Cyber squatting (also known as domain squatting), according to the United States federal law known as the Anti Consumer Protection Act,1999, is registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else. The generally accepted definition of Cyber squatting is “Registration of a Domain Name that is similar to someone Else’s Trademark or personal name, where:
Registrant has no legitimate right to the domain name.
Some evidence that Registrant registered name solely to take advantage of the trademark holder or individual owner of the name.”
occur when a third party registering else trademark as a domain name with the intention to offer it back to the true owner at a substantial fee. The law of trademark interferes here to protect the true owner who has the exclusive right to the trademark.[1]
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. Cyber squatting however a bit is different in that the domain names that are being “squatted” are (sometimes but not always) is being paid for through the registration process by the Cyber squatters. Cyber squatters usually ask for prices far greater than that at which they purchased it
The term “cyber squatting” refers to registering, using, or selling a domain name with bad faith intent to profit from someone else’s trademark. It is also the deliberate bad faith registration as domain of well-known trademarks in the hope of being able to sells 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. Thus involves the use of domain name by a person with neither trademark registration nor any inherent rights to the name.
So, what is the magnitude of the present day problem cyber squatting? It would be a futile attempt to encompass the ever-increasing magnitude of cyber-squatting, but a bare reference to a few cases, highlights possible abuse and commercial nuisance generated by cyber squatting: -
In Rediff Communications LTD, v Cyber booth[2], 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“. 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.”
To know cyber squatting it is also important to know what is a domain name because it is directly related to it as they are the domain names only which are being hijacked by the cyber squatters. Domain names identify one computer from the millions of others connected to the internet enabling users to send email, access web pages, to transfer files. The domain names system has two components:
Top level domain name and ,
Second level domain name.
Governments authorize and license companies as registrars to sell domain names to individuals.
Many domain names are the name of companies, which in turn are often registered trademarks. The use of trademark within domain names allows for the easiest means of identification of a company’s business for an internet user. Some internet browser allows user to find a company home page simply by typing in the name of the company or its trademark and the browser add rest of the URL.A short easy identifiable domain name which includes a company trademark, ensures that its promotion, information and commercial offerings are easy to find. Thus domain names can be said to serve similar functions to trade marks.[3]
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. Opportunities for cyber squatters are rapidly diminishing, because most businesses now know that nailing down domain names is a high priority.
Before 1999, the business world was still resisting the need for the Internet as a tool for success.  They didn’t see the need to register their trademarks as domain names. However, cyber squatters did see the increasing importance of the Internet, and saw the businesses making the mistake of ignoring it. This is how cyber squatting was born and began causing problems.
Steps taken to prevent cyber squatting:
In India in the absence of requisite cyber laws to prevent cyber squatting, the cases involving cyber squatting is decided under the relevant provision of trademark laws i.e., sections 27 and 29 which are related to passing off and infringement respectively.
In 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 clash between domain name system and trademarks, the World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre is developing an online Internet based system for administering commercial disputes involving intellectual property. The 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.[4]
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.
Legal Actions against Cyber squatters and Domain Names – Domain Name Law & Domain Name Disputes:
There are two primary domain name rules providing legal channels for recovering a domain name:
the Anti Consumer Protection Act,1999 (“ACPA“) and
ICANN’s Uniform Domain Name Dispute Resolution Policy (“UDRP“).
ACPA Act, 1999:
The Anti Consumer Protection Act (also known as Truth in Domain Names Act), United States federal law enacted in 1999, is part of A bill to amend the provisions of title 17, United States Code, and the Communications Act of 1934, relating to copyright licensing and carriage of broadcast signals by satellite (S. 1948). 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 was sponsored by Senator Trent Lott on November 17, 1999, and enacted on November 29 of the same year. The ACPA is codified at 15 U.S.C. § 1125(d).[5]
ACPA applies to people who: [6]
have a bad faith intent to profit from a domain name
register, use or traffic in a domain name; that is identical, confusingly similar, or dilutive of certain trademarks The trademark does not have to be registered.
ACPA provides that cyber pirates can be fined between $1,000 and $100,000 per domain name for which they are found liable, as well as being forced to transfer the domain name.
Somewhat more broadly, the Act is meant to reduce consumer’s confusion about the source and sponsorship of Internet web pages. The idea is to provide customers with a measure of reliability, so that when they visit www.burgerking.com, they will be able to find actual Burger King Products, and not something entirely different. It also protects mark owners from loss of customer goodwill that might occur if others used the trademark to market disreputable goods or services.
Penalties under the act:
The trademark owner can recover
The domain holder’s profits from use of the mark,
The trademark owner’s damages resulting from harm to the value of mark, and
Court costs as “actual damages.” In determining the award to be paid, the court can choose to award up to three times the amount of actual damages. Attorney fees may be awarded in exceptional circumstances, such as when there was a willful and malicious violation.
Instead of having to prove the amount of “actual” damages suffered as above, the mark owner can instead request payment of “statutory damages” from $1000 and $100,000 per domain name.
One of the limitations of the Act is the impact on settling disputes: where two parties have a dispute over a domain name, and the domain name owner has a lesser 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.
