Cyber Squatting Essay

Cyber-squatting is a derogatory term and means 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. Cyber-squatters usually ask for prices far greater than that at which they purchased it. Some cyber-squatters put up derogatory 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 cybersquatting (abusive registration of trademarks as domain names) cases filed in 2005 as compared to 2004. In 2005, a total of 1,456 cybersquatting cases were filed with WIPO’s Arbitration and Mediation Centre, according to a WIPO release.

Many cyber-squatters also register many variants of a popular trademarked name, a practice known as typosquatting. The practise 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. Opportunities for cybersquatters are rapidly diminishing because most businesses now know that nailing down domain names is a high priority. Common examples of cybersquatting include the reservation of sites that include the names of celebrities or companies. This guarantees the cyber-squatters a profit whenever a celebrity or company decides to set up an official Web site and needs that domain name.

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A 1999 law and an international arbitration procedure crackdown on people looking to profit from other people’s trademarks. If a person owns a trademark and finds that someone is holding it hostage as a domain name until the owner of the trademark pays a large sum for it, the owner of the trademark is the victim of cyber-squatting. Amitabh Singhal, Acting CEO of National Internet Exchange of India (NIXI), says that all domain names, except those which have been reserved for use by the Government, constitutional bodies and the registry, are open for registration on a first-come-first-served basis. This is standard global practice. The Electronic Commerce Bill, which has been tabled before the Indian Parliament, does not deal with the issue of cybersquatting. The imperative need of the hour is therefore for the legislature to catch up with the technical developments and pass a separate law prohibiting cybersquatting or any other malafide registration of a domain name.

In India in the absence of requisite cyber laws to prevent cyber-squatting, the cases involving cyber-squatting are decided under the relevant provision of trademark laws. 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”. Recognizing the problems raised by the clash between the 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. In October 1999, the Internet Corporation for Assigned Names and Number (ICANN) (the current administrator of the .com, .org and .net domain name systems) adopted the uniform name domain dispute resolution policy to clarify its position and to cut the cost and number of lawsuits over domain name disputes. In the lines of the final WIPO report of internet domain name resolution, the policy to which all domain name registrations now adhere is one, which attempts to bring about a settlement of domain name disputes. Under the policy in cases involving cyber-squatting, the complainant can (but need not) invoke mandatory administrative procedure (hereinafter called the procedure) before one of the administrative dispute resolution service providers approved by ICANN.

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. In an effort to curb cyber-squatting US has also passed an Anti-cyber-squatting Consumer Protection Act (ACPA) in 1999. Fighting Under the ACPA. The Anti-cyber-squatting Consumer Protection Act (ACPA) enacted on November 29, 1999, 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 to stop a cyber-squatter, the trademark owner must prove all of the following:

• 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,
• And the trademark qualifies for protection under federal trademark laws — that is, the trademark is distinctive and its owner was the first to use the trademark in commerce.

If the person or company who registered the domain name had reasonable grounds to believe that the use of the domain name was fair and lawful, they can avoid a court decision that they acted in bad faith. In other words, if the accused cyber-squatter can show a judge that he had a reason to register the domain name other than to sell it back to the trademark owner for a profit, then a court will probably allow him to keep the domain name. Uniform Domain-Name Dispute Resolution Policy. The Uniform Domain-Name Dispute Resolution Policy (UDRP) has been adopted by ICANN-accredited registrars in all TLDs (.aero, .biz, .com, .coop, .info, .museum, .name, .net, .org, .pro). Dispute proceedings arising from alleged abusive registrations of domain names (for example, cybersquatting) may be initiated by a holder of trademark rights. The UDRP is a policy between a registrar and its customer and is included in registration agreements for all ICANN-accredited registrars.

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. Resolution of the conflict. A statistical examination of Domain Name conflicts reveals that website proprietors gain access to property rights to which they would otherwise not be entitled under traditional notions of intellectual property rights. There are cases where the conflict between the domain name and trademark systems is irreconcilable where both the parties act in goods faith. That in light of the approach being adopted by the domain name registrars, the courts and International Organizations such as WIPO will prevent the use of domain names which have been previously registered as a trademark. Thus, this conflict will be resolved primarily at the domain name registry level itself.

The courts are rapidly developing techniques for curbing cyber-squatting and in course of time, arbitration and mediation are likely to be the means for effecting conflicting legitimate users of trade names to reach an accommodation with each other. It is increasingly clear that due to the global nature of the Internet, any policy in order to be effective must also be uniformly accepted and enforced worldwide. In the wake of the 21st century, all countries must join hands to curb this international problem or else – face the risk of this menacing problem emerging time and again. IN Registry is India’s Official Domain Name Registry. The .IN Dispute Resolution Process is now available for use by registrants. The registry has published the.IN Dispute Resolution Policy (INDRP). It has been formulated in line with internationally accepted guidelines and with the relevant provisions of the Indian IT Act 2000.

