CYBER SQUATTING: THE PARADIGM AND LEGAL REGIME VIS-A-VIS INDIA AND USA BY - MR. SHUBHAM GOSWAMI
CYBER SQUATTING: THE
PARADIGM AND LEGAL REGIME VIS-A-VIS INDIA AND USA
AUTHORED BY - MR. SHUBHAM GOSWAMI
B.A.LL.B. (hons.) 4th Year
GLA UNIVERSITY, MATHURA
ABSTRACT
The rise of the internet has transformed various
aspects of modern life, including communication, business, and commerce.
However, this digital revolution has also led to the emergence of
cyber-squatting, where individuals maliciously register, sell, or use domain
names identical to well-known trademarks without authorization. Cyber-squatting
poses significant challenges to brand owners by exploiting the reputation and
goodwill of established names for financial gain. This research paper explores
the legal frameworks and paradigms governing cyber-squatting in India and the
USA. While the USA has established specific legislation such as the
Anti-cybersquatting Consumer Protection Act (ACPA) to address this issue, India
relies on existing trademark laws under the Trade Marks Act, 1999. Through a
comparative analysis of legal regimes, case laws, and enforcement mechanisms,
the paper aims to understand the effectiveness of current measures and identify
potential improvements to safeguard intellectual property rights in the digital
age.
Keywords: Cyber-squatters, Domain Name, Internet Protocol,
Trademark, Identity theft.
INTRODUCTION
After the introduction of ‘INTERNET’ in 20th
Century with the Humankind, the growth and development of Information
Technology has took the world by storm. The growing technocratic society has fastened
the evolution of Human race in experiencing and innovating new realms and new
dimensions of the world. The Internet has helped in many aspects of
Communications, Interactions, Transportation, Business, Entrepreneurship, Start-ups, Health,
Commerce, Economics, etc. Since, the very dawn of Internet, its use has emerged
and evolved significantly, which through time have shown us the positives and
negatives of this technology in our lives.
The rising position of business and trade
through Internet has faced hindrances by the Online offenders. Internet as an
helping tool for providing opportunities and a strong platform for innovation
has jeopardize privacy and intellectual property of many users. The
unauthorized registration or, selling or, use of internet domain names or,
trafficking of Service marks, Trademarks, Company Names or personal names with
a malicious intent of gaining profit from goodwill of the actual owner is
termed as Cyber-Squatting or Domain-Squatting. It is derived from
‘Squatting’, which is the act of occupying or enjoying the unoccupied or
abandoned space of other which the squatter does not own or have permission to
use[1]. It is a malafide practice by the perpetrators
(Cyber-squatters)
of registering Internet Domain Names of a business or an organization to sell
them to third parties for making profit out of their reputation. Domain
Names are addresses on the Internet for their users and subscribers, they
are text-based and easy-to-remember names in place of Internet Protocol
(IP) addresses, which are numerical based physical addresses for various
businesses and websites on the Internet. It can be understood in the following
figure of URL (Uniform Resource Locator):
The domain name and the top-level domain (TLD)
constitutes the Root Domain of an address. For email addresses, a domain name
is name that appears after ‘@’ sign, like, yahoo.com, gmail.com, etc. ICANN
(Internet Corporation for Assigned Names and Numbers) is an international non
profit organization, founded in 1998, to coordinate the management of the
technical elements of DNS (Domain name system). It is responsible for the
administration of Top-level Domain Names to ensure universal resolvability of
valid addresses to every user on the Internet. ICANN, in 1999, for the
arbitration of disputes related to domain names adopted a policy of Uniform
Domain Name Dispute Resolution Policy, (hereinafter referred to as ‘UDPR’).
In India, Delhi High Court in the matter of, Manish
Vij and Ors. Vs Indra Chugh and Ors.[2], defined cyber squatting by stating that ‘an
act of obtaining fraudulent registration with an intent to sell the domain name
to the lawful owner of the name at a premium’.[3] There is no legislation in India which prevents
cybersquatting or the disputes related to Domain names, but Trademark of domain
names are protected under The Trade Marks Act, 1999[4]. Whereas, in USA, there is a specific federal
law for the prevention of Cybersquatting only, known as the Anti-cybersquatting
Consumer Protection Act (‘ACPA’), 1999[5]. It protects individuals and owners of distinct
trademarked names from being a victim of this malafide practice. Trademark
owners used to rely on Federal Trademark Dilution Act (FTDA)[6] before the implementation of ACPA, it is a U.S.
law that protects well known trademarks from uses that weaken their unique
character, even if there is no direct competition or risk of competition. In a
report by WIPO (World Intellectual Property Organization) in 1999,
Cybersquatting or Warehousing was considered a practice of abusive registration
of a domain name[7].
