Domain Name Monetization: An Indian Perspective to Cybersquatting

Guiding Businesses

Domain Name Monetization: An Indian Perspective to Cybersquatting

 

The Internet has its profound influence on modem business practices, especially intellectual property, is unmistakable. Unlike in the brick-and-mortar world where consumers purchase products and services in physical stores and thus have clear context as to where, what, and from whom they are purchasing, online consumers have far fewer certain indicators of origin. Accordingly, online consumers must, to a large extent, rely on trademarks and other forms of brand recognition to identify specific goods and those responsible for their manufacture. As the number of global Internet users continues to rise, the need for corporations to maintain an online presence has similarly increased. Growing numbers of businesses have become entirely Internet-based. Accordingly, trademarks serve as uniquely important identifiers in the online environment.

Under the Indian Trademarks Act,1999 as soon as a domain name become a business identifier to the source of the business its given trademark protection. Though the protection to domain names have not been given explicitly under the Act when acquired secondary meaning these domain names have been given trademark protection.

The domain name has become the real estate of the Internet, and for the domainers make money from buying, parking and selling them. Web domain names represent the gateway to Internet connections and access to specific websites. With the growth of commercial activity on the internet, a domain name can be said to be used as a business identifier image also. Their value depends on several parameters, as Web traffic or search engines, and is typically calculated with " quick and dirt " algorithms freely available on the Web. The value of a web domain depends on its capacity to attract traffic, i.e. visitors, and to transform them into cash-generating customers.

Internet domain names have an immense market of their own. The world saw a new change in the field of communications has created endless new opportunities for the citizens of cyberspace. The growing importance on the internet has fermented it into a powerful tool for businesses to promote, advertise, and sell products and services. Unfortunately, cybersquatting and domain name monetization which is the outcome of dishonest and unlawful conduct has also increased and has to be regulated by law now.

According to ICANN, domain name monetization is a new exploitation tool with domain name registrars which is defined as generating revenue from domain names.  The registries that maintain the authoritative database for each top-level domain (e.g., .AERO, .COM, and .ORG) generate revenue, as do the registrars and resellers that charge a fee to those who register domain names.  But the practices that are usually referred to as monetization refer to ways of using domain names to generate income.   Three of these methods – pay per click, parking, and tasting – are described here.

  1. An overview of Cybersquatting
    1. What is Cybersquatting?

Cybersquatting (also known as domain squatting), according to the United States federal law known as the Anticybersquatting Consumer Protection Act, 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 cybersquatter then offers to sell the domain to the person or company who owns a trademark contained within the name at an inflated price. 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.

The practise that's come to be known as cybersquatting 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 cybersquatters. Opportunities for cybersquatters are rapidly diminishing because most businesses now know that nailing down domain names is a high priority.

Cybersquatting, however, is a bit 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 cybersquatters. Cybersquatters usually ask for prices far greater than that at which they purchased it. Some cybersquatters put up derogatory remarks about the person or company the domain is meant to represent to encourage the subject to buy the domain from them. Others post paid links via advertising networks to the actual site that the user likely wanted, thus monetizing their squatting.

2.1.1 What You Can Do to Fight a Cybersquatter

A victim of cybersquatting in the United States has the following two options and in the rest of the word only ICANN procedure:

  1. sue under the provisions of the Anticybersquatting Consumer Protection Act (ACPA), or
  2. use an international arbitration system created by the Internet Corporation of Assigned Names and Numbers (ICANN).

Trademark experts consider the ICANN arbitration system to be faster and less expensive than suing under the ACPA, and the procedure does not require an attorney.

Using the ICANN Procedure

In 1999, ICANN adopted and began implementing the Uniform Domain Name Dispute Resolution Policy (UDNDRP), a policy for the 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 for the complainant to prevail. If the complainant prevails, the domain name will be cancelled or transferred to the complainant. However, financial remedies are not available under the UDNDRP. I nformation about initiating a complaint is provided at the ICANN website.

Suing Under the ACPA

The Anticybersquatting Consumer Protection Act (ACPA) authorizes a trademark owner to sue an alleged cybersquatter in federal court and obtain a court order transferring the domain name back to the trademark owner. In some cases, the cybersquatter must pay money damages.