There are two documents. The .IN Domain Name Dispute Resolution Policy (INDRP).  This document explains what types of disputes can be brought, and the criteria that will be considered by the arbitrators. The INDRP Rules of Procedure. These Rules describe how to file a complaint, how to respond to a complaint, the fees, communications, and the other procedures that will be used. Any person or entity may initiate an arbitration proceeding by submitting a Complaint to the.IN Registry National Internet Exchange of India (NIXI) at Noida in U.P. in accordance with the Dispute Resolution Policy and these Rules of Procedure The complaint should be filed with the fees as per the following schedule:

Administration Fee Rs.5,000/-
Arbitrator’s Fee Rs.25,000/-
For personal hearing Rs.5000/- per hearing

The complaint should contain the following details:

1. Details of the Complainant such as Postal, email addresses and Fax, telephone numbers.
2. Details of the Respondent such as Postal, email addresses and Fax, telephone numbers.
3. Specify the domain name which is the subject of the Complaint;
4. Describe, in accordance with the Domain Name Dispute Resolution Policy, the grounds on which the Complaint is made including, such as * The manner in which the domain name in question is identical * Why the Respondent should be considered as having no rights in respect of the domain name that is the subject of the Complaint. *Why the domain name in question should be considered as having been registered and being used in bad faith.
5. Disclose any other legal proceedings that have been commenced.

GLOBAL CYBER-SQUATTING CASES. Panavision International, L.P. v. Toeppen, Toeppen registered over 249 domain names, including deltaairlines.com, eddiebauer.com, neiman-marcus.com, and yankeestadium.com. In December 1995, Toeppen applied for and received registration of the domain name panavision.com. He later also registered panaflex.com. Toeppen’s web pages at these sites only contained the message, “Hello.” Panavision International (“Panavision”) is a well-established manufacturer of camera and filming equipment. Panavision holds many federally registered trademarks, including the Panavision and Panaflex marks. Panavision attempted to register panavision.com with InterNIC 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. (The Federal Trademark Dilution Act of 1995 expanded the scope of rights granted to famous and distinctive trademarks under the Lanham Act. Dilution differs from normal trademark infringement in that there is no need to prove a likelihood of confusion to protect a mark. Instead, all that is required is that the use of a “famous” mark by a third party causes the dilution of the “distinctive quality” of the mark.) Panavision moved for summary judgment. Federal District Court granted summary judgement in favour of Panavision, enjoined Toeppen from further use of the web site, and ordered him to relinquish the registration of the domain names to Panavision.

Fed. District Court’s findings:

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

One use discussed by the Court was a protection for a party who innocently registers a famous trademark as a domain name. For example, someone from Pana, Illinois, could register the panavision.com web site to provide a community political forum. Marks & Spencer PLC vs. One in a Million. In 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 Yahoo! Inc. vs. Domain Collection

The domain name campyahoo.com was ordered transferred to Yahoo!, which complained the name could be confused with its own trademarks. The respondent was identified as Domain Collection, which supplied no conventional address and failed to reply to the Internet company’s complaint. The evidence — including the fact that Domain Collection did not use the domain name — leads to “the conclusion that the only reason Domain Collection registered campyahoo.com was to trade in bad faith on the goodwill of Yahoo’s widely known and highly respected mark,” U.S. arbitrator David W. Plant said in the World Intellectual Property Organization ruling

INDIAN CYBER-SQUATTING CASES. 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 being the case no. D2000-1713 between Tata Sons Ltd Vs. Ramadasoft. The Geneva-based WIPO, a United Nations agency, protects trademarks and patents. The WIPO Arbitration and Mediation Center (the “Center”) received the Complaint of the Complainant, Tata Sons Ltd., on December 8, 2000. The complaint satisfied the formal requirements of the ICANN Uniform Domain Name Dispute Resolution Policy (“the Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (“the Rules”) and the Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (“the Supplemental Rules”).

The Respondent proceeds ex-parte. Rule 5 (e) governs this situation which reads as under: “5(e) if a Respondent does not submit a response, in the absence of exceptional circumstances, the Panel shall decide the dispute based on the Complaint”. This 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. The Panel allowed the Complaint and directed that the Respondent’s domain names be transferred in favour of the Complainant 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.

Ryder argued before the Panel that the State Bank of India (SBI), in existence for over 200 years, had established the SBI Cards and Payment Services Private Ltd in 1998 in collaboration with GE Capital Services. The panel accepted the SBI Card counsel’s argument that “the Australian company was in the business of buying and selling domain name through its website www.domainactive.com.” Deciding the complaint filed by SBI cards, the panel held that “the Australian company has registered the domain name sbicards.com in order to prevent the owner of the trademark or service mark from reflecting the mark as a corresponding domain name.” Mahindra & Mahindra Limited (M&M) Mahindra & Mahindra Limited (M&M) joined a growing list of corporate entities which have succeeded in getting their names, wrongly usurped by cyber squatters, back.

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. When the company officials approached him, the names were immediately transferred to a cousin of the individual residing in the US. This name transfer was done to avoid any court proceedings in India. It was then that M&M decided to take advantage of the new policy for name dispute redressal announced by ICAAN. It appealed to the WIPO stating that the name Mahindra was a registered trademark in India and the United States. Further, the company contended in its application that its name was synonymous with motor vehicles and tractors. The panellist concluded that the respondent’s claim to have registered the name for the possible launch of a free e-mail site did not constitute a right or legitimate interest in the domain name.