AN IMPOSTER IN
CYBERSPACE: CYBERSQUATTING
Cybersquatting was not always a crime but a
general practice by some ambitious individuals to register domain names of renowned
and reputed companies to sell them afterwards legitimately. The High-capital
giants sometimes used to hire these individuals as they were not shrewd of this
internet business. The very first instance of cybersquatting as a crime can be
traced back in the case of Avery Dennison Corporation vs Jerry Sumpton[8] , before the adoption of UDRP, wherein, the
judge interpreted the defendants of the case as ‘Cyber-squatters’, as the two trademarks used by
defendant were identical to that of owned by plaintiff. They further stated
that ‘cyber-squatters’
seize all the accepted meanings of their squatted domain name so as to prevent
others from using it and when they feel to have a financial benefit of the same,
they fix a price and sell it to others so as to show the validity of the ‘squatted’
domain names.
Cybersquatting can not always be considered a
crime until being practiced in good faith or by the consent of the actual owner
of the trademarked name, domain or other names. For cybersquatting to be a
crime, following conditions must be fulfilled:
Ø The domain name of the subsequent business is
identical to an already registered trademark.
Ø The domain name is created to deceive and
defraud customers/third parties.
Ø The domain name was created with malicious
intention.
There are 4 types of Cybersquatting, which are
in practice :
1.
Typosquatting: It is a practice by hackers of deliberately
registering misspelled domain names of well-established websites. It is derived
from the word ‘typos’, which means ‘a mistake in printed text’. For
instance, goggle.com, yaahoo.com, etc. There are many variations to
typosquatting, perpetrators, to imitate the actual website, creates similar
layouts, copies same colors, or sometimes displaces the logo of the webpage to
lure its customers. They create homographic illusion (like lowercase ‘L’ and an
uppercase ‘I’, imitating them with numerical ‘1’) and use some other top-level
domains for the squatted site (like yahoo.net, opera.org, etc.). Typosquatting
is usually practiced to perform further more attacks on the visitors, like,
install
malwares, clickbaits, affiliated links, etc.
2.
Name Jacking : It refers to an act, wherein the cyber-squatter uses the name of a famous personality
(like, Political Figures, Influencers, Celebrities, etc.) to register a domain
name of a website or business. It is practised primarily to benefit out of the
web traffic for that certain famous personality. Celebrities like Madonna and
Jennifer Lopez have been the victims of these name jackers, for the spread of
pornographic content.
In USA, there are
several criteria of registering person names as trademarks like, the name must
have acquired distinctiveness from others through long usage and that it
carries a secondary meaning. These criteria are reasons why name jacking
doesn’t fall under ambit of federal law of USA; ACPA.
3.
Identity Theft: It is an act where the perpetrator steals
personal information of the legitimate owner to assume his identity and commit
various fraudulent activities under his name. It is a crime generally
associated with finances of a person and this makes children and aging adults
more prone to such cyber-attacks. The offenders legitimately purchase a domain
which has not been reasserted and establish the same reputation as of the
actual website so as to lure its customers to fake website linked to the
domain.
The offender uses various techniques in the commission of identity theft like, social engineering, stealing mails of the victim, phishing, etc. It is very common and easy for the offenders to commit identity theft nowadays, as people before entering their credentials in request of a loan, credit card, etc. doesn’t go through guidelines and terms and conditions of the process, which unfortunately, results in the commission of crime and them being the victim of the process.
The offender uses various techniques in the commission of identity theft like, social engineering, stealing mails of the victim, phishing, etc. It is very common and easy for the offenders to commit identity theft nowadays, as people before entering their credentials in request of a loan, credit card, etc. doesn’t go through guidelines and terms and conditions of the process, which unfortunately, results in the commission of crime and them being the victim of the process.
4.
Reverse Cybersquatting:
Also known as Reverse Domain Hijacking, is a practice by trademark owners of
alleging a particular domain name that a cyber-squatter has brought or took, for their
goodwill, from them in bad faith. This constitutes a sham complaint on part of
such trademark owners but the aggrieved can take the exception of Rule 15(e)[9] of UDRP[10].