To stop a cybersquatter, the trademark owner must prove all of the following:

  • the domain name registrant had a 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.

Defences to ACPA lawsuits.

If the accused cybersquatter demonstrates 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.

  1. Domain Name basics

A domain name is your website name. A domain name is an address where Internet users can access your website. A domain name is used for finding and identifying computers on the Internet. Computers use IP addresses, which are a series of number. However, it is difficult for humans to remember strings of numbers. Because of this, domain names were developed and used to identify entities on the Internet rather than using IP addresses.
A domain name can be any combination of letters and numbers, and it can be used in combination of the various domain name extensions, such as .com, .net and more.

Domain names under generic Top-Level Domain Names (gTLDs) may be registered with one of more than two thousand ICANN-accredited registrars, or their resellers. Registrars are accredited by ICANN organization and certified by the registries to sell domain names. They are bound by the Registrar Accreditation Agreement (RAA) with ICANN organization, and by their agreements with the registries. Resellers are organizations affiliated with or under are under contract with registrars to sell domain names and other services offered by the registrar such as web hosting or email mailboxes. Resellers are bound by their agreements with the registrars whose services they sell and are not accredited by the ICANN organization. The registrars remain responsible and accountable for all domain names sold by their resellers. ICANN organization maintains a list of current ICANN-accredited registrars on our website.

  1. Cybersquatting Test

Rule 4(a) as devised by the UDRP mentions applicable disputes in the events wherein:

1. The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

2. There are no rights or legitimate interests in respect of the domain name; and

3. The domain name has been registered and is being used in bad faith. Rule 4(b) explains the evidence of the registration and Bad Faith use. This is also known as the 'cybersquatting test’.

Although the policy requires proof of all these three elements, in practice, the complainant will establish trademark or common law rights in the domain name, and generally, that the registrant operated in bad faith.

  1. ICANN Approach

ICANN implemented the Uniform Domain Name Dispute Resolution Policy (UDRP) in 1999, which has been used to resolve more than 20,000 disputes over the rights to domain names. The UDRP is designed to be efficient and cost-effective. In 2010 alone around 2696 cybersquatting cases were filed with the WIPO Arbitration and Mediation Centre under this Policy involving 4370 domain names across 57 countries, according to WIPO‟s official website. The UDRP is designed to solve disputes which usually arise when a registrant has registered a domain name identical or confusingly similar to the trademark with no rights or legitimate interests in the name and has registered and used the domain name in bad faith Conflicts between two trademark holders or between a trademark holder and a registrant with rights or legitimate interests are not the concern for UDRP. Particularly, the UDRP does not apply if the registrant has been known by the name, has used it in connection with a bona fide offering of goods or services, or has used it for a legitimate noncommercial purpose.

  1. Domain Name Monetization

As discussed above  Domain name monetization if defined broadly refers to ways of generating revenue from domain names. They can be of following types:

  • Affiliate Websites – Think of a good domain name, register it, and then build a website filled with various advertisements for other sites that bear a similarity to your domain name, making money off anyone who clicks on the ads and purchases the advertised products.
  • PPC Websites (Pay-Per-Click) – These are very much like affiliate sites, except the revenue generated comes from PPC advertising systems like Google AdSense and Yahoo Publisher Network.
  • Domain Parking – There are several services, like sedo.com, where you can “park” your domain. The domain will have a variety of keyword-targeted ads, similar to the PPC and affiliate sites mentioned above. You make money off the ads that your parking company puts up. Additionally, you can also list your site for sale at the same time.
  • Domain Leasing – Rent the domain name out to advertisers or other interested parties.
  • Domain Purchase and Resale – Register a domain or buy an existing domain with hopes of reselling it to other domainers.
  • Domain Development – Register a domain name and develop a website for it, with unique content and some sort of business model.

