India: High Court declares '"Cybersquatting” a new form of internet piracy

"Cybersquatting” was succinctly defined by Delhi High Court (in Manish Vij v Indra Chugh) as “obtaining fraudulent registration with an intent to sell the domain name to its lawful owner at a premium”. This form of internet piracy – the deliberate, bad-faith and abusive registration of domain names in violation of the rights of trademark owners – breaches a trademark owner’s fundamental right to exclusively use its trademark. In an early decision (2001), a US federal court in Virginia described cybersquatting as “the internet version of a land grab”.

In India, no legislation explicitly describes cybersquatting or other domain name disputes. The Information Technology Act, 2000 (IT Act), which addresses many cybercrimes, oddly ignores the problem of domain name disputes and cybersquatting. However, domain names may be considered trademarks based on use and brand reputation. In the absence of appropriate law that deals with cybersquatting, victims can initiate an action for passing off and infringement of trademarks under the Trade Marks Act, 1999. Numerous cases have laid down that for such an action to succeed the defendant should have sold or offered its goods/services in a manner that deceives the public into thinking that the goods/services of the defendant are those of the plaintiff; misrepresentation by the defendant to the public should be established; and loss or the likelihood of it should be established.

Indian courts have been active and have adopted holistic approach in providing relief in cases pertaining to cybersquatting. The Supreme Court, since the landmark case of Satyam Infoway Ltd v Sifynet Solutions Pvt Ltd (2004), has taken the view that domain names are to be legally protected to the extent possible under the laws relating to passing off. However, due to the rising number of cases, people have now also started moving towards alternative methods of dispute resolution.

Disputes involving domain name registrations acquired in bad faith are typically resolved using the Uniform Domain Name Dispute Resolution Policy (UDRP) developed by the Internet Corporation for Assigned Names and Numbers (ICANN) and implemented in 1999. The UDRP is specifically designed as an efficient and cost-effective way to resolve disputes that arise when a registrant has registered a domain name in bad faith that is identical or confusingly similar to a trademark in which it has no legitimate interest. The UDRP does not cover conflicts between two trademark holders or between a trademark holder and a registrant with rights or legitimate interests.

UDRP proceedings are administrative in nature and are conducted by ICANN- approved service providers such as the World Intellectual Property Organization, the National Arbitration Forum, the Asian Domain Name Dispute Resolution Centre and the Prague-based Arbitration Court. Under this procedure, administrative panels consisting of neutral persons are established to decide the disputes.

For disputes involving “.in” domain names, the trademark holder can also file a complaint with the National Internet Exchange of India (NIXI) under the .IN Domain Name Dispute Resolution Policy (INDRP), which has been formulated with internationally accepted guidelines and is in accordance with the provisions of the IT Act.

Upon receipt of a complaint the .IN Registry appoints an independent and impartial arbitrator from the list of arbitrators maintained by the registry. The arbitrator conducts arbitration proceedings in accordance with the Arbitration and Conciliation Act, 1996, and rules provided under the INDRP. The remedies available to a complainant in any proceeding before an arbitrator are limited to cancellation of the registrant’s domain name or the transfer of the registrant’s domain name registration to the complainant.

Cybersquatting is a menace without territorial boundaries. Cybersquatters have robbed businesses of fortunes. The Indian courts have proactively decided many cases related to cybersquatting. However, now it is imperative for the legislature to enact stringent policies and legislation in order to tackle this menace.

The legislature also ought to consider amending the IT Act to include provisions relating to cybersquatting and domain name disputes. The Cyber Appellate Tribunal, established under the IT Act, should deal with such offences as well.

Keeping the best interests of the national and global economy in mind, India should step up its contributions and become a more active participant in ICANN’s initiatives, paving the way for a virtually sound cyber India.