Domain Name Disputes: An Economic Analysis of Some Court Cases in India

Author(s): PAPIYA GHOSH

Source: Economic and Political Weekly, Vol. 47, No. 51 (DECEMBER 22, 2012), pp. 52-58
Published by: Economic and Political Weekly
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 SPECIAL ARTICLE

Domain Name Disputes

An Economic Analysis of Some Court Cases in India

PAPIYA GHOSH

Several unique and important issues - both technical

and legal - have arisen since the commencement network
of for the us Defence Department in the 1960s its
the
Ever since the internet was created as a communication
role has only expanded (Knight 2004). With its evolu
internet as a mode of communication and its later
tion from being a mere means of communication to an impor
pervasive influence in business, learning andtantother
mode of carrying on commercial activity, the issue of
spheres of life. The legal issues around "domain naming"
"domain name allocation" has become among its primary con
cerns. A networked
and an economic analysis of court cases in India related medium like internet requires a unique
address for every device in the network for successful commu
to them are discussed and an argument is made that
nication; such a unique address space for the internet is
the principle of "economic efficiency" predominates
achieved by a unique set of Internet Protocol (ip)1 numbers,
these cases. called ip addresses.

The Internet Assigned Number Authority (iana) now under

The Internet Corporation of Assigned Names and Numbers
(icann)2 administers the total set of ip numbers. For accessing
any content of a server such as website via the internet one
needs an ip address of the server which is a set of four
numbers,3 usually written as, e g, 128.0.0.5. But since such
numerical addresses are not easy for human minds to remem
ber and also because ip addresses may get changed when a
website or even the server containing it is moved to a new net
work or when dynamic ips are assigned to the network devices
on their respective intranets, a more convenient naming
scheme called the domain name system (dns) was conceived
of as "a systematic way of generating globally unique and rea
sonably user friendly names" (Knight 2004: 251). Each domain
name is a series of character strings separated by dots, for ex
ample www.google.com. Since the Internet Protocol identifies
the devices by their ip addresses, whenever a user types in the
domain name of a website in the address bar of an internet
browser, the browser automatically translates it to the corre
sponding ip address and the desired website is made accessible
by the user's computer.
In the dns, which operates on the basis of a hierarchy of
names, at the top are the top-level domains (tlds), which are
the rightmost string of characters following the last dot in a
domain name - in the domain name www.google.com for
example, ".com" is the tld. tlds are usually divided into two
categories: the generic top-level domains (gTLDs, tlds with
three or more characters) indicating the type of organisation
registering it and the country code top-level domains (cctlds,
tlds with two characters) indicating the country in which the
The author wishes to thank Satish Jain, Rajendra P Kundu and Taposik
registrar is located. Few examples of gTLDs are .com, .org, .edu
Banerjee for their helpful comments at various stages of the draft.
while .in, .uk, .sg are some examples of over 250 existing
Papiya Ghosh (papiyaghosh@gmail.com) is at the National Institute
cctlds. The next level in the hierarchy is the second level
of Science, Technology and Development Studies, New Delhi.
domain (sld). In the domain names with gTLDs it is the portion

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 ^ SPECI AL ARTICLE

of the domain name immediatelycase

to under unfair
the left ofcompetition
the dot law for the misuse
preced
ing the gTLD, for example "google" in for
name either "www.google.com"
misappropriating the trade reput
while in typical domain names claimant,
involving cctlds
commonly like
known as "www.
the tort of "passing
yahoo.co.in" the word "yahoo" ismaligning
still thehis
sldgoodwill
and the by portion
misrepresenting his
between the sld and tld (.co in this case)
Another is of
kind called the
problem country
associated with domain n
code sld (ccsld). Domain namesof
are normally Cybersquatting,
cybersquatting. allocated bysometimes
a re
"cyber
process of simple registration with anpiracy" is now a widespread
appropriate registrarphenomenon
on w
payment of a fee towards it and
eralthe allocation
domain is prospective
names with done on a demand fr
first-come-first-serve basis without
cial enterprises
attaching are any
registered
importance
by individuals or fir
to the eligibility of the applicantsmotive of earning
for such name. huge profit by selling them to
prises in future. Though earlier only trademar
Domain Name Disputes names were being registered with profit motives o
Because of the fundamental feature of unique mappingthere is a growing trend of registering the names
between ip address and domain name, and also because of its people. Here again depending on the usage of t
ability to identify and distinguish a particular business or indi names by the name holder, cases may be filed unde
vidual, there arises an artificial scarcity4 of domain names. For infringement, trademark dilution, or an action of
example, two persons with the same name x cannot have their under unfair competition.
websites with the domain name x within the same tld. Legal Though domain name disputes arise worldwid
rights in names are derived from three sources: registration ofbeing litigated regularly all over the world, somet
the name as trademark which gives the legal right to use the rise to an altogether different question of the jur
name for particular purposes within a defined geographicalwhich a suit can be filed, in this paper we will no
area; prolonged use of the name for trading by some enterprise allied legal problems emanating out of it. Instead
which in some sense prevents others from using the same only on some of those Indian court cases in which
name in a way as to misappropriate it's trade reputation; and are solely of the nature discussed above.
biological name of a person (Reed 2004). Therefore, apart
from the conflicts between two individuals over domain name Indian Court Cases8