CONSTABULARY IN CYBERSPACE:
ICANN
Internet Corporation for Assigned Names and
Numbers (ICANN), is the international organization which maintains the
allocation of domain name globally, it also allows remedies to victims of
cybersquatting and the disputes arising from it through the procedures
mentioned in UDRP. ICANN manages the administration of TLD (top-level domains),
which are of two types; Generic and Geographical. The Geographical TLDs [like,
.in (India), .uk (United Kingdom), .us (USA), etc.] are assigned by each
country’s Network Information centres, whereas, generic TLDs (gTLD) are
international and unique in nature, which represents the type of organization,
like, .edu, .gov, .net, etc. In order to get a gTLD, a registrant or user must
register the domain with a registrar which is accredited with ICANN. In 2001,
ICANN introduced several other domain name extensions for some more businesses:
.aero, .pro, .museum, .name (for individuals), .coop, .info, .biz. ICAAN also
imposes several obligations on its users and that the users must preserve the
rights of third parties in the transactions. The users or the subscribers of
ICANN are required to conform with ‘Rules of UDRP’[11], so in case a dispute arises. If a dispute
arises, then the complainant is required to prove that:
Ø The complainant has the legitimate right of
owning the domain name in question.
Ø The subsequent registrant has no legitimate
rights and interest regarding the domain name in question.
Ø The subsequent registrant has bad faith
acquiring the domain name.
As per the ‘Rules of UDRP’ the interpretation of
this procedure takes only 60 days from the date the complaint was made, but the
only problem was that there were only two remedies to it; either the transfer
of domain name to the rightful owner or the cancellation of domain name in question.
Previously, the only benefit to the complainant was of Forum Shopping[12] but nowadays, the new gTLDs system by ICANN has
provided a faster and lower costs alternatives to the complainant.
PROBLEM OF
CYBERSQUATTING IN INDIA AND USA
According to WIPO, the number of cybersquatting
cases has shown growth through the years, major of these cases are reported
from nations like United States, China, United Kingdom, France, etc. In 2020,
WIPO Arbitration and Mediation Center reported registration of total number
50,000 cases, which covered around 90,000 domains from across 180 nations.
After the release of statistics, Erik Wilbers, the Director of WIPO Arbitration
and Mediation Center, mentioned that the pandemic has led to more people
spending time online, creating more opportunities for cyber-squatters. In
response, rights owners are intensifying their online brand enforcement as they
increasingly focus on digital marketing and sales.[13]
POSITION IN INDIA
The prevailing legislation for cyberspace in
India is Information Technology Act, 2000, but it does not provide provisions
for cybersquatting, neither does it compensate the victims. All the cases
related to domain-names or cybersquatting are dealt under Trade Mark Act, 1999.
A victim under the Trademark Act can bring an action on two grounds;
Ø One, When there is violation of Trademark and
Intellectual Property of the victim and,
Ø Other, when the cybersquatter is selling his
goods and services on the goodwill of other. In this case, the courts uses the
principle of ‘Likelihood of Confusion’, to determine whether the conditions
presented towards the customers regarding the product or services were likely
to cause confusion. Main aspects to determine the ‘Likelihood of Confusion’ are
:
a)
Resemblance
between the marks (Design, Appearance of text, Connotations, etc.)
b)
Strength
of the Marks (Example : a product is registered as ‘Hewlett-Packard’,
another subsequent company is formed with name ‘Hevlet Pacchard’)
c)
Similarity
of Products or Services.
In fulfilment of either of the ground, the
courts can order injunction on the services or product by the squatter.
Although, in India, the remedy to protect goodwill of trademarks of proprietors
and to safeguard their interests is through the action of ‘Passing off’.
Passing off is an action by courts in several cases to restrain the defendants
on using and exploiting the goodwill and preserving the legitimate interests of
plaintiffs.
The first case in India for cybersquatting was Yahoo!
Inc. vs Akash Arora and Anr.[14],
wherein the plaintiff was a USA based legally recognized firm providing
internet services in around 69 countries in the world with the exception of
India. They were recognized by general public and were also the owner of
trademarks ‘Yahoo.com’ and ‘Yahoo!’. The defendant registered a similar domain
and labelled it as ‘Yahoo India’ and provided Internet services in India. The
Delhi High Court held that the acts of defendant were no bonafide and
irrespective of the fact that Yahoo India was legally registered, it can not be
established that the defendant didn’t engaged in infringing the trademark of
Yahoo Inc., the court further issued a permanent injunction against Akash Arora
due to these activities of cybersquatting and stated that a domain carries a
similar level of legal protection as that of a trademark.
In
the case of Rediff Communications Ltd. Vs Cyberbooth & Anr.[15], the plaintiff, Rediff
Communication Ltd., was an online company for communication services through
Internet, they registered a domain name ‘Rediff.com’ to carry on the business
in 1997. In 1999, plaintiff came to know a about an identical domain name as
theirs’, ‘Radiff.com’. After which they filed a suit for permanent injunction
against the defendants, so as to restrain them from flouting or soliciting the
users of plaintiffs. The court stated that purpose of defendant behind
registering an identical domain name as that of plaintiff’s is to flout their
users and capitalize on their goodwill, they upheld the action of passing off
against defendants and stated that domain names carry equal degree of
protection as that of trademarks.
