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Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.
Full case name	Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.
Decided	May 6 2004
Citation	2004(3)AWC 2366 SC
Holding
An action for passing off stipulated under the Trade Marks Act, 1999, applies to domain name disputes.
Laws applied
Law of passing off under Trade Marks Act, 1999

Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.

Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd. was the first case to be decided by the Supreme Court of India on the issue of protection of domain names. The court, in the case, pronounced that the Indian Trade Marks Act, 1999, is applicable to the regulation of domain names, similar to trade mark disputes. The court reached this conclusion based on the premise that domain names may have all the features of trade marks. The court considered the confusion that may result in the market due to the use of identical or similar domain names. It stated that in such a situation consumers from the prior domain name would be diverted to the subsequent user of the similar or identical domain name. However, not finding the goods/services associated with the prior domain name, the consumers might be led to believe that the prior domain name user had misrepresented it's goods/services to the consumers, which would consequently result in a loss of consumers and goodwill of the business house utilizing the prior domain name.

Facts

The appellant, i.e., Satyam Infoway Ltd., alleged that the respondent, i.e., Sifynet Solutions Pvt. Ltd., had intentionally registered and begun operating a domain name for its business, which was confusingly similar to that owned by the appellant. The appellant claimed that it had in 1999, registered several domain names pertaining to it's business: sifynet.com, sifymall.com, sifyrealestate.com, with the international registrars- the Internet Corporation for Assigned Names and Numbers (ICANN), and the World Intellectual Property Organization (WIPO). It submitted that the word 'Sify' which constituted an amalgam of elements of its corporate name "Satyam Infoway", was a fanciful term, and had further garnered substantial goodwill in the market. The respondent meanwhile, started using the word "Siffy" as part of the domain name under which it carried on internet marketing, and claimed to have gotten it registered with ICANN in 2001: siffynet.com, and siffynet.net .

Contention of Appellant

The appellant alleged that the respondent was attempting to pass off its services as those belonging to the appellant, by using a deceptively similar word as part of its domain name. The appellant claimed that this would cause confusion in the minds of the relevant consumers, who would mistake the services of the respondent to belong to the appellant.

Contention of Respondent

The respondent contended that unlike a trade mark, the registration of a domain name does not confer an intellectual property right in the name. It averred that a domain name is merely an address on the computer, which allows communications from the consumers to reach the owner of the business, and confers no comparable property rights in the same.

Background

Previous History

Due to a lacuna in the intellectual property laws of India, there was no law which specifically addressed disputes relating to domain names. Therefore, the internet community in innumerable cases asked the courts to apply the law relating to trade marks as an effective redress for their disputes. The High Court accordingly responded and itself held the belief that domain names would be adequately protected under the law of passing off delineated in the Indian law of trade marks. Some notable decisions in which the law of passing of under the Trade Marks Act, 1999, was applied to resolve domain name disputes were Rediff Communication Ltd. v. Cyberbooth & Anr. (AIR 2000 Bombay 27), Yahoo Inc. v. Akash Arora [1999 PTC (19) 201], Acqua Minerals Ltd. v. Pramod Borse & Anr. [2001 PTC 619 (Del)], Dr. Reddy's Laboratories Ltd. v. Manu Kosuri [2001 PTC 859 (Del)]. The Supreme Court in Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd., affirmed the law laid down by these various High Courts, and established a modicum of certainty with regard to the law in this contentious sphere.

City Civil Court

The appellant filed a suit in the City Civil Court, Bangalore, and it also further filed an application for a temporary injunction. The court ruled in favour of the appellant and granted the temporary injunction. It stated that the appellant was the prior user of the word "Sify", and that it had garnered immense popularity in respect of the sale of internet and computer services sold under the same. It further found that the respondent's domain name was confusingly similar to that of the appellant's, and would consequently create confusion in the minds of the public with respect to the source of the services.

High Court

The respondent subsequently preferred an appeal before the Karnataka High Court, which allowed the same. The High Court stated that its decision was based on a consideration of where the balance of convenience lay. The High Court stated that the respondent had already invested heavily in securing a customer base for the business (about 50,000 members), and would consequently suffer immense hardship and irreparable injury if the court found in the appellant's favour. It noted that the business that the two parties were involved in were disparate, and therefore there was no possibility of the customers being misled by similar domain names.Further, since the appellant had a separate trade name, Satyam Infoways, the High Court believed that considerable hardship would not be caused to the appellant by a denial of the order of temporary injunction.