claims, conflicts may also arise between two commercial Although innumerable domain name disputes have been liti
organisations, or between a commercial organisation and angated all over the world since early 1990s, the first such case
individual; both parties holding an entitlement towards the came up before an Indian court only in 1999 with the number
same name. of such cases growing ever since. Interestingly, in deciding
This problem however is more severe when commercial
almost all these cases, the courts have heavily drawn from
enterprises seek domain names similar to their precedents
important registered in other common law countries. They
trademarks or unregistered trade names often have followed
leadingthe toalready
legal established practice to apply the
disputes. These disputes are attributable to facets of trademarktwo
the following law to such cases.9 Examining the cases
facts: first, the internet defies physical boundaries
that have been and any
litigated in India over the past two decades one
thing that is on the internet is visible fromcan find two types
everywhere of cases,
and to namely disputes between a trade
anyone who is connected to the internet.5 markSecond,
owner andunlike
a domain name owner or disputes between
two domain
trademarks which are unique only in a particular name owners, which can be mapped into one of
geographical
area the domain names are globally unique. theBecause
categories websites
discussed in the previous section. In this section
are accessible worldwide, when one of the two ordiscuss
we will more enter
few important cases from both categories.
prises with the same trademark or trade name6 registers
The first it as
domain name dispute that was litigated in India was
its domain name, it gives rise to a conflict Yahoo Inc vsAkashArora
of interest between (ia No 10115 of 1998 in Suit No 2469 of
1998).
the parties since it has an immense potential Being the first
of creating confuof its kind this case constituted an
sion among the customers and in some cases may even
important result
precedent for the resolution of similar issues and
in loss of potential customers to one party. not
This may result
surprisingly in
the judgment in this case was followed in at
least
one party alleging the other for trademark 14 subsequent domain
infringement or name-related cases. In this case
the plaintiff
(trade name) dilution. This problem of infringement or Yahoo Inc, the owner of the well-known trade
dilution
can also arise if someone, without any legalmark "Yahoo!"10
right and the domain name www.yahoo.com offer
to a particu
lar trade name or mark uses a domain name ing
which is identical
a whole range of web-based services, like web directory
to or is a variant of a registered trademarkand
orsearch
trade services
name had
of filed a suit against the defendant
someone else to sell the same or unrelated product.
Akash Even
Arora who in
had started providing similar services as the
plaintiffinfringement
cases where there can be no action for trademark under the name "www.yahooindia.com". The plain
tiff,
because the lines of business are sufficiently in the suit, contended
dissimilar, there that the defendant was using a
is nonetheless a danger of trademark dilution. This
domain name might
that is deceptively similar to the plaintiff's
trademark
occur by threatening the ability of the mark and wasto
in question trying
dis to pass off their services as those
tinguish the proprietor's goods and services
provided
or there
by Yahoo
may Inc.
be a

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SPECIAL ARTICLE

In considering whether this is a case of passing off asYet another significant conflict between two domain name
appealed by the plaintiff, the court referred to the judgmentowners,
in one of them also an enterprise with a popular trade
Montari Overseas vs Montari Industries Ltd (Fao-91/95 and
name, was between Satyam Infoway and Sifynet Solutions.
The significance of the judgment in Satyam Infoway Ltd vs
c m 1123/95) which was a dispute between two parties involving
use of the mark "Montari". The Delhi High Court held thatSifynet Solutions Pvt Ltd (Appeal (Civil) No 3028 of 2004
(from the judgment and order dated 18 November 2003 of the
When a defendant does business under a name which is sufficiently
Karnataka High Court in mfa No 4277 of 2003, Supreme Court
close to the name under which the plaintiff is trading and that name
of India) is clear from the fact that it has been referred to in at
has acquired a reputation and the public at large is likely to be misled
that the defendant's business is the business of the plaintiff, orleast
is a 41 cases subsequent to it. Also it was the first time a do
branch or department of the plaintiff the defendant is liable for an
main name case was brought to the Supreme Court of India.
action of passing off.
The plaintiff in this case, an incorporated company, Satyam
After examining the contentions of both the parties Infoway,
the with several domain names like "www.sifynet.net,
court held in this case that www.sifymall.com,www.sifyrealestate.com" filed a suit in the