Another
famous case is Tata Sons Ltd. vs Manu Kishori & Ors.[16],
wherein Plaintiff registered 10 domain names under the name of Tata Group in
1998. The respondent registered a domain name with name bearing ‘Tata’, against
which plaintiff filed a complaint in WIPO, which further held that respondent’s
trademark is confusingly similar as that of plaintiff’s, thus, respondents
don’t have legitimate interests of the domain names and them registering and
using such domain names is a malafide act. They also referred the precedent of
Rediff Communication case and stated that domain names have the same degree as
that of trademark and that they are not just addresses.
POSITION IN USA
The
ACPA (Anti-cybersquatting Consumer Protection Act) is a prevalent body of rules,
enacted in 1999, responsible for restraining the squatters and their practice
of trademark/domain squatting in USA. It is made after an amendment in a US
federal trademark law, named, Lanham Act[17].
ACPA provides a civil action remedy to victims of with several rights, like,
Right to sue, Right to seek injunction, Right to Domain Name transfer,
cancellation, or forfeiture[18],
Right to recover damages[19], Right
to recover cost and Attorney’s fees[20]. As
per this act, civil action can be taken against the cyber-squatter through two
types of actions: the ‘Trademark’ provision (or the ‘in personam’
jurisdiction) and the other through ‘in rem’ jurisdiction. The former is
invoked when the defendant can be located in court’s jurisdiction and the
latter is invoked when the defendant is out of the reach of the process of
court and thus, the action is brought where the domain name registry, domain
name registrar or some other authority responsible for assigning or registering
that domain name, is located.
An
alternative remedy other than ACPA’s suits are UDPR’s faster and cheaper
administrative proceedings, but still many trademark owners usually route for
civil action through ACPA than an administrative action under UDPR,
additionally, ACPA provides various other remedies other than mere cancellation
or transfer of the domain names (the only remedies provided under UDPR
administrative proceedings) and thus deterring future cyber-squatters.
The
first reported case concerning cybersquatting in USA was, Panavision
International, L.P. vs Toppen[21], in
this case the domain name ‘panavision.com’ and other domain names incorporating
trademarks of various companies, including Panavision, with the intention of
selling them to the trademark owners at a profit. Panavision, a company known
for its motion picture equipment sued Toppen, claiming that his actions are
directed their trademark. The court ruled in the favour of Panavision, holding
that Toppen’s actions resulted in trademarks dilution under Federal Trademarks
Dilution Act (FTDA). This case along with series of other cases lead to forming
of a robust framework for handling of cybersquatting matters and thus in the
implementation of ACPA.
Sporty’s
Farm L.L.C. vs Sportman’s Market, Inc.[22],
was the case in which ACPA was applied for the first time, it helped in setting
a precedent for how cybersquatting disputes be dealt and resolved through this
law. In this case Sporty’s Farm registered the domain ‘sporty’s.com’, which was
similar to sportsman’s Market’s trademark. The court found that the domain name
registered by Sporty’s farm was in bad faith with the intent to profit from the
goodwill associated with Sportsman’s Market’s trademark ‘Sporty’s’. The court,
applying the ACPA, mandated the transfer of the domain name to Sportsman’s
Market.
In
case of Volkswagen vs Virtual Works[23],
Virtual Works registered the domain ‘vw.net’ and offered to sell it to
Volkswagen. The Fourth Circuit Court of Appeals determined that Virtual Works
registered this domain name in bad faith with the intent to sell it to
Volkswagen, thereby profiting from Volkswagen’s established trademark. As per
ACPA, the Court of Appeals ordered the domain name to be transferred to
Volkswagen. This case reinforced the application of the ACPA in protecting
trademark owners from cyber-squatters seeking to exploit their brands.
In a
famous case of Academy of Motion Picture Arts and Sciences vs GoDaddy.com,
Inc.[24],
the Academy sued GoDaddy for allowing users to register domain names
incorporating the ‘Oscar’ trademark and allegedly profiting from this practice.
The Court ruled in favor of GoDaddy, stating that the company was not liable
under the ACPA because it did not register, traffic in, or use the domain names
in bad faith. This case highlighted the limitations of the ACPA in holding
domain registrars accountable for the actions of their users.
