Case Comment: Yahoo! Inc v. Akash Arora & Anr

By Harish Khan 17 Minutes Read

Citation: 1999 IIAD Delhi 229, 78 (1999) DLT 285

Judicial Forum: Delhi High Court

Date of Judgement: 19 February 1999

Bench: Justice M Sharma

Sections Referred: Sections 2(5), 27, 27(2), 29, 30, 106 of the Trade Merchandise Mark Act, 1958

Introduction

Yahoo! Inc vs Akash Arora & Anr was the first case regarding “cybersquatting” in India. The term cybersquatting refers to the unauthorized registration and use of Internet domain names that are identical or similar to trademarks, service marks, company names, or personal names. Cybersquatting registrants obtain and use the domain name with the bad faith, mainly with the intent to profit from the goodwill of the actual trademark owner. Both the federal government and the Internet Corporation for Assigned Names and Numbers have taken action to protect the owners of trademarks and businesses against cybersquatting abuses.

In this case, action of “Passing off” was taken by the Plaintiff against the actions of the Defendants as the trademark was not registered otherwise, the Plaintiff had filed a civil suit instead of taking the action of Passing off if the Trademark was registered.

Passing off means, “If a person sells his goods as the goods of another” then the trademark owner can take action as this becomes a case of passing off. Passing off is used to protect or safeguard the goodwill attached to an unregistered trademark. When the trademark has been registered by the owner and infringement happens, then it becomes a suit for infringement, but if the trademark has not been registered by the owner and infringement happens then it becomes a case of passing off.

The three elements of Passing off are:

1. The Plaintiff must prove that there is a misrepresentation in a way, where the defendant takes or tries to make the public believe that the goods and services which he is providing are of the plaintiff.
2. Secondly, it must be proved that the person or the goods and services own some kind of reputation in the mark which associates the public with that specific goods or services.
3. At last, to succeed in taking action to stop the infringing party, the offended party must prove that it has suffered an actual or reasonable loss of business due to the alleged misrepresentation.

Background

The plaintiff Yahoo INC. was the owner of the trademark ‘Yahoo’ and the domain name ‘yahoo.com’, and both of these were famous marks that had a distinct identity and reputation in the eyes of the global public. Additionally, Yahoo was also a registered company since 1995 and possessed a registered trademark in 69 countries except for India.

The defendant, Akash Arora, started a company with the domain name ‘Yahoo India’, with a similar purpose of providing internet services as Yahoo INC.

Plaintiff instituted a suit against the defendants seeking for a decree of permanent injunction restraining the defendants, their partners, servants and agents from operating any business and/or selling, offering for sale, advertising and in any manner dealing in any services or goods on the Internet or otherwise under the trademark/domain name ‘Yahooindia.Com’ or any other mark/domain name which is identical with or deceptively similar to the plaintiff’s trademark ‘Yahoo!’ and also for rendition of accounts and damages.

Plaintiff contended that that the plaintiff is the owner of the trademark ‘Yahoo!’ and domain name ‘Yahoo.Com’, which are both very well-known and have acquired distinctive reputation and goodwill and the defendants by adopting the name ‘Yahooindia’ for similar services have been passing off the services and goods of the defendants as that of the plaintiff’s trademark ‘Yahoo!’ which is identical to or deceptively similar to the plaintiff’s trademark. It was submitted that a domain name/trademark adopted by the plaintiff is entitled to equal protection against passing off as in the case of a trademark.

However, the aforesaid allegations were denied by the defendants, the defending counsel submitted that the trademark laws in India relate to goods and, therefore, the provisions of Trade and Merchandise Marks Act, 1958 are not applicable to the facts and circumstances of the present case which deals only with goods.

It was also submitted that the trademark/domain name ‘Yahoo!’ of the plaintiff is not registered in India and, therefore, there cannot be an action for infringement of the registered mark nor could there be any action of passing off as the services rendered both by the plaintiff and the defendants cannot be said to be goods within the meaning of the Trade and Merchandise Marks Act, 1958 which is concerned only with goods and not services and thus the decisions relied upon by the counsel appearing for the plaintiff are not relevant for the purpose of deciding the present case.

He further submitted that the word “Yahoo!” is a general dictionary word and is not invented and, therefore, it could not have acquired any distinctiveness and since the defendants have been using disclaimer, there could be no chance of any deception and thus, no action of passing of is maintainable against the defendants.

He also submitted that the persons using Internet and seeking to reach the Internet site are all technically educated and literate persons and, therefore, there is no possibility of any customer reaching the Internet site of the defendants with the intention of reaching the Internet site of the plaintiff and thus, it is not a case of unwary customer which is applicable in a case of infringement and passing off of the trademark.

Judgment and key takeaways

The Court passed an ad interim injunction order in favour of the plaintiff and against the defendants referring to the case of Monetary Over seas v. Montari Industries Ltd. 1996 PTC 42 where it was said that, “When a defendant does business under a name which is sufficiently close to the name under which the plaintiff is trading and that name 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, or is a branch or department of the plaintiff, the defendant is liable for an action in passing off.” The order restrained the defendants their partners, servants and agents from operating any business or selling, offering for sale, advertising and/or in any manner dealing in service or goods on the Internet or otherwise under the trademark/domain name ‘Yahooindia.com’ or any other trademark/domain name which is identical with or deceptively similar to the plaintiff trademark ‘Yahoo!’ till the disposal of the suit. The defendants and all others acting on their behalf were further restrained from using and/or copying the contents of the programmes of the plaintiff under the domain name ‘Yahoo.com’.