When both the domain names are considered, it is crystal clear that
city civil court of Bangalore against the defendant company
the two names being almost identical or similar in nature, there isSifynet Solutions (p) for having registered similar domain names
every possibilty of an internet user being confused and deceived in "www.siffynet.net" and "www.siffynet.com" and carrying out
believing that both the domain names belong to one common sourcebusiness in internet marketing which the plaintiff claimed was
and connection...
an attempt by the defendant to pass off their services as that
and hence following the Montari Overseas vs Montari Indus
of the plaintiffs.
tries Ltd judgment the court granted an injunction against the
defendants restraining them from dealing in goods or servicesDeceptively Similar Names
under any domain name which is identical or deceptivelyThe court in recognition of the prior use of the trade name
similar to the plaintiff trademark "Yahoo!". "Sify" by the plaintiff and the deceptive similarity of the two
Another classic domain name case, although similar in domain names acknowledged that people might get confused
nature with the case already discussed, was Rediff Communi by such similarity. Hence it granted an injunction in favour of
cations Ltd vs Cyberbooth and another (Notice of Motion No,the plaintiff but this judgment was challenged in the high
court by the defendant where it was held that both their lines
Nil of 1999 in Suit No 1881 of 1999 and April 23 1999) in which
of business and trade names being dissimilar there is no likeli
the plaintiff Rediff Communication, an online media company
with registered domain name "www.rediff.com" filed a com
hood of confusion in the minds of people and hence it reversed
the ruling of the lower court. Thereafter, Satyam Infoway
plaint against the defendant for registering the domain "www.
radiff.com" and providing similar services with a motive to further appealed the case in the Supreme Court of India. In
ruling
pass off their services as that of the plaintiff's. In pointing out out the defendant's plea of ignorance about the prior
existence of the trade name "Sify" the court argued that
the necessary conditions to be fulfilled for bringing about an
action of passing off, the court among various other cases The evident media prominence to "sify" and large subscriber base
referred to Kirloskar Diesel Recon Pvt Ltd vs Kirloskar Proprietary could have left the respondent in no doubt as to its successful exist
Ltd (Appeal from Order Nos 1152 to 1154 of 1994 in Interimence prior to the adoption of Siffy as part of its corporate name and
Application Nos 3 to 5 of 1993 in Civil Suit Nos 3 to 5 of 1993) in registration of Siffynet and Siffy.com as its domain names.
which the judge succinctly put that with regard to the action of The court in order to establish the likelihood of confusion of
passing off "...the real question is whether there is as a result ofpublic and consequent loss to the plaintiff argued,
misrepresentation a real likelihood of confusion or deceptionThe similarity in the name may lead an unwary user...to assume a
of the public and consequent damage to the plaintiffs." business connection between the two. Such user may, while trying to

Another case that this court followed was that of Aktiebolaget access the information or services provided by the appellant, put in
that extra 'P and be disappointed with the result...a deceptively simi
Volvo vs Volvo Steels Ltd (oocj Appeal No 570/1995 in Notice of
lar domain name may not only lead to confusion but the receipt of
Motion No 950/95) in which the division bench observed that
unsought for services...It may be difficult for the appellant to prove
"...the crux of the passing off action lies in actual or possible or actual loss having regard to the nature of the service and the means of
probable deception." The court after considering the facts ofthe access but the possibility of loss in the form of diverted customers
the case came to the conclusion that the domain name "radiff. is more than reasonably probable.

com" was registered only to "trade upon the reputation of the

Accordingly the court put a stay on the use of the domain name
plaintiffs' domain name" since the names registered are simi
by the defendant to avert the possible loss to the plaintiff.
lar and their field of operation was overlapping. The court is Of the few other important cases that have been litigated
sued an injunction against the defendant on the ground that in India are the Adobe Systems Inc vs Rohit Rathi and another
(es (os) 1784/2007) and several cases involving Tata Sons. The
If it is found that man's object in doing that what he did was to de
principles that apply to these cases are same as those discussed
ceive...the court will be very much more ready to infer that his object
has been achieved, if the facts tend to show that this is the case and in
to the above three cases; that of the action of passing off for
using deceptively similar names. In Adobe Systems Inc vs Rohit
say that his intention to deceive ripening into deceit gives ground for
an injunction. Rathi, an incorporated company in us, Adobe Systems Inc,
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 SPECIAL ARTICLE

