Cyber Squatting and its Legal Position

Domain names are big business nowadays, for the past several years, domain names, the “real estate of the Internet,” have generated substantial returns for savvy investors, who often refer to themselves as “domineers.” Today, a domain name holder can display pay-per-click advertising on a website, and sit-back and let the money roll in while Internet users click on those ads. A single domain name can bring in hundreds of dollars a day, and many domain name holders have thousands or even millions of domain names.

What is Cyber Squatting?

According to Wikipedia ‘Squatting’ means occupying an abandoned or unoccupied space or building, usually residential, that the squatter does not own, rent or otherwise have permission to use.
So Cyber-squatting refers to the bad faith registration of a domain name containing another person’s brand or trademark in a domain name. 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 cyber squatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price.
With the domain prices falling and more top level domains (.biz, .cn, .mob and lately .in) getting accredited, cyber squatters are in business fultime.

Categories of Cyber Squatting

Cyber squatting can be of various categories, most commonly seen is typo squatting, when a cyber squatter registers domain names containing variant of popular trademarks. Typo squatters rely on the fact that Internet users will make typographical errors when entering domain names into their web browsers. Some common examples of typo squatting include:
The omission of the “dot” in the domain name: wwwexample.com;
A common misspelling of the intended site: exemple.com
A differently phrased domain name: examples.com
A different top-level domain: example.org

# Daniyal Waseem of Quetta in Pakistan was using the domain name ‘rediffpk.com’. To this, the NASDAQ-listed Indian firm had contended that the disputed Internet site was identical in part and confusingly similar as a whole to the ‘Rediff’ trademark, for which it has rights. Finding that Waseem had no rights to the REDIFF mark the WIPO Panel concluded the proceeding by transferring Rediff.com.pk to the Indian REDIFF trademark owner Rediff.com India Ltd.

Moreover cyber squatters also rely on the fact that trademark holders often forget to re-register their domain names, because domain registration is for a fixed period and if the owner does not re-register the domain name prior to expiration, then the domain name can be purchased by anybody. Cyber squatters will snatch up a domain name as it becomes available. This process is often referred to as “renewal snatching.”

LEGAL SCENARIO

Some countries have specific laws against cyber squatting beyond the normal rules of trademark law. The United States, for example, has the U.S. Anti-cyber squatting Consumer Protection Act (ACPA) of 1999. This expansion of the Lanham (Trademark) Act (15 U.S.C.) is intended to provide protection against cyber squatting for individuals as well as owners of distinctive trademarked names.
A victim of cyber squatting in the United States has two options:
a. sue under the provisions of the Anti cyber squatting Consumer Protection Act (ACPA), or
b.use an international arbitration system created by the Internet Corporation of 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.

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. 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.
Internationally, the United Nations copyright agency WIPO (World Intellectual Property Organization) has, since 1999, provided an arbitration system wherein a trademark holder can attempt to claim a squatted site. In 2006, there were 1823 complaints filed with WIPO, which was a 25% increase over the 2005 rate. In 2007 it was stated that 84% of claims made since 1999 were decided in the complaining party’s favor.
WIPO is the UN’s specialized agency for developing a balanced and accessible international system in the field of intellectual property rights

POSITION IN INDIA

In India victims of cyber squatting have several options to combat cyber squatting. These options include: sending cease-and-desist letters to the cyber squatter, bringing an arbitration proceeding under ICANN’s rules, or bringing a lawsuit in state or federal court. Whatever strategy a victim of cyber squatting elects to use, that person should not dismiss the serious effects that cyber squatting can have if left unchecked.
A case could be filed with the .in registry handled by National Internet Exchange of India(NiXI) who brings the matter to fast track dispute resolution process whereby decisions are transferred within 30 days of filling a complaint.
Like always our legal system is silent on this matter too, there is no provision in the current or proposed Information Technology Act in India to punish cyber-squatters, at best, the domain can be taken back. Though there is no legal compensation under the IT Act, .in registry has taken proactive steps to grant compensation to victim companies to deter squatters from further stealing domains. Most squatters however operate under guise of obscure names.

Under NIXI, the IN Registry functions as an autonomous body with primary responsibility for maintaining the .IN ccTLD (country code top-level domain) and ensuring its operational stability, reliability, and security. It will implement the various elements of the new policy set out by the Government of India and its Ministry of Communications and Information Technology, Department of Information Technology.

SOME 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.

#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.

Other Global brands like MonsterJobs, PepsiCo, SonyEricsson, Siemens, McAfee, Kingston and search giant Google have of late been at the receiving end of the squatters. Apart from global brands, celebrities domains are also targeted by the squatters like Amitabh Bachhan, Sonia Gandhi, Sushmita Sen and Gul Panag.

Cyber-sqatting is a major concern especially for the domains which involve financial transactions, because usually these squatters may some times fool people and misuse take their credit card details. So many corporates and banks have their special dedicated IT teams which keep a check on all these domains.

Urgent need for definite laws

There is a urgent need for the strict laws in this field, so that these squatters could be punished and these crimes could be avoided in future. The new domain name dispute law should be intended to give trademark and service mark owners legal remedies against defendants who obtain domain names “in bad faith” that are identical or confusingly similar to a trademark. And the plaintiff may elect statutory damages and has discretion to award in damages for bad faith registration. It should act as an important weapon for trademark holders in protecting their intellectual property in the online world.

Part of content replicated from: 123oye.com, cybersquatting.com

Picture Credit: cia.ie

By Sanchit Mehta on July 26, 2010 · Posted in Cyber Law

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