The rapid growth of on-line activity in the last two decades has stamped its indelible footprints on every aspect of human existence. What was initially confined to areas of academic engagement and information sharing, expanded in the late 1990s and 2000s with globalisation and liberalisation, giving corporates and business ventures wider market exposure and access.
An essential component of this was effective dissemination of information so as to garner attention and optics with a view to capitalise market opportunities. To compete with/ cater to market dynamics driven by larger competition, the logical step for businesses was optimisation of resources while exploring avenues of wider market reach to improve stakeholder returns. E-commerce was a natural solution that provided the perfect avenue for such market consolidation and a natural corollary/enabler was an address that identifies and marks a unique contact gateway- a domain name- a virtual identity for meaningful business interface.
A domain name enables two-way communication, commerce and business transactions and has an important role in the identity and existence of any venture. Hence the security and integrity of the domain name is of paramount importance; to ensure success of the business, protect the goodwill it enjoys and also to prevent any misuse, conflict of interest or poaching. While internet scams, cyber fraud etc have found place in everyday vocabulary, Cyber-squatting has taken a larger dimension in business transactions. Unscrupulous operators register domain names closely resembling well-known brands, create convincing websites, and project themselves as authorised distributors, franchise partners, recruiters, or investment facilitators, negatively impacting the integrity and legitimate opportunities of the business house.
The vexatious issue of domain name misuse, and the solutions thereof was recently discussed by the Delhi High Court- a decision which could pave the way forward for business houses facing this problem.
Case background and Court observations
In Dabur India Limited v. Ashok Kumar & Ors., the Delhi High Court, considered a batch of suits involving the misuse of well-known trademarks through the registration of infringing domain names by unknown third parties. The court in this case, had not only addressed the issue of trademark infringement itself but had also taken up a comprehensive review of the larger ecosystem that facilitated the registration and operation of such domain names in the digital space. Court analysed the domain name registration framework in detail, including the assigned roles and responsibilities of key stakeholders such as Domain Name Registrants, Domain Name Registrars (DNRs), Registry Operators, and ICANN, and their obligations in ensuring that domain names do not infringe third-party intellectual property rights or become instruments of fraud. In doing so the Court also dealt with the issue on whether intermediaries could be held liable in cases of domain name misuse and whether they could claim immunity under the safe harbour provisions of Section 79 of the Information Technology Act, 2000. It was clearly stated that such protection is not absolute and must be viewed in context of the contractual, statutory and due diligence obligations imposed on them.
The Court pointed out that one of the main challenges that the owner of a trademark is faced with during instances of domain name infringement is the difficulty in identifying the fraudulent entities responsible for effecting such registration and use of such infringing domain. In earlier times, the details of the domain name were accessible to the public through the Whois databases. However, the details available were often incomplete, incorrect or fictitious. The Court further observed that, in recent times, following the implementation of privacy focused measures introduced under the General Data Protection Regulation (GDPR), the Registrant’s information could be masked, preventing the public from viewing the details, making it more difficult for trademark owners to identify infringers and pursue timely enforcement actions.
The Court further observed that while trademark owners bear the burden of continuously monitoring and policing unauthorised use of their marks online, they are often unable to obtain effective relief without resorting to judicial intervention. In the Court’s view, many instances of online trademark abuse could potentially be prevented at an earlier stage through more stringent verification mechanisms within the domain name registration process. The judgment notes that the absence of effective verification procedures enables unscrupulous registrants to exploit the system, infringe trademark rights, and deceive unsuspecting consumers through fraudulent websites and impersonation.
Directions by the Court
Recognising these gaps, the Court delivered a list of directions aimed at enhancing accountability and transparency within the domain name registration ecosystem. The Court provided a clear explanation of the structure in which the domain name ecosystem operates. Each of the key stakeholders within the ecosystem is bound by a network of contractual frameworks. The Court observed that these regimes impose various obligations on DNRs and Registry Operators to prevent domain names from being used in a manner that infringes third party rights. The Court’s directions were not restricted to DNRs and Registry Operators but also included government authorities, banks, and other stakeholders in the digital ecosystem.
Some of the key directions to the DNRs and Registry Operators include the requirement to verify registrant details at the time of registration and to maintain accurate and updated registrant information. Further, it was directed that as part of the DNR’s privacy protection feature, the registrant details should not be masked as a default and such an option, if opted for, would incur additional cost implications. They were also directed to disclose the registrant details within 72 hours, on receipt of request from persons having a legitimate interest in accordance with Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
The Court further directed Registry Operators to permanently block domain names that are identified to be infringing or illegal pursuant to a court order and not release such domain names back into the pool of available domain names in a manner that would facilitate their re-registration. In particular, the Court emphasised that, with respect to well-known, invented, arbitrary or fanciful marks, which have attained reputation and goodwill in India, the enforcement of injunction orders should not extend only to the infringing domain name but also to the deceptive variants, such as alternative extensions, alphanumeric variations, and similar permutations.
The Court also considered the practical difficulties in enforcing court orders against DNRs operating outside India. In order to address this, the Court directed all DNRs operating in India to appoint Grievance Officers as per the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 and make their details publicly available, so as to enable implementation of court orders. The Court further stated that failure to comply with these directions may invite appropriate action against the concerned entities. The Office of the Controller General of Patents, Designs and Trade Marks was also directed to publish the official details of the proprietors of well-known trademarks along with the list of well-known trademarks on the Intellectual Property Office website.
The court acknowledged that the instances of domain name misuse are not isolated incidents and often involve recurring acts of infringement by way of creating infringing alternative domain variations. To prevent the aggrieved trademark owner from being compelled to institute fresh proceedings each time a new infringing variant emerges, the Court granted ‘Dyamic+’Injunction. Such relief is intended to restrain not only the infringing domain name which forms the subject matter of the suit, but also deceptively similar variations which may be created to evade the Court orders.
Conclusion
In Dabur India Limited v. Ashok Kumar, the Court took a different approach by shifting focus from traditional enforcement mechanisms to the establishment of preventive measures to deal with cases of domain name misuse. Through this far- reaching judgement, the Court has sought to enhance accountability and transparency in the domain name registration ecosystem to prevent fraudsters from impersonating well-known marks in the digital marketplace. The ruling is a significant step forward, as it enables proprietors of trademarks to protect their rights and associated goodwill of their marks in the digital environment, while at the same time ensuring that consumers are not misled or induced to fall prey to fraudulent activities.
It is significant to note that the Court has aimed to address the problem at its origin rather than merely reacting to its consequences. By seeking to improve transparency, strengthening verification mechanisms, and facilitating the identification of bad-faith actors, the Court has attempted to create a more effective framework for protecting trademarks in the digital environment.
Written by
Malavika K