with trademark "adobe" registered in many places including

by registering domain names like jrdtata.com, ratantata.com,
India moved the Delhi High Court to obtain a permanent tata honeywell.com, tatayodogawa.com, tatateleservices.com,
injunction to restrain Rohit Rathi and others from using thetatassl.com, tatapowerco.com, tatawestside.com, tataimken.
domain name "www.adobeinc.org" or any other mark decep
com seeking injunctions restraining the defendant from pass
ing them off as his own and for trademark dilution. The plain
tively similar to the trademark and carry on activities relating
tiff submitted that
to the plaintiffs products. The court in agreement of the plain
tiff's submission that "...the adoption of the said domain name The defendant's use of the impugned mark/name is thus aimed at
by the defendants is a clear and mala fide attempt to ride on diverting the business of the plaintiff and would irreparably damage
the popularity of the plaintiffs trademark adobe and gain the reputation and goodwill of the plaintiff by tarnishing of the asset,

more business and unjustly enrich themselves" and can also i e, trademark tata by the aforesaid activities.
"misdirect traffic...to his website" decreed injunction against The court agreed, saying that "The rendering of internet
the defendant along with an award of a punitive damage of
services is also entitled to protection in the same way as goods
Rs 5 lakh in favour of the plaintiff. and services are, and trademark law applies to activities on
In several cases involving the Tata group, such as the Tatainternet" and ex parte passed a permanent injunction.
Sons Ltd vs Fashion Id Limited (es (os) 1176/2002) (involving In Dr Reddy's Laboratories Ltd vs Manu Kosuri and another
use of domain name tatainfotecheducation.com), Tata Sons vs
(Suit No 317/99, Delhi High Court), the plaintiff, proprietor of
Ghassan Yacoub and Others (cs (os) 1672/1999) (involving use
the trademark dr. reddy's,12 raising concern about the loss to
of the domain name tatagroup.com), Tata Sons Ltd and another
his company on account of the defendant's conduct of register
vs Kirti Sherman and others (cs (os) 2367/98) (involving theing the domain name "drreddyslab.com" argues that
use of domain name tatayellowpages.com), Tata Sons vs Boda
...the defendants use of the impugned trademark/domain name dr
cious Tatas (cs (os) 1991-99) (involving the use of domain reddy's is thus aimed at diverting the business of plaintiff company
name Bodacious-tatas.com), Tata Sons Limited vs WindalsAuto and to earn easy, illegal and undeserved profits by appropriating to
Limited and another (cs (os) 2615/1999) (involving the use of themselves the goodwill, reputation and business of plaintiff company.
domain name tatasons.com), Tata Sons Limited vs Tamal Das The company's losses and damage to its business would run into
several lakhs of rupees
Gupta and Others (cs (os) 266/2004) (involving the use of the
of which the court was convinced and granted permanent
domain name tataindicomdirectory.com), ex-parte11 interim
injunctions were decreed against the respective defendant©injunction against the cybersquatter Manu Kosuri and ex parte
in each case. Whereas a permanent injunction along with decreed that the defendant is restrained from using the
contentious domain name and directed him to transfer the
a punitive damage of Rs 2 lakh was granted ex parte in
Tata Sons Ltd vs D Sharma and another (cs (os) 393 of 2008,name to Dr Reddy's Laboratories. In fact, in both these
Delhi High Court) (involving the use of the domain namedecisions the respective judges recognised the fact that the
tatahire.com), on the ground that the defendant in each defendant was "in the business of registering domain names in
case registered the domain name with mala fide intention India" and in Dr Reddy's Laboratories Ltd vs Manu Kosuri and
to exploit the established goodwill and reputation of the another the court even mentioned that the defendant offered
trademark tata. it for sale but they did not distinguish these cases from other
Apart from these disputes which fall under the first category,disputes, as belonging to a separate category of disputes,
namely "cybersquatting".
namely those in which the defendants intended to make use of
the goodwill earned by someone else's trademark or trade
Cybersquatting
name to sell their own products, other disputes involving
cybersquatters have also been heard by the Indian courts andA notable case of cybersquatting was noticed in Arun Jaitley vs
Network Solutions Pvt Ltd and others (cs (os) 1745/2009 and
interestingly at least two of these cases involve the same defen
dant, Manu Kosuri, the managing director of the Hyderabad
iA No 11943/2009 and 17485/2010), which is a clear example of
exploitation of the popularity associated with the name of a
based software firm, who registered numerous domain names
involving famous trademarks or trade names without consent
person who has achieved a celebrity status in the society. The
from the owners or users of those marks who in these cases arefact of this case is that Arun Jaitley, a well-known political
Dr Reddy's Laboratory and the business house Tata Sons. Thatfigure belonging to the Bharatiya Janata Party, while trying to
his intention behind registering so many domain names was
book the domain name "www.arunjaitley.com" found that it
was already registered with the registrar Network Solutions
to earn profit by arbitraging the domain names to the owners
of the respective trademarks should present no doubt inllc (defendant no 1) which on being contacted advised Jaitley
to make an offer through its Certified Offer Service (cos) for
anyone's mind. Not surprisingly therefore, both Tata Sons and
Dr Reddy's Laboratory filed suits against Kosuri allegingpurchasing it. The cos is actually an auction service, the mini
trademark infringement, trade name dilution or passing off. mum bid for which is over $100. The minimum offer being
In Tata Sons Ltd vs Manu Kosuri (Suit No 159 of 1999, Delhi
substantially higher than the cost of booking a domain name
for a year which is only $35, the plaintiff contended that
High Court), the Tata group filed a suit against Manu Kosuri
saying that the latter "...engaged in the business of registering
defendant no 1 had mala fide intentions behind suggesting the
plaintiff to submit his bid for the domain name through its
domain names in India" for misappropriating plaintiff's trademark