 

With domain names like Insure.com selling for $16 million, it is clear that the value of the online real estate has increased dramatically. Cybersquatters all over the world are registering domain names in bulk, a presumably easy way to ensure a quick profit. Rightsholders are, therefore, increasingly resorting to dispute resolution mechanisms to recover domain names. Domain name disputes about a generic top-level domain (gTLD) name are governed by the Uniform Domain-Name Dispute-Resolution Policy (UDRP). These disputes are entertained by a dispute resolution service provider approved by the Internet Corporation for Assigned Names and Numbers (ICANN), such as the World Intellectual Property Organization (WIPO) and National Arbitration Forum (NAF).

A domain name dispute concerning the country code TLD (ccTLD) name for India (.in) is governed by the.IN Dispute Resolution Policy (INDRP) and is overseen by the National Internet Exchange of India (NIXI).

While the INDRP and the UDRP follow similar procedures, the INDRP remains unique and is distinct from the UDRP. The most significant difference lies in the three criteria which a complainant must satisfy under the respective policies, namely:

  • The domain name must be similar to the complainant’s trademark;

The domain that is in question must be identical to or confusingly similar to a name, trademark or service mark in which you have rights. Note that this can cover unregistered trademarks such as names of the personalities well-known.

  • The registrant must not have rights or legitimate interests in respect of the domain name;

The registrant must not have any legitimate right or interest of his own in the questioned domain name. Legitimate use is roughly when the domain name is being used (or being planned to be used) in connection with a bona fide offering of goods and services before the registrant of the trademark is aware of such a dispute.

  • The domain name must be registered and/or used in bad faith.

The questioned domain must have been registered and used in evil faith. Both these essentials of bad faith must be demonstrated. The UDRP has set out a non- exhaustive list of what institutes bad faith. These consist of diverting users to other sites by creating a possibility of confusion; if the registrant has numerous domains registered; a method made to a party that would be interested in the domain demanding money or its worth significantly in excess of out of pocket expenditures; passive holding of a domain was held to establish bad faith if the impression that the domain was being open for sale was given and boards are progressively concluding that the domains are being held for sale; offering to sell the domain on an auction site has been interpreted as being in bad faith; however, on instances, the fact that a registrant has offered to trade the domain by auction, or accepted to negotiate a price when communicated about the dispute does not automatically establish bad faith for the purposes of UDRP; being tough to interact or undetectable has been interpreted as bad faith.

  • Difference between Indian Domain Name Dispute Resolution and ICANN Domain Name Dispute Resolution
  • The first difference is that under the INDRP, the absence of the conjunctive phrase “and” between the first and second element suggests that to succeed, a complainant may simply satisfy the first element. Alternatively, the complainant may satisfy the second and third element (which are conjoined with the phrase “and”) and not the first. However, under the UDRP, the complainant is expressly required to satisfy all three elements.

However, such a literal interpretation of the elements prescribed under the INDRP can have disastrous ramifications. This can be seen with a disjunctive reading of the elements which implies that a complainant can obtain a remedy against a registrant who has legitimate rights in a domain name which is registered and used in good faith, solely under its similarity to the complainant’s trademark. As a corollary, if a complainant can prove that the registrant has no legitimate interest in the domain name and that it was registered or used in bad faith, the disjunctive interpretation implies that the domain name needn’t be similar to a trademark in which the complainant has rights. However, in such an event, the complainant may not have any locus standi to submit the complaint in the first place. It must be kept in mind that the object of the INDRP is to counter cybersquatting, for which a complainant must satisfy all three elements while seeking a remedy under the INDRP. Therefore, the elements must be interpreted conjunctively.

  • The second difference is that under the UDRP, a complainant must prove that the domain name is registered and being used in bad faith. However, under the INDRP under the disjunctive requirement of the phrase “or”, the complainant is required to prove that the domain name has been registered or is being used in bad faith. The significance of this is that if a complainant proves that the domain name was registered but not used in bad faith or vice-versa, the complainant will be unable to obtain a remedy under the UDRP, but can do so under the INDRP.
  • Indian Judicial trend towards Cybersquatting

Under the Indian trademarks act, 1999 two types of remedy for cybersquatting have been made available:

  • Passing Off
  • Infringement

The first case that came in this regards wasYahoo! Inc. v. Akash Arora & Ors; in which an endeavour was made to utilize the domain name for Internet-related administrations as against domain name. In this case, the defendant launched a website nearly identical to the plaintiff renowned website and also provided similar services. Here the court ruled in favour of trademark rights of U.S. based Yahoo. Inc (the Plaintiff) and against the defendant, that had registered itself as YahooIndia.com. The Court observed that it was an effort to trade on the fame of yahoo’s trademark. The court further added that a domain name registrant does not obtain any legal right to use that particular domain name simply because he has registered the domain name, he could still be liable for trademark infringement.