While the panellist wanted some more details in respect of the domain name mahindra.com, he ordered that the other two names, mahindra.net and mahindra.org, be immediately transferred in favour of the Indian company Yahoo! Inc. v. AKASH ARORA Probably the first reported Indian case is Yahoo! Inc. v. AKASH ARORA 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.

Titan Industries Ltd. Vs. Prashanth Koorapati & Ors. In, another case, Titan Industries Ltd. Vs. Prashanth Koorapati & Ors., the defendant registered the domain name “tanishq.com”. The plaintiff Company, which has been using the trademark “Tanishq” with respect to watches manufactured by it, sued for passing off and alleged that the use of the domain name by the defendants would lead to confusion and deception and damages the goodwill and reputation of the plaintiffs. 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. The defendant did not appeal against the High Court’s decision.

Bennett Coleman & Co Ltd Vs. Steven S Lalwani. The Economic Times won the first-ever legal victory of a domain name by any Indian company. On 11 March 2000 panellist W.R. Cornish of the (WIPO) Arbitration and Mediation Center delivered the administrative panel decision in the cases entitled “Bennett Coleman & Co Ltd Vs. Steven S Lalwani” and “Bennett Coleman & Co. Ltd Vs. Long Distance Telephone Company”. In both cases, Bennett Coleman & Co. Ltd. was the complainant before the WIPO Arbitration and Mediation Center. Since 1996, the complainant has held the domain names, www.economictimes.com and www.timesofindia.com, using them for the electronic publication of their respective newspapers. The complainant had registered in India the mark, “The Economic Times” for newspapers, journals, magazines, books and other literary works on March 28, 1973, and the mark, “The Times of India” for the same products on July 30 1943.

However, in 1998, Steven S. Lalwani, 16 Victoria Terrace, Upper Montclair, NJ 07043, USA registered the domain name www.theeconomictimes.com with Network Solutions. It may be pertinent to note that the domain name www.thetimesofindia.com was also registered with Network Solutions by Long Distance Telephone Company, having the same address as Steven S. Lalwani, being 16 Victoria Terrace, Upper Montclair, NJ 07043, USA. The said domain names were duly registered by Network Solutions, the then sole registrar for TLDs (Top-Level Domains) as the same were available to be registered on a first-come-first-served basis. Needless to mention, Network Solutions does not prescribe any restrictions on the registration of the domain names.

The judgement made it clear that the complainant has a very substantial reputation in their newspaper titles arising from their daily use in hard copy and electronic publication. Accordingly, the WIPO Center Panel held the respondents adopted in their domain names the very identical marks in which the complainant has rights and the respondents have no rights or legitimate interest in respect of the domain names. It was also categorically held that the registration and use of the domain names by the respondents are 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, the plaintiff, the owner of the well-known portal and domain name rediff.com filled for an injunction against the defendant, the registrant of the domain name “rediff.com”. There was a common field of activity and 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.” Reverse domain name hijacking.  On the other hand “Reverse domain name hijacking” is a tactic used by a complainant in bad faith to attempt to deprive a registered domain-name holder of a domain name. A number of disputes under the Uniform Domain Name Dispute Resolution Policy have shown that this “bad faith” can arise under many circumstances, including when confusion is unlikely, when the complainant fails to disclose certain facts and when a domain name registrant has not used a domain name.

The earliest district court decisions on the merits were all at the “strong remedies” end of the spectrum. Best known are the “Toeppen” cases which arose because the defendant Dennis Toeppen had registered about two hundred domain names, many of them matching trademarks that were unique or coined or both. He made no secret of his interest in selling each of these names to the respective trademark owner. Interstellar Starship Services, Ltd. v. Epix, Inc. The first district court reversal of an NSI decision was Interstellar Starship Services, Ltd. v. Epix, Inc. The domain name owner Interstellar Starship Services, Ltd. (“Interstellar”), located in Oregon, registered the epix.com Internet domain name in January of 1995 and used it to promote theatre groups including a group that performed the Rocky Horror Show. Epix, Inc. (“Epix”), the Massachusetts-based challenger, had a trademark registration dating from 1984, for “Epix” as related to circuit boards and image processing software.

(The mark is not unique; for example, a Los Angeles company has the mark registered for men’s and women’s sportswear, and a Minnesota company has the mark registered for medical apparatus. In 1996, some twelve years after obtaining its trademark registration, Epix tried to obtain the epix.com domain name, only to find out that Interstellar had registered it in 1995. Epix then presumably did a trademark search, discovered that Interstellar lacked a trademark registration (thus ensuring that NSI would take the side of the challenger), and asked NSI to cut off Interstellar’s domain name. NSI sent Interstellar a 30-day letter. Interstellar filed suit in a federal district court to block NSI’s plans. The court noted that promoting a theatre group is much different than selling electronic circuit boards and software, and ruled that the domain name owner was not infringing any rights of the challenger. Interstellar got to keep the epix.com domain name and was awarded costs.