India: Taking a balanced approach

Is the management of your domain name portfolio an integral part of your business management strategy? Is domain portfolio management in sync with your corporate objectives and goals? These are some of the questions that corporate legal departments are struggling to answer. Domain name selection and registration are becoming increasingly integral to a company’s branding strategy, making some kind of overall strategy necessary. With more and more consumers using online search engines to locate companies, products and businesses, the selection of a brand name is closely linked to the availability of a domain name and vice versa.

Until 2010, it was relatively straightforward for a firm to manage its domain names, as there were only a small number of top-level domains (TLDs), which were tightly regulated. Beyond the typical ‘.com’, ‘.net’ and ‘.org’, there were only a handful of other generic TLDs (gTLDs), including ‘.tv’, ‘.biz’, ‘.mobi’, and ‘.us’. However, this all changed in 2012, when the Internet Corporation for Assigned Names and Numbers (ICANN) announced the expansion of the domain name space.

The first teaser came in the form of the ‘.xxx’ TLD. The launch of this TLD prompted a headlong rush, with many legitimate businesses and institutions defensively registering their names in the new TLD in order to protect them from falling into the wrong hands and being used to host adult content. It is widely believed that the sucess of the ‘.xxx’ TLD was in part funded by the non-adult entertainment world, because ‘.xxx’ domain names had the potential to damage a brand.

However, with the large number of new gTLDs about to launch and expand the internet space, future product/trademark development will have to consider co-existence – unless, of course, you have limitless resources for monitoring and enforcing your rights in this space.

‘.in’ ccTLD

In 2005 India opened up the country-code TLD (ccTLD) ‘.in’, allowing unlimited second-level registrations under ‘.in.’ and unlimited registrations under previously structured zones, such as ‘.co.in’ and ‘.org.in’. With a growth spurt in the country’s young, digitally savvy population, there was a rush to acquire ‘.in’ domain names. This opportunity was also exploited by cybersquatters. Thus, as soon as the sunrise period giving preference to Indian trademark holders was over, a number of domain names incorporating well-known marks were snapped up by third parties. In 2005 the ‘.in’ registry formulated the ‘.in’ Domain Dispute Resolution Policy (INDRP), along the same lines as the Uniform Domain Name Dispute Resolution Policy (UDRP), in order to address complaints from rights holders. The grounds on which a complaint can be filed under the policy are as follows:

• The domain name is identical or confusingly similar to a name, trademark or service mark in which the complainant has rights;
• The registrant has no rights or legitimate interests in respect of the domain name; or
• The domain name has been registered or is being used in bad faith.

The first complaint under the INDRP was filed in 2006. Since then, over 600 complaints have been filed and disposed of expeditiously under the INDRP. As of the time of writing, 55 complaints had already been decided in 2014. It is not only foreign brand owners – including Google, Dell and Disney – that have successfully acquired domain names from cybersquatters under the INDRP; Indian companies – including Idea Cellular, Airtel and Pantaloon – have also used the policy to stop third parties from using infringing domain names and to obtain their transfer.

Court decisions

The stage for the INDRP was possibly set by the courts’ clear treatment of domain names as trademarks and the establishment of principles for their protection. In Acqua Minerals Ltd v Pramod Bose, which concerned the domain name ‘.bisleri’, the Delhi High Court opined that: “with the advancement of internet communication, the domain name has attained as much legal sanity as a trade name. Since the services rendered in the internet are crucial for any business, the domain name needs to be preserved so as to protect such provider of services against anyone else trying to traffic or usurp the domain name.” The court further held that: “A domain name is more than an internet address and is entitled to equal protection as a trademark.”

In M/s Satyam Infoway Ltd v M/s Sifynet Solutions Pvt Ltd the Supreme Court observed that: “The use of the same or similar domain name may lead to a diversion of users which could result from such users mistakenly accessing one domain name instead of another. This may occur in e-commerce with its rapid progress and instant (and theoretically limitless) accessibility to users and potential customers and particularly so in areas of specific overlap.”

Territorial jurisdiction based on accessibility

In Banyan Tree Holding Pvt Ltd v Murali Krishna Reddy the two-judge bench of the Delhi High Court laid down guidelines to clarify forum choice based on a website’s accessibility. In this case the plaintiff argued that since the defendant’s website listed its products together with their price, it could be concluded that the defendant was offering goods for sale to all consumers that could access its website, regardless of where they were based.

However, the court found that in a trademark infringement or passing-off action where the defendant is being sued on the basis that its website is accessible in the forum court, it must be shown that the defendant has targeted its website specifically at customers within the court’s jurisdiction.

