Delhi High Court | Suit No. 159 of 1999 Decided on 9 March 2001 Judge: Justice Mukul Mudgal Citation: 2001 PTC 432 (Del) | 90 (2001) DLT 659 | 2001 (58) DRJ 306
Background
Tata Sons Limited is one of the oldest and largest business conglomerates in India. The company has been the registered proprietor of the trademark “TATA” since 1917 in relation to various goods across multiple classes. The trademark was also registered in nine other countries apart from India. The name TATA had over decades built enormous goodwill and reputation not just within India but internationally as well through various Tata group businesses operating across diverse sectors.
Defendant No. 1 Manu Kosuri was the Managing Director of Defendant No. 2 M/s Ramadasoft which was a company engaged in the business of registering domain names in India. Defendant No. 3 was Network Solutions Inc. which was the domain name registrar through whom the domain names had been registered. Network Solutions Inc. was subsequently deleted from the array of defendants by an order of the court dated 30 April 1999.
The suit arose because Manu Kosuri and Ramadasoft had registered a series of domain names all of which incorporated the well known trademark “TATA” without any authorization or permission from Tata Sons Limited whatsoever. The domain names registered by the defendants were jrdtata.com, ratantata.com, tatahoneywell.com, tatayodogawa.com, tatateleservices.com, tatassl.com, tatapowerco.com, tatahydro.com, tatawestide.com and tatatimken.com. It is worth noting that some of these domain names such as jrdtata.com and ratantata.com also incorporated the personal names of the former Chairman of the Tata group J.R.D. Tata and the then Chairman Ratan Tata alongside the trademark TATA. Others such as tatahoneywell.com and tatatimken.com incorporated the names of actual Tata joint venture companies.
The defendants were duly served with summons but chose not to enter appearance before the court. By an order dated 23 August 1999 the defendants were accordingly proceeded against ex parte. The plaintiff then filed evidence by way of affidavits of Mr Anil Bhasin and Mr R.R. Shastri to prove its case on record.
Tata Sons filed the suit seeking a decree of permanent injunction restraining the defendants from passing off the plaintiff’s trademark diluting it and also for rendition of accounts damages and delivery up.
Issue for Determination
The primary question before the court was whether the registration by the defendants of multiple domain names incorporating the plaintiff’s well known trademark “TATA” amounted to passing off and dilution of the plaintiff’s trademark and whether the plaintiff was entitled to a decree of permanent injunction restraining such use.
Connected to this was the broader legal question of whether trademark law and the law of passing off applied to domain names registered and used on the Internet and whether a domain name could be treated as equivalent to a trademark for the purposes of legal protection.
Statutory Provisions Involved
Sections 27 and 29 of the Trade and Merchandise Marks Act 1958 were examined by the court. Section 27(2) of the Act gives statutory recognition to the common law action of passing off. Section 29 deals with infringement of registered trademarks. The court analyzed these provisions and held that a passing off action can be maintained in respect of services rendered on the Internet in the same way as it can be maintained in relation to goods in the physical world. The court noted that the common law tort of passing off which these provisions recognize is not confined to goods alone and extends to services as well.
Key Holdings of the Court
The court decreed the suit entirely in favour of Tata Sons and passed a permanent injunction against the defendants. The key holdings of the court were as follows.
First it is now settled law that with the advent of modern technology and cyberspace domain names and Internet sites are entitled to protection as trademarks because they are more than a mere address. A domain name is a valuable corporate asset. It identifies the Internet site to those who reach it in much the same way that a company’s name identifies the company itself. It is not simply a technical address or a locating number on the Internet.
Second trademark law applies with equal force to activities on the Internet as it does in the physical world. The protection available to trademarks in commerce applies equally to domain names and Internet services.
Third the passing off action under common law as recognized by Sections 27(2) and 29 of the Trade and Merchandise Marks Act 1958 can be maintained in respect of services rendered on the Internet and is not confined only to goods.
Fourth where a defendant registers a domain name that incorporates a well known trademark without the authorization of the trademark owner such registration amounts to an instrument of fraud and courts have jurisdiction to grant injunctive relief. A name which by reason of its similarity to another’s trademark inherently leads to passing off is itself such an instrument.
Fifth courts must take a strict view of such copying because the potential for harm is far greater in the online environment than in the physical world given the easy access and reach of the Internet from every corner of the globe.
The court passed a decree of permanent injunction restraining the defendants their principal officers servants representatives and agents from using the trademark “TATA” in any manner whatsoever and from operating any business or dealing in any goods or services under any domain names containing the word “TATA” or any mark identical with or deceptively similar to the plaintiff’s trademark “TATA” on the Internet or otherwise. The defendants were also restrained from causing any dilution of the trademark “TATA.” There was no order as to costs.
Reasoning of the Court
The court’s reasoning rested heavily on three precedents which it applied to the facts before it.
From Yahoo Inc. v. Akash Arora 1999 PTC 201 the court drew the principle that many Internet users are not sophisticated enough to distinguish between domain names that are similar to each other and that given the vast reach of the Internet courts must take a strict view of copying.
From British Telecom Plc. v. One in a Million 1999 FSR 1 the court drew the principle that registering domain names that incorporate the trademarks of well known third parties without authorization equips the registrant with an instrument of fraud. The mere registration of such a domain name was itself a wrong giving rise to the right to seek injunctive relief regardless of whether the defendant had actually started using the domain name for active services.
From Rediff Communications Ltd. v. Cyberbooth AIR 2000 Bombay 27 the court drew the principle that a domain name is more than an Internet address and is entitled to protection equal to a trademark. Internet services have to be recognised and protected from passing off in the same manner as goods and services in the physical world.
Applying all three decisions the court found that the defendants had in a systematic and deliberate manner registered a series of domain names all of which incorporated the plaintiff’s trademark TATA. The defendants had no connection with or authorization from the Tata group. Their only purpose in registering these domain names could have been to appropriate and exploit the enormous goodwill and reputation built by Tata Sons over nearly a century. This was a clear case of cybersquatting and the defendants’ conduct was found to be entirely mala fide.
Doctrinal Significance
This judgment is one of the foundational cases in Indian cyber law and intellectual property law dealing specifically with the phenomenon of cybersquatting.
What makes this case particularly significant compared to Yahoo v. Akash Arora is the scale and deliberateness of the infringement. While Yahoo involved a single deceptively similar domain name this case involved the systematic registration of an entire series of domain names all built around one well known trademark. The court’s willingness to grant a blanket permanent injunction covering all domain names containing the word “TATA” established that courts in India would take a comprehensive view of such systematic misappropriation and would not confine relief only to the specific domain names pleaded in the suit.
The case also firmly established that cybersquatting which involves registering domain names identical to or incorporating well known trademarks without any legitimate purpose is actionable under Indian law through the common law remedy of passing off even without any specific anti-cybersquatting legislation. This was an important gap that Indian courts filled through judicial interpretation at a time when the Information Technology Act 2000 had just come into force and contained no provisions specifically dealing with domain name disputes.
The judgment is also frequently cited as authority for the proposition that a domain name is a valuable corporate asset deserving the same degree of legal protection as a registered trademark and that the act of registering a domain name incorporating another’s well known trademark without authorization is by itself an instrument of fraud entitling the trademark owner to relief from a court without having to wait for the cybersquatter to actually use the domain name actively.
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