CYBERSQUATTING: A BRIEF LEGAL

OVERVIEW Cybersquatting, is a crime against the laws and

regulations of cyber law. 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 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.
Cybersquatting however, is a bit different in that the domain
names that are being "squatted" are (sometimes but not always)
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 or defamatory remarks about the person or
company the domain is meant to represent in an effort to
encourage the subject to buy the domain from them.

The World Intellectual Property Organisation (WIPO) saw

a 20 per cent increase in the number of cyber squatting (abusive
registration of trademarks as domain names) cases filed in 2005
as compared to 2004. In 2005, a total of 1,456 cyber squatting
cases were filed with WIPO's Arbitration and Mediation Centre,
according to a WIPO release. HISTORY:- The practice that's
come to be known as cyber-squatting 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 cyber-
squatters. ABUSIVE DOMAIN REGISTRATION SYSTEM:- In
the new e-economy it is commercially prudent for a company to
have an easily traceable address in the cyber-space. This
requires registration of a particular domain name and web site
under the domain name system (DNS). However, this practice
has spawned a new industry in valuable domain names.
Since the process of registration of domain names is simple and
on 'first come, first served' basis, the only thing that should be
avoided is the issuance of duplicate domain names. These
practices include the deliberate bad faith registration as domain
of well-known trademarks in the hope of being able to sell the
domain to the owners of those marks (or rivals owners) or simply
to take unfair advantage of the reputation attached to those
marks. In technical parlance, this is called cyber squatting.

There have been several instances of companies, individuals or

governments trying to take generic domain names away from
their owners by making false claims of trademark violation.
Sometimes they are successful. This practice is called "Reverse
Domain Hijacking".

For example, little known Heathrow Land Development in Florida

attempted to use their narrow one-class trademark and the UDRP
process to acquire heathrow.com. IN SUPPORT OF
CYBERSQUATTING:- There are several people who advocate
pro-squatting policies as well. The major contention is that:- •
When a system of registration exists on a first come first serve
basis exists; there is nothing wrong in taking advantage of it to
earn money. • Another argument professed by such people is
that since the cyber-squatters usually don’t deal in the same
goods that the targeted entity deals in, there is no question of
affecting the customer base of the said identity.

These ideas are merely desperate attempts by opportunists who

do not wish to be deprived of the chance of making a quick buck.
Quite clearly, the impact of such policies would be to create
confusion in the minds of consumers. Developments in the
Domain Name Registration System:- The combined effect of
developments such as: the use of 'Whois' privacy services for
registrations; the growth in the number of professional domain
name dealers and the volume of their activity; the use of
computer software to automatically register expired domain
names and their 'parking' on pay-per-click portal sites; the option
to register names for free for a five-day 'tasting' period; the
growth in the number of accredited registrars; is to create
greater opportunities for mass registration of domain
names. LEGAL SCENARIO:- Domain name disputes involving
alleged bad-faith registration are typically resolved using the
Uniform Domain Name Resolution Policy (UDRP) process
developed by the Internet Corporation for 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. Countries such as China and Russia
do not view cybersquatting in the same way or degree that US
law does.

People often choose the UDRP (Uniform Dispute Resolution

Process) created by ICANN because it is usually quicker and
cheaper than going to court, but courts can and often do overrule
UDRP decisions. In Virtual Works, Inc. v. Volkswagen of America,
Inc. (a dispute over the domain vw.net), the Fourth Circuit Court
of Appeals created a common law requirement that the
cybersquatter exhibit a bad faith intent in order to confer liability.
This means that domain names bearing close resemblance to
trademarked names are not per se impermissible. Rather, the
domain name must have been registered with the bad faith
intent to later sell it to the trademark holder.

Under UDRP policy, successful complainants can have the names

deleted or transferred to their ownership (which means paying
regular renewal fees on all the names or risk them being
registered by someone else).

Australia is another example - auDA requires anyone registering

a .com.au domain to have a valid entitlement for that domain -
ie. a registered business name with an Australian Business
Number (ABN) issued by the Australian Taxation Office. However,
any Australian citizen over the age of 16 can obtain an ABN
(which is free) and use it to register as few or as many domain
names as they like.