CONCLUSION
The
problem of cyber-squatting remains a significant concern in the digital era,
where domain names and online identities hold substantial value. The current
legal frameworks in both India and the USA provide some level of protection
against this malicious practice, yet there are areas where improvements can be
made to enhance their effectiveness.
In
the USA, the Anti-cybersquatting Consumer Protection Act (ACPA) has been
instrumental in providing a legal recourse for victims of cyber-squatting. It
allows trademark owners to seek injunctions, damages, and the transfer or
cancellation of infringing domain names. However, the application of ACPA is
limited by its reliance on proving bad faith intent, which can be challenging
in certain cases. To strengthen the deterrence against cyber-squatting, it is
essential to consider expanding the scope of ACPA to include clearer
definitions and broader protections for emerging forms of online brand
exploitation. India, on the other hand, lacks specific legislation dedicated to
cyber-squatting, relying instead on the Trade Marks Act, 1999. While this act
provides some remedies, such as injunctions and actions against passing off, it
does not explicitly address the nuances of cyber-squatting. India could benefit
from enacting a dedicated anti-cyber-squatting law that clearly defines the
practice and provides robust mechanisms for enforcement. Additionally,
enhancing the capacity of the judiciary and law enforcement agencies to handle
cyber-squatting cases effectively is crucial.
Both
countries can also benefit from international cooperation and harmonization of
laws to tackle cross-border cyber-squatting effectively. Establishing clearer
guidelines for domain name registration processes, implementing stricter
verification mechanisms, and promoting awareness among businesses and consumers
about the risks of cyber-squatting can also contribute to mitigating this
issue. Moreover, the role of organizations like the Internet Corporation for
Assigned Names and Numbers (ICANN) is pivotal in addressing cyber-squatting
globally. ICANN's Uniform Domain Name Dispute Resolution Policy (UDRP) provides
a mechanism for resolving domain name disputes, but it is essential to ensure
that this process remains accessible, efficient, and fair to all parties
involved. Enhancements in the UDRP process, such as reducing costs and time for
resolution, can further strengthen the fight against cyber-squatting.
In
conclusion, addressing the problem of cyber-squatting requires a multifaceted
approach that includes strengthening legal frameworks, enhancing enforcement
mechanisms, promoting international cooperation, and raising awareness. By
taking proactive steps to protect intellectual property rights in the digital
space, both India and the USA can better safeguard the interests of trademark
owners and maintain the integrity of online identities.
[1] Cybersquatting, WIKIPEDIA, < https://en.wikipedia.org/wiki/Cybersquatting
>, accessed April 4, 2023.
[3] Ibid, Note 2.
[4] Trade Marks Act, Act No. 47 of
1999.
[5] Anti-Cybersquatting Consumer Protection
Act, 15 U.S.C. § 1125(d).
[6] Federal Trademark Dilution Act, 15
U.S.C. § 1051 (Supp. I 1995).
[7] WIPO, WIPO
Internet Domain Name Process, THE MANAGEMENT OF INTERNET NAMES AND ADDRESSES:
INTELLECTUAL PROPERTY ISSUES (1999).
[9] Rule 15(e) UDRP states that, “the
panel shall declare in its decision that the complaint was brought in bad faith
and constitutes an abuse of the administrative proceeding” if, “after considering
the submissions the panel finds the complaint was brought in bad faith, for
example in an attempt at Reverse Domain Name Hijacking or was brought primary
to harass the domain-name holder”
[10] ICANN,
Rules for Uniform Domain Name Dispute Resolution Policy, <https://www.icann.org/resources/pages/udrp-rules-2015-03-11-en?routing_type=path
>, accessed April 9, 2023
[13] WIPO, “WIPO's Anti-Cybersquatting”
Service Surpasses 50,000 Cases amid COVID-19 Surge, (November 30, 2020), <https://www.wipo.int/pressroom/en/articles/2020/article_0026.html >, accessed on June 15, 2024.
[14] Yahoo! Inc. vs Akash Arora &
Anr., (1999) IIAD (Delhi) 229.
[15] Rediff Communication Ltd. Vs
Cyberbooth & Anr., 1999 (4) BomCR 278
[17]
The Lanham Act, 15 U.S.C. § 1051.
[18]
ACPA, §1125(D)(1)(c)
[19]
ACPA, §1117.
[21]
Panavision International, L.P. vs Toppen, 141
F.3d 1316 (9th Cir. 1998).
[22] Sporty's Farm L.L.C. v. Sportsman's Mar., Inc., 202
F.3d 489 (2d Cir. 2000).
[24] Acad. of Motion Picture Arts v. GoDaddy.Com, Inc.,
Case No. CV 10-03738 AB (CWx) (C.D. Cal. Sep. 10, 2015).