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SPECIAL ARTICLE

auction service and the "intention of the defendants was to

judgments on the use of disputed domain names accorded pro
have a monetary gain by collecting sums of money for the to the rightful owners of the trademarks or the prior
tection
domain name". Their commercial interest became clear when users in case of trade names. Unlike us and several other coun
defendant no 2 transferred the domain name to an auction tries which have enacted their own anti-cybersquatting laws,
India's only legislation regulating cyberspace, Information
site without the notice of the plaintiff in violation of the
interim order of the court restraining any transfer. The court
Technology Act, 2000 along with its several amendments does
submitted that not have any clear guideline for dealing with such disputes. In
the absence of any explicit law or regulation prohibiting cyber
...the name...is a rare combination of two words and the same is pro
squatting, judges decide the cases along the lines of other com
tectable under the provisions of the Trade Mark Act...the right to use
the name Arun Jaitley vests with the plaintiff and does not accruemon
to law countries either by relying on the trademark law in
anyone else...on both the counts, first on the satisfaction of India,
the Trade Marks Act, 1999 or in case of unregistered trade
principles of well known marks envisaged under the trade mark law
names by interpreting the principle of trade name dilution and
and second in view of his personal right and entitlement to use his
passing off for application to domain names. The decisions by
personal name.
the Indian courts invariably are in the nature of temporary or
The court further observes permanent injunctions on the use of the mark by the defendant

...the domain name Arunjaitley.com has been registered in the bad

which often is granted ex parte, without the other party
having to present his view on the plaintiff's contention. In
faith and sufficiently qualifies the tests of determining the domain
some of the cases though, the plaintiffs are also awarded with
name to be called as registered in bad faith. ...the defendant is intend
ing to trade with the domain name arunjaitley.com by putting punitive
the damages.
same on website and asking Mr Jaitley to pay huge sum of the money
To present an economic analysis of the case law16 with
which itself means that there is an unfair attempt on the part of the
respect to domain name disputes let us first look at the issue in
defendant to indulge into cybersquatting...in order to prevent the
general. We divide the entire class of problems into two cate
cyber squatting or trafficking or trading in domain names or the
marks, the trademark law has been stretched...and domain names gories as discussed earlier, namely cybersquatting disputes
may be protected just like the trade marks and other domain name disputes. The generic problem with
which the majority of the aforementioned cases deal with fall
and accordingly granted punitive damages to discourage traf
under the second category and can be summarised as follows:
ficking in domain names and directed the defendant to trans
fer the domain name to the plaintiff. This case, therefore, aiscommercial
a enterprise (say party a) which has earned good
reputation in respect of the goods and services it offers either
marked departure from the other cybersquatting cases decided
registers a trademark (or domain name or both) or his trade
in Indian courts in that it makes a specific attempt to punish
the rent seeking behaviour of the defendants. name gains popularity as a mark. In order to exploit the good
will attached with the mark some individual or enterprise (say
Though there are few more litigations in Indian courts apart
from the cases already discussed, the basic principles under party b) indulges in a fraudulent activity by registering a
which those cases are decided are more or less the same. Butdomain name having deceptive similarity with the mark for
doing business in related or unrelated goods or services. Be
there have been instances where the plaintiff instead of taking
recourse to national laws has approached alternative forums,cause of such perverse activity by party b, some of the poten
including the icann approved dispute-resolution service pro tial customers of party a get diverted to party b — if the party b
viders under its Uniform Domain Name Dispute Resolution deals in confusingly similar goods and services, the customer
without realising that he has landed into a different website
Policy (udrp),13 such as World Intellectual Property Organisa
tion (wipo) Arbitration and Mediation Centre,14 for resolving
finalises his purchase with the latter thereby diverting some of
disputes regarding ownership of domain names, often because party a's business towards party b whereas if party b deals in
unrelated goods or services the customer may develop a wrong
of their fast settlement process. With a 2.5%15 overall increase
in the number of domain name cases brought up before wipo
idea about the line of business of party a and may end up not
between 2010 and 2011, India is not lagging behind; India buying
is anything at all which again means a loss of business to
among the top 15 countries which are party to the cases filed
party a.
with wipo over the last 10 years, both as a complainant and asUnder these circumstances if the right to use the domain
a respondent. Without undermining the importance of udrp
name is assigned to the party engaging in fraud, its impact on
which has already been accepted as an international standard
business will be twofold: First, with the increased importance
of internet as a commercial medium millions of individuals
for domain name dispute resolution outside court litigation,
the focus of this paper rests solely on the analysis of the case
will be attempting to use internet for making several of their
law in India regarding such disputes. purchases and deceiving even a fraction of site users thus will
in general lead to a net loss in the wealth generated out of busi
Economic Analysis ness. Second, entrepreneurs making fruitful investments in
With just a little over two decades passing since the internet
creating goodwill in respect of their trademark or trade name
will have a reduced economic incentive to undertake such
has penetrated India, the laws with respect to internet-related
disputes are still evolving. In all the cases discussed so far
investments, due to apprehension of misappropriation of their
we observe that without exception the courts in delivering effort, thereby leading to a loss in social wealth. On the other