Adding on the issue of services rendered by a person being included within the scope of passing off, the court made reference to the decision in Ellora Industries Vs. Banarsi Dass & Ors. 1981 PTC 46 and quoted Lord Halsbury’s definition of Passing off which was stated in Reddaway Vs. Bentham 1696 A.C. 199.

The Court referred to the case mentioned by the plaintiff’s counsel, Marks & Spencer Vs. One-in-a-Million 1998 FSR 265 wherein it was held that any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organisation 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 name commercially useless to the dealer.

The Court in the present case addressing the issue of trademark not being registered in India stated that though the trademark of the plaintiff ‘Yahoo!’ was pending in India, plaintiff is a popular global Internet media rendering services under the domain name/trade name ‘Yahoo!’.

The Court also observed that using a disclaimer by the defendant cannot eliminate the problem. The court backed this by referring to the case of Jews for Jesus Vs. Brodsky 46 USPQ 2d 1652 in which it was held that owing to the nature of Internet use, defendant’s appropriation of plaintiff’s mark as a domain name and home page address cannot adequately be remedied by a disclaimer.

The Court on the contention that the word “yahoo!” is a general dictionary word and lacks distinctiveness, therefore cannot be appropriated as a domain name/trademark, referred to the case of N.R. Dongre Vs. Whirlpool Corp. 1996 PTC 583, wherein the court recognising the uniqueness and distinctiveness of the trade name, held that the reputation of the trademark ‘WHIRLPOOL’ travelled across the borders and though the respondents are not the registered proprietors of the ‘WHIRLPOOL’ in India in respect of washing machines, an action of passing off against the appellants in respect of the use of the same can be maintained.

Comment

As of present, India has enacted the Trademarks Act, 1999, which replaced the previous law known as the Trade and Merchandise Marks Act, 1958. The Trademarks Act, 1999, introduced significant changes and improvements to the trademark registration and protection system in India.

The Trade and Merchandise Marks Act, 1958, primarily dealt with the registration and protection of trademarks related to goods. It did not specifically address service marks. The Trademarks Act, 1999, expanded the scope to include both trademarks related to goods and service marks related to services. This change allowed for the registration and protection of marks used in the service industry.

The 1958 Act used a single-class system, where one application covered only one class of goods or services. This meant that applicants had to file separate applications for each class they wanted protection in. The 1999 Act adopted the multi-class system, allowing applicants to apply for protection in multiple classes of goods or services under a single application. This streamlined the registration process and made it more efficient.

Both Acts define a trademark as a mark capable of being represented graphically and distinguishing the goods or services of one person from those of others. The 1999 Act provided a broader definition of a mark, including marks in various forms such as words, names, symbols, logos, colours, sounds, and even three-dimensional shapes, which are capable of being graphically represented.

Under the 1958 Act, the initial registration term for a trademark was seven years, and it could be renewed indefinitely in seven-year intervals. The 1999 Act increased the initial registration term to ten years, with subsequent renewal periods also set at ten years.

The 1999 Act introduced provisions for the protection of well-known trademarks, even if they were not registered in India. This provision allows owners of well-known trademarks to prevent their unauthorized use in India, even if they have not obtained local registration.

The 1958 Act did not contain specific provisions regarding the assignment and transmission of trademarks. The 1999 Act introduced provisions for the assignment and transmission of registered trademarks.

In short, the Trademarks Act, 1999, modernized the trademark registration and protection system in India, bringing it in line with international standards and providing greater protection to trademark owners. It also addressed some of the limitations and shortcomings of the earlier 1958 Act.

In India, National Centre for Software Technology (NCST) is an organizational body that regulated country-level domain name registration. If a domain name is unique, undisruptive, and available and also not protected as a trademark of another company engaged in similar or different goods and services, then, the applicant can register the domain name as a trademark. The applicant has to pay a fee for trademark registration which is assessed yearly and provide contact information to the approved registrar. The ICANN (Internet Corporation for Assigned Names and Numbers) provides the list of approved registrars.

Once, a domain name is registered as a trademark, then the owner of the domain name has exclusive right over it, but this right cannot prohibit others from using the name for their business.

As of present, the ICANN (Internet Corporation for Assigned Names and Numbers), a regulatory body has set- up the Uniform Dispute Resolution Policy (UDRP) to settle domain name dispute at the global level. However, the main issue that arises during the dispute settlement of Domain name and Trademark Protection is the jurisdictional issue (i.e., whether the decision of Hon’ble Court has binding force over the disputed parties of different countries) because the internet had no geographical boundaries.

In India, the Indian Dispute Resolution Policy (INDRP) deals with disputes regarding the domain name. The rules and procedures of INDRP are approved by NIXI, and the policy mandates arbitration proceeding under the Arbitration and Conciliation Act, 1996 as means for resolution of disputes concerning the domain name registered by NIXI.

Harish Khan

This is Harish Khan, Enrolled as an Advocate with the Bar Council of Delhi. pursued B.B.A. LL.B (Hons) Specialised in Business Laws from Himachal Pradesh National Law University, Shimla [H.P]. completed LL.M Specialised in Business Laws from Amity University, Lucknow [U.P].