Online infringement of Trademarks ~ Free Legal Advisors

Introduction :

Cyberspace is a virtual world, which exists only in computer memory, but it is interactive and pulsing with life. In cyberspace, one can meet and talk to new people, read, publish, research, hear music, see video, look at art, purchase and sell things, access government documents, send emails, download software, and receive technical support. Cyberspace is a living organism, constantly changing, as more information is uploaded, downloaded, as more people join the pioneers of this brave new world. Our laws have yet to catch up with it. This is not necessarily a bad thing; the law tends to lag behind the social changes, and then resolve itself accordingly. While this new frontier will never stop evolving, perhaps it is still too much in its infancy for us to determine how to regulate it. But as it becomes more integrated into (integral to) our daily lives, many are becoming concerned with defining acceptable behavior in this new landscape.[1]

Trademarks have existed as long as the trade itself. Once human economies progressed to the point where a merchant class specialized in making goods for others, the manufacturers and the sellers of the goods began to mark their wares with a word or symbol to identify the maker. Consumers rely most on trademarks when it is difficult to inspect a product quickly and cheaply to determine its quality.[2] Electronic commerce or trading through the internet has become a reality and is here to stay. This means that every future minded business should at least have a makeshift internet access point. Thus it is imperative that a common businessman would be as much apprehensive about the trademark infringement on internet/virtual world as he is outside it[3]. Thus in this era of information technology it becomes pertinent to address this issue of online infringement of trademarks with utmost care and lay out the vulnerable areas where the encroachers can easily spot the loop hole and thereby exploiting it and causing great financial loss to big business houses. This is the main focal point of this paper along with mentioning the possible solutions with respect to the contemporary legal framework.

What is Trade Mark?

Trade mark is defined under section 2(1)(zb) of the Trade marks act, 1999. Basically it means that a mark capable of being represented graphically and which is capable of being distinguishing the goods or services of one person from those of others and may include shape of goods , their packaging and combination of colours. The purpose of the Tm law is not to confer a monopoly on a right to use a specific word or symbol, instead it allows the first user to have some exclusive rights, which in effect exclude some other entities from adopting a similar work.

The impact of trade marks on the internet:

Consumers rely on the strong brand presence and brand performance for the confidence to engage in e-commerce. While trade marks are of great importance in this virtual environment, they are more the less more vulnerable to infringement, dilution and anti-competitive practices. Trademark owners expend vast resources, engaging automated ‘web crawling’ software and cyber surveillance firms to monitor billions of web pages and protect their intellectual property rights.[4]

The traditional method of resolving legal conflict- court litigation- is largely organized on territorial basis. Each country has its own courts, which may be called upon to rule upon disputes falling under their jurisdiction, mostly on the basis of the application of local laws. The territorially based dispute resolution model faces a number of challenges when applied to disputes arising on the internet, where activity occurs with little regard for physical boundaries. Indian courts have been extremely vigilant in protecting the interests of the trademark owners. There are some lessons to be learnt from the Indian experience.[5]

The convergence of the computer networks and telecommunications facilitated by the digital technologies has started a new ‘digital era’. There is hardly any digital activity which has been remained untouched by the digital era through internet. The cyber manthan has bestowed many gifts to humanity but they have come with unexpected pitfalls. The emergence of the internet as a tool of e-communication and e–commerce has resulted in complex intellectual property issues. Each sunrise seems to be bring with it yet another change in the legal landscape of this unchartered multi dimensional world evolving beyond the monitor screen.[6]

The scope of trade marks right with reference to the global effect:

The scope is determined not only by defining when such right is infringed, but also by specifying the remedy available to such right holder when an infringment has taken place. The most pertinent question that stands before us all is : if a trade mark right has been infringed by the use of the sign on the internet, the question arises whether its owners its owner should be able to demand , with the help of the courts, that the defendant cease every use of the sign through the internet?[7]

Such an injunction would have an effect which would be as global as the internet itself. If the traditional trademarks law is to be translated into the cyberspace, a national and thus territorially limited, trade mark right should not give rise to an exclusive right throught the world wide expanse of this medium. It would, therefore, be appropriate if all available remedies were, as far as possible, limited to a territory for which the owner holds the exclusive right. Courts might have to take a creative approach in framing equitable relief, such as obliging the user of the sign on the internet to take reasonable measures for avoiding contracts with the territory in which the trade mark owners holds an exclusive rights.[8] This could be effected, for example by placing adequate statements on the website
( ‘Disclaimers’ as above) , by using the technical mechanisms to block access by the internet users located in a particular territory,. Concurrent users could also be encouraged to share a common gateway.

Trade marks and domain names:

A domain name is part of the address of the location of a site on the internet. For instance harrods.com is the domain name of the London department store, Harrods. While TM have been around for a long time, domain names are comparatively a recent phenomenon attracting public attention only since the rise in popularity of the internet. The legal interface between the domain name and the TM has been the subject of much analysis. When the potential for conflict between the two first arose, there was there was the potential for a wave of cross border litigation as TM owners and the Domain name holders battled for the control of the domain names.[9]

Disputes over ownership of the domain names have arisen for a number of reasons. The domain name has been considered as akin to a trade mark. Therefore those who own the mark for the no-internet business wish to use the same name on the internet; it is seen as a valuable addition to the branding of goods or services or the business as a whole. Trade mark law is territorial whereas internet is global. Therefore, different business trading under the same mark in various parts of the world may have what they consider to be the same legitimate claim to a particular domain name. as no domain name can be identical therefore only one business house can have a particular name.