In Tata Sons Limited and An Vs design ID Limited   the Hon'ble High Court of Delhi Court held that "The utilization of the same or comparable domain name may prompt redirection of clients which could come about because of such clients erroneously getting to one domain name rather than another. This may happen in online business with its quick advance and moment (and the suggestively boundless) openness to clients and potential clients and especially so in territories of particular cover. Customary consumers/clients looking to find the capacities accessible under one domain name might be confounded on the off chance that they unintentionally touched base at an alternate however comparable site which offers no such administrations. Such clients could well presume that the primary domain name proprietor had misspoken to its products or administrations through its limited-time activities and the principal domain proprietor would in this manner lose their client. It is clear therefore that a domain name may have every one of the characteristics of a trademark and could found an action for passing off"

Also in the case of Starbucks corporation v. Mohanraj (Decided on 26th Nov 2009) the respondent's domain name www.starbucks.co.in was confusingly similar to the complainant's domain name www.starbuscks.in., it was contended that the domain name of the respondent is identical and confusingly similar to the complainant's domain name. it was also contended that the respondent has no legitimate interest in the domain name. Further, it was contended that the mark was used by the respondent in bad faith.4 The learned arbitrator held that the disputed domain name was confusing, similar and identical to the complainant and that they had right in the trademark. The respondent had registered the domain name in bad faith and so the domain name should be transferred to the complainant

In Bloomberg Finance L.P., (BF) vs. Mr. Kanhan Vijay, the domain name in question was www.bloomberg.net.in which was registered by Bloomberg Finance L.P. which was also the registered proprietor of the services mark BLOOMBERG in India and abroad, with rights from 1986 as a trademark, trade name and corporate identity establishing widespread reputation and goodwill. The complainant had registered various domain names incorporating "Bloomberg" as the name and therefore was the prior adopter, user and registrant, although it had no reason to adopt or register www.bloomberg.net.in as domain name. The respondent’s bad faith intent was established by the Panel stating that there was a lack of due diligence or evidence on the part of the respondent towards their claims and that the domain was to be transferred to the complainant accordingly.

In the case of GOOGLE Inc. v. Gulshan Khatri(Decided on 6th May 2011). The complainant filed the instant complaint challenging the registration of the domain name in favour of the respondent the grievance of the complainant was regarding the latter's act of adopting identical and identical domain name and that also in respect of similar services of the respondent.

The learned arbitrator held that the impugned domain name was identical and confusingly to the other prior registered domain name and registered trademark of the complainant and directed the registry to cancel the said domain name forthwith and transfer the said domain name in favour of the complainant.

In 2018, October 10 the.INDRP has retrained the respondent from using the domain name and transfer the domain name in favour of the complainant.

  • Conclusion

Thus looking at the aforementioned issues and case laws, the author has realised that there is a great for India to revise its law-making body to accommodate digital crouching and cybersquatting related disputes in the Information Technology Act 2000 and the Cyber Appellate Tribunal ought to be utilized for such offences also. In India, due to the absence of relevant cyber laws, cases are decided within the ambit of trademark laws by interpreting the principle of Passing off concerning domain names in the court and by the.IN dispute resolution policy in India. On account of the problems Indian jurisdiction faced and the various jurisdictions looked into there is an urgent need to draft new legislation in India which would expressly deal with cybersquatting and domain name disputes.

 

 

About the author:

Kitika Singh is currently working as an Assistant Professor at National Law University Jodhpur. She has various publications acrredited to her in the areas of corporate Law and Trademarks Law. She is a Law Graduate from Dr. Ram Manohar Lohia National Law University and has done her master's in Corporate Law Honours from NLU, Jodhpur. Her area of interest are basically competition law, trademarks and competition law interface, corporate social responsibility and arbitration law.

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