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 SPECIAL ARTICLE

hand, if the courts fail to ensure that the domain name is taken
exploiting the goodwill attached to that name, economic effi
away from the imposters, the customers, who without anyciency
loss will be achieved only if the rights in the name are
of generality can be assumed to make informed decision about
assigned to the party a. However, efficiency would also require
their purchase, would suffer considerable losses in terms
theofcourts to award damages to party a as well.
Now looking back at the cases already discussed we find
time and effort spent on the website if they eventually do not
that in all the cases the outcomes have been consistent with
buy anything or would incur welfare loss if they are deceived
into buying something which is different from what they
wealth maximisation in the allocation of rights to the domain
intended to. So, in general the net gain to the consumer will be Whether or not the courts decide these cases to promote
name.
negative if the courts favour party b. Therefore, overall there
economic efficiency, these judgments are in conformity with
will be a loss to the society as a whole if the courts favourthe
therequirements of economic efficiency. Of all the cases that
party who has registered the domain name with the intent
weof
discussed so far, in Satyam Infoway Ltd vs Sifynet Solutions
Pvt Ltd, the explicit concern of the Supreme Court towards
reaping benefit out of it illegitimately. In contrast, an injunc
wealth maximisation is visible when it held that "Weighed
tion on the use of the domain name by the fraudulent party
in the balance of comparative hardship, it is difficult to
would tend to curb such wasteful activity. However, a mere
transfer of the domain name to the rightful owner willhold
not that the respondent would suffer any such loss as the
generate enough disincentives against indulgence in such actsappellant would unless an injunction is granted". Though in
of fraud. This is so because until the matter is discovered and
pronouncing the final judgment the judge did not talk about
taken to court and thereafter an injunction is granted onethe
caneffect on the consumers/customers, even as he did discuss
earn enough illicit profit by using such domain name toithis
at length earlier in the judgment. In Yahoo Inc vs Akash
advantage. Thus to deter such activities from taking placeArora
the and another, the court by referring to the judgment in
courts should, apart from putting an injunction againstEllora
the Industries vs Banarsi Dass (rfa No 150 of 1967 and
fraudulent use of domain names, also award damages to cocm
the No 79 of 1967) which held that "The tort is based on
economic policy, the need to encourage enterprise and to
plaintiff. Hence, it can be argued that economic efficiency17
can be achieved though the transfer of the domain name toensure
the commercial stability" showed its inclination to in
rightful owner along with the award of damage to him. clude incentives of the entrepreneur in the calculus while
Next we turn towards the second category of problems, pronouncing the judgment.
namely cybersquatting. This is a situation involving two par
The court also says that "...it is obvious that where the par
ties, party a and party b, where an action by party b resultsties
in aare engaged in common or overlapping field of activity,
the
transfer of money from party a to party b; a phenomenon quite competition would take place...there is a grave and
immense possibility of confusion and deception and, there
similar to rent-seeking. A cybersquatter (say party b) in regis
fore,
tering domain names for future premium incurs cost in terms of there is a possibility of sufferance of damage" where
damage can be interpreted to include economic loss. But in
time and effort spent in identifying its targets (one such target
is, say party a), mainly the commercial enterprises and some
this case the court has not taken a full view of the problem and
times celebrities, and then paying fees for registering not
the considered the impact of the decision on total wealth
names. On discovering that the desired name has already been
generation in the society. Also, not in all the cases discussed so
registered, party a can either try to negotiate the transfer offar
thehave damages been awarded by the court; Adobe Systems
domain name to himself or take up the matter with the court. Inc If
vs Rohit Rathi and Tata Sons Ltd vs D Sharma and another
the court allows party b to retain the rights to the name, are
thenthe only two cases from the first category of disputes where
punitive
party a in order to get back the name will in any case have to damages were awarded and from the second cate
gory, punitive damage was granted to the plaintiff only in
pay party b an amount which will make party b clearly better
off. But the net effect is a transfer (of money) from a to b with
Arun Jaitley vs Network Solutions Pvt Ltd and others.
an additional cost to b for undertaking such an activity, making
Conclusions
the social wealth diminish. Therefore, the courts should assign
the rights to the name to its owner. However, because the plain
With the far-reaching influence of internet in information com
tiff cannot register its desired domain name until injunction is
munication and commerce, the legal problems that it throw
granted, some social loss is incurred meanwhile. To avoid such
have to be analysed from different perspectives. The incre
socially wasteful activity from taking place damage shoulding
also number of domain name disputes worldwide poses a re
challenge to the policy adopted by icann with regard to th
be granted to the plaintiff. Economic efficiency would therefore
require both the award of injunction against the cybersquatter
domain name registration, namely, the first come first serve
and damage to the rightful owner. basis in which the registration is done. Though several cou
Thus, economic analyses of both categories of problems
tries have or are formulating their own laws to mitigate thi
show that in the current context in which courts may either
problem, India still does not have its own legislation in th
direction. Therefore, from a detailed discussion on the cas
assign property right to the domain name to the established
commercial enterprise (party a) whose trademark or name
judgments in Indian courts, be it that of cybersquatting o
has been registered by someone else or it may assign the right
simply an attempt to misuse already famous marks for one
to the party (party b) who has registered it with the intent
ownof business, what emerges is that in absence of any explici