However in the UK, if someone has registered a domain name

incorporating a trademark, then the domain name holder could
be in breach of section 10 of the Trademark Act, 1994 that states
“a person infringes a registered trademark if he uses identical or
similar to the registered trademark in relation to identical or
similar goods or services". Using the ICANN Procedure: In
1999, after assuming control of domain name registration,
ICANN adopted and began implementing the Uniform Domain
Name Dispute Resolution Policy (UDNDRP) a policy for 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 in order for the complainant to prevail. If the
complainant prevails, the domain name will be cancelled or
transferred to the complainant, but financial remedies are not
available under the UDNDRP. WIPO:- 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. The
complainant selects the provider and all costs involved (expected
to be approximately US $1000) must be borne by him. 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. Anti Cybersquatting Consumer
Protection Act The Anticybersquatting Consumer Protection Act
(also known as Truth in Domain Names Act), a United States
federal law. was sponsored by Senator Trent Lott, and enacted
on November 29 of the same year.

METHOD - It makes people who register domain names that are

either trademarks or individual's names with the sole intent of
selling the rights of the domain name to the trademark holder or
individual for a profit liable to civil action. It authorizes a
trademark owner to sue an alleged cyber-squatter in federal
court and obtain a court order transferring the domain name
back to the trademark owner. In some cases, the cyber-squatter
must pay money damages. In order for a trademark owner to
bring a claim under the ACPA, the owner must establish

• The domain name registrant had 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, The limitation
of the Act is the impact it has on settling disputes: where two
parties have a dispute over a domain name, and the domain
name owner has a lessor interest in the domain and is willing to
settle the dispute, if the domain name owner offers to exchange
the domain name for compensation (such as the cost of
reprinting letterhead, business cards, and other expenses), that
offer can constitute "acting in bad faith to profit from the mark".
This makes domain name disputes harder to
resolve. TYPOSQUATTING:- Typosquatting, also called URL
hijacking, is a form of cybersquatting which relies on mistakes
such as typographical errors made by Internet users when
inputting a website address into a web browser. Should a user
accidentally enter an incorrect website address, they may be led
to an alternative website owned by a cybersquatter. • A common
misspelling of the intended site: exemple.com • A misspelling
based on typing errors: xample.com or exxample.com • A
differently phrased domain name: examples.com • A different
top-level domain: example.org Once in the typosquatter's site,
the user may also be tricked into thinking that they are in fact in
the real site; through the use of copied or similar logos, website
layouts or content. Sometimes competitors of the victim site will
do this.

Example of typosquatting

The National Austrian Public Service Broadcaster "ORF" was

typosquatted by 0rf.at a net art site. STATISTICS:- According
to WIPO report Geneva, March 12, 2007 WIPO/PR/2007/479: •
The number of cybersquatting disputes filed with the World
Intellectual Property Organization (WIPO) in 2006 increased by
25% as compared to 2005. • In 2006, a total of 1,823
complaints alleging cybersquatting were filed with WIPO's
Arbitration and Mediation Center, representing the highest
number of cybersquatting cases handled by WIPO since the year
2000. • A total of 9,389 (97% of total cases) UDRP cases
received by the Center have so far been resolved.

Cyber law - Blogs, News and Articles : The Internet, Cyber

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GLOBAL CYBER-SQUATTING CASES Panavision International,

