was a famous mark.
(2) Toeppen's business of registering domain names to be sold later qualified as a commercial use.
(3) Toeppen's use diluted Panavision's mark by preventing it from identifying and distinguishing its products on the Internet.

Marks & Spencer PLC vs. One in a Million
The High Court of Justice, Chancery Division, enjoined the activities of two cyber dealers and their related companies, who had obtained and were offering for sale or "hire", numerous domain names containing well known marks. In this group of cases, the Court enjoined "the threat of passing of" (a threat which would become a reality if an offending domain name was sold to and used by a stranger to the trademark owner), issuing a warning to cyber squatters: "Any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organization must expect to find himself on the receiving end of an injunction to restrain the threat of passing off, and the injunction will be in terms which will make the domain name commercially useless to the dealer”.

INDIAN CYBER-SQUATTING CASES

Yahoo! Inc. v. Akash Arora
Probably the first reported Indian case is, wherein the plaintiff, who is the registered owner of the domain name "yahoo.com" succeeded in obtaining an interim order restraining the defendants and agents from dealing in service or goods on the Internet or otherwise under the domain name "yahooindia.com" or any other trademark/ domain name which is deceptively similar to the plaintiff's trademark "Yahoo
Although, as on the date of writing, there are very few reported judgments in our country, newspaper reports and information from reliable sources indicate that there are at least twenty-five disputes pertaining to domain names pending before the Delhi High Court itself.

Tata Sons Ltd Vs. Ramadasoft
Tata Sons, the holding company of India's biggest industrial conglomerate, the Tata Group, won a case to evict a cyber-squatter from 10 contested internet domain names. Tata Sons had filed a complaint at the World Intellectual Property Organisation.
The Respondent was proceeded ex-parte. The Panel concluded that the Respondent owns the domain names. These domain names are confusingly similar to the Complainant’s trademark TATA, and the Respondent has no rights or legitimate interests in respect of the domain names, and he has registered and used the domain names in bad faith. These facts entitle the Complainant to an order transferring the domain names from the Respondent.

Sbicards.com vs Domain Active Property Ltd.
Sbicards.com was ordered by the World Intellectual Property Organisation to be transferred to the Indian Company from an Australian entity, which hijacked the domain name hoping to later sell it for a hefty sum to the State Bank of India subsidiary. The panel accepted SBI Card counsel's argument that "the Australian company was in the business of buying and selling domain name through its website.

Mahindra & Mahindra Limited (M&M)
In M&M’s case, a young student residing in Andhra Pradesh, registered the domain names, mahindra.com, mahindra.net and mahindra.org, in his name.
M&M appealed to the WIPO stating that the name Mahindra was a registered trademark in India and the United States. The panellists ordered that the domain names, be immediately transferred in favour of the Indian company.

Titan Industries Ltd. Vs. Prashanth Koorapati & Ors
The Delhi High Court granted an ex-parte ad-interim injunction restraining the defendants for using the name "TANISHQ" on the Internet or otherwise and from committing any other act as is likely to lead to passing off of the business and goods of the defendants as the business and goods of the plaintiff.

Bennett Coleman & Co Ltd Vs. Steven S Lalwani
Since 1996, the complainant has held the domain names, www.economictimes.com, using them for the electronic publication of their respective newspapers. The complainant had registered in India this mark for literary purposes.
However, in 1998, Steven S. Lalwani, USA registered the same domain name.
The WIPO judgement made it clear that the complainant have a very substantial reputation in their newspaper titles arising from their daily use in hard copy and electronic publication. It was also categorically held that the registration and use of the domain names by the respondents is in bad faith in the sense that their use amounted to an attempt intentionally to attract, for commercial gain, Internet users to their web sites by creating a likelihood of confusion with the complainant’s marks as to the source, sponsorships, affiliation or endorsement of those web sites and the services on them.

Rediff Communications Ltd., v Cyberbooth
In Rediff Communications Ltd., v Cyberbooth, plaintiff, the owner of the well-known portal and domain name rediff.com filled for injunction against the defendant, registrant of the domain name "rediff.com". The judge was satisfied that there was a ‘clear intention to deceive’ and granted interim relief to the plaintiff. The judge stated, "A domain name is more than an Internet address and is entitled to the equal protection of trademark."

Conclusion:
As discussed, trademark law has recently drastically broadened to accommodate domain name disputes. However, trademark law should not be broadened to give trademark owners rights that they otherwise are not entitled to. The question is whether the law will eventually give large trademark owners property rights in domain names i.e. the ability to exclude others from using them. In determining whether the trademark laws should reach so far, perhaps it is necessary to revisit the purpose of trademark protections.

Trdemarks are protected to provide consumers with accurate information about the goods and services the mark represents, and to give companies incentives to invest in their marks and increase quality control. Trademarks therefore lowers consumer search costs and promote the economic functioning of the market. Marks themselves are not protected, but the law protects the goodwill the marks embody.

Allowing monoploy rights in domain names will discourage companies from using names that are already taken. Tarditional economic justification for trademark law rest on the premise that there is an infinite number of marks available. However, there are only a limited number of domain names available. Recent estimates indicate 97% of the names in Webster’s Dictionary have already been registered as domain names.

Another area of concern with such a right is that it would allow trademark owners to prclude others from using not only one but several marks. It is becoming common practice for companies to register all domain names they can think of that contain their company name.

For example- Exxon currently holds the rights over more than 120 domain names incorporating the word ‘EXXON’.
The present law seems to promote protection of large companies more who want rights in every possible variations of their name.
From a realistic point of view, the current expansion in law gives trademark owners a significant amount of leverage. For example, many times people with legitimate interests in their domain names cannot afford to flight trademark owners. Naturally, this will force many to simply turn over their rights in order to avoid ‘corporate bullying’.


BIBLIOGRAPHY:

• ‘Law relating to patent, trademark, copyright, design and geographical indications’- B. L. Wadehra, Universal Law Publishing Co. Pvt. Ltd.
• ‘Intellectual Property Law in India’- P.S. Narayan, Gogia Law Agency, Hyderabad.
• ‘Law of Intellectual Property’- S.R. Myneni, Asia Law House, Hyderabad.
• ‘Protecting Intellectual Property in the Internet Age’- Karnika Seth (Cyber Lawyer), Seth Associates.
• ‘Regulating Intellectual Property Rights on the Internet’- Aashit Shah, Government Law College Law Review, 1999-2000.
• ‘Reinventing a sensible view of trademark law in the information age’- Melinda S. Giftos.
• ‘Cybersquatting is a big business in India’- www.indiaforensic.com
• www.iprsonline.org
• www.wikipedia.com

By: Rima Bhardwaj, Pune
Mobile: 09881393944, 09234511059

Occupation: Student of IVth B.S.L. LLB, ILS Law College, Pune.
Email: rimabhardwaj@legalserviceindia.com

By: Dushyant Upadhyay Pune,
Mobile: 09922738121
Occupation: Student of Vth B.B.A. LLB, Symbiosis Law School, Pune.