Uniform Domain Name Dispute Resolution Policy (as approved by ICANN on Oct 24, 1999):
Besides bringing a lawsuit in federal court, a trademark owner who believes that someone else is violating his or her trademark rights through cyber squatting can use the Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP is an online dispute resolution mechanism administered by the Internet Corporation for Assigned Names and Numbers (ICANN) and sets the terms and conditions in connection with a dispute between you and any other party over the registration and use of an internet domain registered. Under the UDRP, ICANN can cancel an improperly registered domain name or order a losing party to transfer the domain name to the winning party. Under Para 4 of this policy will be conducted according to the rules for UDRP. The purpose of UDRP is to provide a cheaper and more efficient mechanism for resolving cyber squatting disputes. If you believe that someone is cyber squatting on a domain name that rightfully should be yours, bringing an action under the UDRP may be a cheap and easy alternative to a lawsuit. Note, however, that a losing party in a UDRP proceeding may sue in federal court to reverse the outcome. Importantly, if a court determines that the person initiating a UDRP proceeding knowingly misrepresented that the challenged domain name was “identical to, confusingly similar to or dilutive of [his or her] mark,” then it may award the other party damages and attorney’s fees.[7]
Representation under UDRP:
Statements made in the registration agreement should be complete and accurate,
To our knowledge registration of the domain name will not be infringe upon or otherwise violate the rights of any third party,
Domain name should not be registered for illegal purpose,
Domain names not to be used knowingly in violation of any applicable laws or regulations.
It is our responsibility to recognize whether domain name registration infringes or violates someone else’s right.[8]
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 possess, the policy to which all domain name registrations now adhere, is one, which attempts to bring about the settlement of in domain name disputes. Under the policy in cases involving cyber squatting the complainant can (but need not) invoke mandatory administrative procedure (herein after 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 in the region of 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.[9]
Case Laws:
Yahoo Inc. v. Akash Arora[10]:
The first reported Indian Case 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 trademarks/ domain name which is deceptively similar to the plaintiff’s trademark Yahoo. The learned single Judge of the Delhi High Court rejected the argument that the provisions of the Indian Trade Mark Act would not be attracted to the use of the domain trade name or domain name on the Internet. The learned Judge held that although the word `services‘ may not find place in the expression used in Sections 27 and 29 of the Trade and Merchandise Marks Act, services rendered have to be recognized for an action of passing off. The learned Judge held that the two marks/domain names “Yahoo!” of the plaintiffs and “Yahooindia” of the defendants are almost similar excepting for the use of suffix `India’ in the latter. The learned Judge also rejected the argument of the defendants that the Internet users are sophisticated users and only literate people who are able to ascertain can approach the actual Internet site that they intend to visit. The learned Judge observed that if an individual is a sophisticated user of the Internet he may be an unsophisticated consumer of information and such a person may find his/her way to the different Internet site which provides almost similar type of information as that of the plaintiff and thereby confusion could be created in the mind of the said person who intends to visit the Internet site of the plaintiff, but in fact reaches the Internet site of the defendant.
M/s. Mahindra & Mahindra v. Neoplanet Solutions[11]:
The Complainant is a well known manufacturer and exporter of tractors and utility vehicles. Apart from the Complainant itself, 35 Group Companies include “Mahindra” in their names. By reason of the extensive use of Trademarks and the name Mahindra in the various Group Companies, the word Mahindra, at least in relation to Motor Vehicles, is associated exclusively with the Complainant.
The Complainant became aware of the existence of the domain name registration in issue at a date prior to December 13, 1999. Prior to the attorney’s letter of December 13, 1999, they had asked their associates in Vijayawada to approach Network Solutions informally to enquire about its registration of the domain name. The associates were informed the Network Solutions was willing to transfer the domain name for the sum of Rs. 15, 000/- but Network Solutions “did not reproduce the demand in writing.”
It was found by the panel that the Respondent’s domain name “Mahindra.com” was identical to the trademark “Mahindra“, the Respondent had no rights or legitimate reason for adopting the word “Mahindra” as a domain name and the domain name “Mahindra.com” was registered and being used in bad faith.
Since the elements of paragraph 4 (a) of UDRP were proved, the panelists ordered that the domain name “Mahindra.com” be transferred to Mahindra & Mahindra.
Suggestions:
Now it’s clear that what cyber is squatting all about, it is a kind of cyber crime which need to be stopped as soon as possible so that it cannot harm the reputation of a corporate or a person. According to me the ACPA for the infringement of cyber squatting is not enough to control this menace, there are certain limitations also to this ac which need to be cured and also the procedure is long which need to be shortened.
The UDRP is the other legal reform for the prevention of cyber squatting. In a way the UDRP is better than the ACPA act as here the procedure is short and it try to solve it online only.
But more has to be done to prevent the cyber squatting as these two laws are not enough to combat with it. And also the position of India with respect to cyber squatting is not very impressive. Firstly:
India does not have any separate act law relating to cyber squatting.
The case of cyber squatting comes under the trademarks act.
The instances of cyber squatting are increasing day by day.
People are not much aware of it
No major steps have been taken to prevent
Therefore in relation to other countries of the world India position is not so good. The other countries are dealing with cyber squatting in some way or the other, but in India there is no separate law to prevent it. Hence, I suggest that foremost a law has to be passed in India against the cyber squatting and cyber squatters, which can help the trademark laws also.
[2] 2000 (20) PTC 209.
[3] Article by Michael Handler(B.A.LL.B final year student)University of Sydney.
[4] www.indialaws.info/display.aspx?4555.
[7] Guide to Trade Marks Law,2nd edition, by Manish Arora,Universal Law Publishing.
[8] Supra 14.
[9] Intellectual Property by Deborah E. Bouchoux,2000 Edition, West Legal Studies Thomson Learning Publications.
[10] 1999 PTC (19) 201.
[11] D2000-0248.
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