Economic & Political weekly »aavi December 22, 2012 vol xlvii no 51 57

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SPECIAL ARTICLE

the fact that courts do not always take economic consideration

legislation to address this problem the principles of trademark
into account while delivering a judgment, the law with respect
law, aspects of unfair competition law and trade name dilution
to domain
are interpreted by the courts to apply to these disputes. An name disputes is in conformity with the principle of
economic efficiency.
economic analysis of the case law shows that notwithstanding

NOTES 12 At the time the case was heard the trademark without making anyone worse off. But because
was pending registration but the plaintiff can of the inherent limitations in the concept of
1 Internet protocol is the principal communica
be said to be the proprietor "by virtue of priori Pareto efficiency, in many instances the
tion protocol used for transporting information
between devices that are internetworked. ty in adoption, continuous and extensive use notion of efficiency that is used is based on
and advertising..." (Para 6 of the judgment text Kaldor criterion which says that a movement
Internet is not the only computer internetwork
that uses Internet Protocol for communication. of Dr Reddy's Laboratories Ltd vs Manu Kosuri from one state to another is better if gainers
and another). can compensate the losers and still be better
Any intra-network may use the same protocol
13 Cases were also decided by eResolution pan off. If such a movement is possible then clear
to communicate amongst themselves even
elists and were originally posted at the eReso ly the total wealth after the movement is larg
when they are not connected to the internet.
lution site. eResolution ceased handling UDRP er than that before it. Therefore importance
2 A not-for-profit corporation formed in 1998 has been attached to the maximisation of
disputes in December, 2001 but those judg
specifically to control and coordinate Internet wealth in this criterion. Here, resting on the
ments are available at http://www.disputes.
domain name system and develop policy on Kaldor criterion, an alternative will be said to
org/decisions/ last viewed on 21 March 2012.
them. One important function of ICANN is that be efficient if it maximises total social wealth.
14 eBay India Private Limited vs Surjeet Singh/
it helps to coordinate how IP addresses are sup See (Jain 2010) for a discussion on the concept
PrivacyProtect.org, Case No D2011-0214, Ben
plied to avoid repetition or clashes. ICANN is of economic efficiency as applied in economic
nett Coleman & Co Ltd vs Steven S Lalwani, Case
also the central repository for IP addresses, analysis of law.
No D2000-0014 and Bennett Coleman & Co Ltd
from which ranges are supplied to regional reg
istries who in turn distribute them to network vs Long Distance Telephone Company, Case No
D2000-0015, Rediff.com India Ltd vs Pluto Do REFERENCES
providers. Retrieved from http://www.icann.
main Services Private Limited, Case No D2008
org/en/about
1738, Marriott International Inc and Marriott Chase, Adam (1998): "A Primer on Recent D
3 Under the current system of Internet Protocol, Name Disputes", Virginia Journal of L
Worldwide Corporation vs Avalon Resorts Pvt
IPv4, IP addresses are sets of four numbersLtd, Case No D2010-0172 are only few of the Technology, 3,1522-1687.
separated by dots. However, with the experts cases decided by WIPO where India is either Cooter, R and T Ulen (2000): Law and Econ
realising well in time that soon the addressthe respondent or the complainant. The de (3rd ed) (Boston, Massachusetts: Addi
space will be exhausted, the Internet Engineer tailed decisions are available at http://www. Wesley Longman, Inc).
ing Task Force (IETF) had advised in the 1990s wipo.int/amc/en/domains/decisions.html last Jain, S K (2010): "Introduction" in S K Jain
that the communication protocol should accessed on 17 April 2012. Law and Economics (India: Oxford Unive