The court clarified that the mere posting of an advertisement by a defendant depicting its mark on a passive website that does not enable consumers to enter into a commercial transaction cannot be used to invoke the court’s jurisdiction. It must be shown that the defendant’s use of the website was aimed at a commercial transaction with the website user.

The court did allow evidence procured through ‘trap orders’ and ‘trap transactions’. However, it clarified that the fairness of the transaction, the nature of the goods or services offered for purchase and whether customers were required physically to verify their quality would all be relevant factors. Moreover, a lone trap transaction is insufficient. Evidence of trap transactions with supporting materials must be produced for the court’s scrutiny.

Expansion of domain space

In 2012 ICANN anounced that the domain space would be expanded to include a raft of new gTLDs. This represented a paradigm shift unprecedented in the comparatively short history of the Internet.

The application fees for the new gTLDs are high – it cost $185,000 (approximately Rs11 million) merely to participate in the application process. As well as this initial fee, successful applicants must pay annual renewal charges of $25,000 (approximately Rs150,000). Despite these high fees, several Indian companies have already applied for gTLDs, including:

• ‘.dabur’ by Dabur India Ltd;
• ‘.hdfcbank’ by HDFC Bank Ltd;
• ‘.airtel’ by Bharti Airtel Ltd;
• ‘.bharti’ by Bharti Enterprises (Holding) Private Ltd;
• ‘.idn’ by Nameshop;
• ‘.indians’ by Reliance Industries Ltd;
• ‘.infosys’ by Infosys Ltd;
• ‘.infy’ by Infosys Ltd;
• ‘.sbi’ by the State Bank of India’
• ‘.shriram’ by Shriram Capital Ltd;
• ‘.star’ by Star India Private Ltd;
• ‘.statebank’ by the State bank of India;
• ‘.tata’ by Tata Sons Ltd;
• ‘.tatamotors’ by Tata Motors Ltd;
• ‘.tvs’ by TV Sundaram Iyengar & Sons Ltd; and
• ‘.web’, ‘.shop’, ‘.bank’, ‘.law’, ‘.music’, ‘.news’, ‘.blog’, ‘.movie’, ‘.baby’, ‘.store’, ‘.doctor’, ‘.hotel’, ‘.play’, ‘.home’, ‘.site’, ‘.website’, ‘.click’, ‘.online’, ‘.one’, ‘.ping’, ‘.space’, ‘.world’, ‘.press’, ‘.chat’, ‘.city’, ‘.deals’, ‘.insurance’, ‘.loans’, ‘.app’, ‘.host’ and ‘.hosting’ by Radix Registry – the new business unit/entity of India-based domain registrar Directi, which is located in the United Arab Emirates. While Directi applied for 30 of the above suffixes through UAE-based Radix, it applied for the ‘.ping’ TLD from India.

The question of how to protect your brands with several hundred new gTLDs being rolled out, many of them with open registration policies, is troubling many rights holders. However, two initiatives by ICANN are proving useful in this regard.

The first is the Trademark Clearinghouse. This central and standardised tool is helpful for minimising overall domain registration and protection costs for brand owners. It can be used to protect brands by ensuring that validated trademarks get first priority for registration and notifying rights holders if a third party registers a domain name that corresponds to their trademark.

The second initiative is the Uniform Rapid Suspension (URS) system. This is designed for handling clear cases of trademark infringement, where there are no disputed questions of material fact. The sole remedy that the URS offers is suspension of a domain name for the balance of the registration period; it is much cheaper in terms of official fees than the UDRP. The core requirements for a URS complaint are substantially similar to those in a UDRP proceeding. Within two business days of filing, the URS provider will conduct an administrative review of the URS complaint to ensure that it complies with the filing requirements. If the complaint complies with the URS filing requirements, the URS provider will notify the relevant registry operator, which locks the domain within 24 hours.

Rights holders are being profoundly affected by the new gTLDs. While the expansion offers an opportunity to acquire new TLDs that incorporate trademarks, rights holders must now spend time and money in order to prevent cybersquatting. Overall, the new gTLD roll-out can be seen as a compulsory expansion of the digital market.

A modest and balanced approach to the new gTLDs seems to be most appropriate (ie, neither exhausting your entire marketing budget by registering all available options nor entirely abstaining from engaging in the process).

Depending on your business activities, one recommended strategy is to establish a strategic and decisive list of domains to be registered per brand, as well as a supplementary watch list of tentative names. This tentative list might include domain names in which a firm is interested, but in relation to which it prefers to take a wait-and-see approach in order to assess how these extensions pan out in terms of traffic and popularity.