L.P. v. Toeppen, In December 1995, Toeppen applied for and
received registration of the domain name panavision.com.
Panavision International ("Panavision") is a well-established
manufacturer of camera and filming equipment. Panavision
attempted to register panavision.com, but was informed of
Toeppen's registration of the domain name. Panavision notified
Toeppen of its desire to use the panavision.com domain name,
and Toeppen offered to relinquish the domain name for $13,000.
Panavision refused to pay, and Toeppen, in response, also
registered panaflex.com. Panavision sued Toeppen on a federal
trademark dilution claim. Federal District Court granted
summary judgement in favor of Panavision, enjoined Toeppen
from further use of the web site, and ordered him to relinquish
the registration of the domain names to Panavision.
Federal District Court's findings: (1)Panavision was a famous
mark. (2) Toeppen's business of registering domain names to be
sold later qualified as a commercial use. (3) Toeppen's use
diluted Panavision's mark by preventing it from identifying and
distinguishing its products on the Internet. Marks & Spencer
PLC vs. One in a Million The High Court of Justice, Chancery
Division, enjoined the activities of two cyber dealers and their
related companies, who had obtained and were offering for sale
or "hire", numerous domain names containing well known marks.
In this group of cases, the Court enjoined "the threat of passing
of" (a threat which would become a reality if an offending domain
name was sold to and used by a stranger to the trademark
owner), issuing a warning to cyber squatters: "Any person who
deliberately registers a domain name on account of its similarity
to the name, brand name or trademark of an unconnected
commercial organization must expect to find himself on the
receiving end of an injunction to restrain the threat of passing
off, and the injunction will be in terms which will make the
domain name commercially useless to the dealer”. 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. Mahindra
& Mahindra Limited (M&M) In M&M’s case, a young student
residing in Andhra Pradesh, registered the domain names,
mahindra.com, mahindra.net and mahindra.org, in his name.
M&M appealed to the WIPO stating that the name Mahindra was
a registered trademark in India and the United States. The
panellists ordered that the domain names, be immediately
transferred in favour of the Indian company. Titan Industries
Ltd. Vs. Prashanth Koorapati & Ors The Delhi High Court
granted an ex-parte ad-interim injunction restraining the
defendants for using the name "TANISHQ" on the Internet or
otherwise and from committing any other act as is likely to lead
to passing off of the business and goods of the defendants as the
business and goods of the plaintiff. 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.
Rediff Communications Ltd., v Cyberbooth In Rediff
Communications Ltd., v Cyberbooth, plaintiff, the owner of the
well-known portal and domain name rediff.com filled for
injunction against the defendant, registrant of the domain name
"rediff.com". The judge was satisfied that there was a ‘clear
intention to deceive’ and granted interim relief to the plaintiff.
The judge stated, "A domain name is more than an Internet
address and is entitled to the equal protection of trademark."
Conclusion: As discussed, trademark law has recently
drastically broadened to accommodate domain name disputes.
However, trademark law should not be broadened to give
trademark owners rights that they otherwise are not entitled to.
The question is whether the law will eventually give large
trademark owners property rights in domain names i.e. the
ability to exclude others from using them. In determining
whether the trademark laws should reach so far, perhaps it is
necessary to revisit the purpose of trademark protections.

Trdemarks are protected to provide consumers with accurate

information about the goods and services the mark represents,
and to give companies incentives to invest in their marks and
increase quality control. Trademarks therefore lowers consumer
search costs and promote the economic functioning of the
market. Marks themselves are not protected, but the law
protects the goodwill the marks embody.

Allowing monoploy rights in domain names will discourage

companies from using names that are already taken. Tarditional
economic justification for trademark law rest on the premise that
there is an infinite number of marks available. However, there
are only a limited number of domain names available. Recent
estimates indicate 97% of the names in Webster’s Dictionary
have already been registered as domain names.

Another area of concern with such a right is that it would allow

trademark owners to prclude others from using not only one but
several marks. It is becoming common practice for companies to
register all domain names they can think of that contain their
company name.

For example- Exxon currently holds the rights over more than
120 domain names incorporating the word ‘EXXON’. The present
law seems to promote protection of large companies more who
want rights in every possible variations of their name. From a
realistic point of view, the current expansion in law gives
trademark owners a significant amount of leverage. For example,
many times people with legitimate interests in their domain
names cannot afford to flight trademark owners. Naturally, this
will force many to simply turn over their rights in order to avoid
‘corporate bullying’.

BIBLIOGRAPHY: • ‘Law relating to patent, trademark,

copyright, design and geographical indications’- B. L. Wadehra,
Universal Law Publishing Co. Pvt. Ltd. • ‘Intellectual Property Law
in India’- P.S. Narayan, Gogia Law Agency, Hyderabad. • ‘Law of
Intellectual Property’- S.R. Myneni, Asia Law House,
Hyderabad. • ‘Protecting Intellectual Property in the Internet
Age’- Karnika Seth (Cyber Lawyer), Seth Associates. •
‘Regulating Intellectual Property Rights on the Internet’- Aashit
Shah, Government Law College Law Review, 1999-2000. •
‘Reinventing a sensible view of trademark law in the information
age’- Melinda S. Giftos. • ‘Cybersquatting is a big business in
India’- www.indiaforensic.com • www.iprsonline.org •
www.wikipedia.com