migrate to an upgraded system called IPv6. Press).
15 The percentage increase in domain name cas
More than a decade after the IETF had recom
es has been calculated based on the data Knight, Graham (2004): "Internet Architecture" in
mended, the process of migration has finally
available in http://www.wipo.int/amc/en/ H Bidgoli (ed.), The Internet Encyclopedia,
started and with IPv6 succeeding IPv4 the way domains/statistics/ Volume 2 (Hoboken, New Jersey and Canada:
IP addresses are written now will undergo a
16 See (Cooter and Ulen 2000) for an excellent John Wiley & Sons, Inc), 244-63.
significant change.
Reed, Chris (2004): Internet Law: Text and Mate
introduction to the economic analysis of law.
4 More specifically, the scarcity is with respect to rials (Cambridge, UK: Cambridge University
17 In economics several different notions of effi
the SLDs. The main reason behind such scarcity Press).
ciency are used, Pareto efficiency being the
is that every individual or commercial enter "What
most important of them all which is defined as: Does ICANN Do?" and " What's the Effect of
prise would want to use a domain name that ICANN's Role and Work on the Internet?",
An alternative is Pareto optimal (or efficient)
would clearly indicate its association with the
if there does not exist any other alternativeretrieved from http://www.icann.org/en/ab
domain name.
which can make some individuals better off out/ accessed on 17 April 2012.
5 Of course, there are exceptions like mainland
China where several of the Google websites are
not accessible to conform to specific Chinese
laws. Survey
6 Two different enterprises may have the same
September 8,2012
trademark only if they are registered in two dif
ferent regions. Similarly, same trade name can Revisiting Communalism and Fundamentalism in India
be used by two enterprises either when they are
by
used to deal in unrelated goods and services or
they are used in different regions or both. Surya Prakash Upadhyay, Rowena Robinson
7 In Banyan Tree Holding Private Limited vs A Mu
rali Krishna Reddy and another (Case no CS This comprehensive review of the literature on communalism - and its virulent offshoot, fundamentalism
(OS) No 894/2008), though the case was that
- in India considers the various perspectives from which the issue has sought to be understood, from
of the action of passing off of the services of the
defendants through the registration of a decep precolonial and colonial times to the post-Independence period. The writings indicate that communalism
tively similar word mark and domain name,
is an outcome of the competitive aspirations of domination and counter-domination that began in
the real question before the court was whether
the court has territorial jurisdiction to enter colonial times. Cynical distortions of the democratic process and the politicisation of religion in the
tain the present suit.
early decades of Independence intensified it. In recent years, economic liberalisation, the growth of
8 The court cases discussed are retrieved from
the section "Case Laws" in Indlaw's legal dataopportunities and a multiplying middle class have further aggravated it. More alarmingly, since the
base www.indlaw.com accessed till 17 April1980s, Hindu communalism has morphed into fundamentalism, with the Sangh parivarand its cultural
2012.
politics of Hindutva playing ominous roles.
9 See (Chase 1998) for a discussion on the pros
and cons of applying trademark law to settle
For copies write to:
domain name disputes.
10 At the time the case was heard the mark was Circulation Manager,
either registered or was pending registration in Economic and Political Weekly,
169 countries with its registration pending in 320-321, A to Z Industrial Estate,
India.
Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013.
11 An ex parte decision is one in which the judge
pronounces judgment without requiring all the email: circulation@epw.in
parties to be present at the time of proceeding.

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