Holding of the Supreme Court

The Supreme Court set aside the decision of the High Court, and ruled in favour of the appellant. It declared that domain names are subject to the regulatory framework that is applied to trade marks, i.e., the Trade Marks Act, 1999. The court stated that though there is no law in India which explicitly governs the regime of domain names, it does not however foreclose protection for domain names under the aegis of the Trade Marks Act. Thus, the court enunciated that domain names are to be protected under the law relating to passing off as delineated in the Trade Marks Act.

Analysis by the Supreme Court

In order to arrive at the Holding, the Supreme Court analogized domain names to trade marks. The court stated that a domain name in the contemporary era has evolved from a mere business address to a business identifier. Therefore, a domain name is not merely a portal for internet navigation, but also an instrument which distinguishes and identifies the goods or services of the business, while simultaneously providing the specific internet location. This feature of domain names in the modern era allows them to be likened to trade marks, and concomitantly to be included within the purview of the Trade Marks Act.

Passing Off

The court delineated the elements of an action for passing off that the appellant would have to prove in order to succeed. Firstly, the appellant had to prove accumulated goodwill in the name "Sify", such that it would be apparent that the consumers associate the name "Sify" with the services offered by the appellant.The appellant discharged this burden by demonstrating that the name "Sify" had acquired immense repute in the market for the services offered by the appellant. The appellant established that it had 840 cyber cafes, 5 lac subscribers, and 54 units of presence all over India. Moreover, it adduced evidence to indicate that it was the first Indian internet company to be listed on the NASDAQ in 1999, and that it had expended an enormous amount of money towards the same. It further presented several newspaper articles which had specifically referred to the appellant company as "Sify", and further various advertisements developed to promote the appellant's services which had also prominently referred to the appellant as "Sify".

Secondly, the appellant had to establish that the respondent had misrepresented it's services to the consumers, such that a likelihood of confusion was created in the minds of the consuming public that the services offered by the respondent belong to the appellant.

Thirdly, the appellant was required to prove that a likelihood of confusion in the minds of the consumers would inevitably result due to the use of a similar domain name by the respondent, and further that such confusion would cause injury to the public and certain loss to the appellant. The standard applied by the court to assess likelihood of confusion is that of an unwary consumer of average intelligence and imperfect recollection. The court opined that in the field of internet services, the difference in the nature of services offered by businesses may not be of much consequence due to the method of operation on the internet. The court expatiated on this facet and explained that the accessibility of domain names to a wide spectrum of users underscores the point that similarity in domain names would lead to confusion and also receipt of unsought for services.

Distinction between Trade Mark and Domain Name

The court proceeded to distinguish between the nature of a trade mark, and a domain name. It stated that the distinction is important to determine the scope of protection available to the right of an owner of either of the two. The court indicated that they can be distinguished primarily on the basis of the method of operation. While, a trade mark upon registration in a particular country acquires rights which are purely national in character, the operation of a domain name cannot be contained within a specific country. Thus, due to this facet of domain names, the court opined, it would be difficult to protect them effectively under national laws. In this regard, the court expressed that the International Registrars, i.e., WIPO, and ICANN, had provided a modicum of protection to domain names.

Subsequent Developments

While the decision was appreciated for the finality it introduced in respect of the law regulating domain name disputes, it was also criticized by some in the legal circles for failing to notice the significant distinctions between trade marks and domain names. The decision has also been criticized because it is believed that the Trade Marks legislation is not equipped to deal with the myriad disputes that arise in the domain name realm. Further, it was also believed that even the Information Technology Act, 2000, also fails to fill in the lacunae in the Trade Marks Act with respect to domain names.

In late 2004, the Indian legislature introduced a significant change in the administration of the .INRegistry. The INRegistry is now the official .IN Registry.'.in' is India's top-level domain on the internet. The INRegistry is operated under the aegis of the National Internet Exchange of India (NIXI). The Registry has issued the .IN Dispute Resolution Policy (INDRP), pertaining to resolution of domain name disputes between the registrants of NIXI.

See Also

• Sify

References

Category:Indian Law Category:Supreme Court of India