The registration of a domain name as a trade name:

In UK, the question of whether an internet address which includes ‘www’(as opposed to a domain name) can be registered as a TM has been considered in National Mantgomery securities LLC’s application case[10]where the application by nationsbanc to register http:// www.primebroker.com in connection with goods and services in class 9(computer hardware and software) was refused on the grounds that it was devoid of distinctive character. The appeal was dismissed. It was found that the TM as a whole represented an email address. The element ‘www’ represented the ’world wide web’ and ‘.com’ a top level domain name. the whole sign was likely to be seen as an electronic mail address for a broker engaged in the services set out in the application and not in any way distinctive.

Despite this ruling, domain names have been registered as TMs, albeit with the added material rendering the domain name distinctive.

Why TM needs to be protected?

The reality of the Indian customers is evident in India. They do not trust the neophyte products that are basically advertised on the internet. Thus the protection needs to be accorded to the big brands of the market so that some one does not misuse the goodwill of their name and fame for making undue profits. Brands have proven to be a survival kit on the internet. Yet just a few companies have managed to gain leverage from the value of their brands and taken those benefits on the internet. There is close relationship between intellectual property and the internet, both in terms of the technical infrastructure and the products traded on it. The aspects of the internet infrastructure which could appropriately be subject to exclusive proprietary rights also is subject of constant debate and discussion.[11] in light of these deep ties between the intellectual property and the internet, the question has arisen whether any private international law regime for the internet could be deemed complete if it does not also address intellectual property issues.

Trademarks issues have been addressed under the lanham act’s remedies for traditional infringement. While the lanham act is still used, it applies only in the united states and does not assist in detecting infringement. Thus the companies have developed the software bots( software robots and software agents – to counter practices such as cyber squatting, metatags, etc legitimate trademarks and domain name owners frequently use “ software robots to locate third party unauthorized use of a company’s trademark) to detect infringement and in late 1999, two additional avenues of resolution became available to the domain name registrants : (1) The international uniform dispute resolution policy (UDRP) developed by the internet corporations for assigned names and numbers( ICANN) in October 1999 and the (2) the US anti cyber squatting consumer protection act developed in November 1999.[12]

Online infringement of Trade marks with the tool of cybersquatting, metatags[13],Linking, Spamdixing, Spoofing and others:

Cybersquatting: Some enterprising persons registered the names or the trade marks of the well known companies as domain names, with the sole intention of selling the names back to the companies when they finally woke up. Panasonic, tata, bennet & coleman and avon were among the “victims” of cyber squatting. This practice has reaped rich dividends for some who rushed madly to register TMs or names close to TMs and then demand high price to sell these domain names back to the interested companies. As already mentioned there is no connection between the trade mark registration and domain name registration. This lack of connection has been exploited maximum by the cybersquatters. The first come, first –served, nature of domain name is registered by someone with the sole purpose of selling it at a premium to a trade mark owner.

It occurs when a person hoping to sell the registration to the corresponding TM holder registers domain names holding the resemblance to the famous trade marks. Typically in such cases, persons who have absolutely nothing to do with the name, virtually pirate the name by obtaining a .com registration of a well known company or a brand. Countries like US,UK,india[14], Canada and New Zeland has cases decided upon this.

Metatag is the keyword embedded in a website’s HTML code as a means for internet search engines to categories the contents of the website. Metatags are not visible on the website itself( although they can be made visible together with the source code of this page)#. The more often a word appears in the hidden code, the higher a search engine will rank the site in its search result. In various jurisdictions, trademarks owners have challenged the unauthorized use o their TMs as a metatag.

Metatag are invisible to the internet user and present no legal issues when used properly. Problems may arise, however if someone, uses metatags incorporating the trade marks or trade names of the competitors to lure customers to their sites, or if famous marks or names are gratuitously included in the metatags to attract visitors to sites having nothing to do with those names and marks. [15]

In Niton corp v Radiation Monitoring devices inc[16] lays out how the competitors name can be used in the metatags. In the recent case, the defendant used the plaintiff’s business name. the effect of the same was that when some lay consumer used to search for the plaintiff’s company on the search engine what followed after that is, most of the ‘hits’ which would confuse the web user and creates a dilemma as to the official site of the plaintiff’s company with that of the defandant’s company. Thus the court held that every time the user enters the name of the product of the plaintiff’s company, or the name of the plaintiff’s company or any of the services provided by the plaintiff’s company the user is mislead by the site of the defandant’s company. The court entered the prim nary injunction subject to modifications prohibiting defandants from using deceptive methods to lure customers to its website.

Linking: linking is a process whereby a user connects from one side of the internet to another site by clicking on a designated speace on the initial site( hyperlink) which then connects the user to the other site. It is one of the most useful aspects for the internet users, because it permits users easily to navigate the internet without needing repeatedly to type website adresses or search terms.

Spamdexing: this words comes from a combination of spam and indexing. Here, either the company’s trademark is placed in the text of the web page instead of in the metatag, or placed in white print text so that it is technically part of the web page, but not visible to readers. Either way the option of the spamdexing is to cause search engines to find the web sites based on the popularity of the trade mark and thus give a website a higher “ hit-rate” than it would normally have. This places it on the top of the list in a response to an internet search, and based on its position of likely option drives additional traffic to the sides.[17]

Spoofing : A web user which has an email-id sometimes may discover an unwanted message from some undesirable site for example some pornographic site, such mails are called spams and now a days most of the websites provide for the filters which automatically junk these mails. But sometimes these blocked sites with the help of this method where they use the name of some well established web sites so that these mails can easily pass through the filters. The method is known as spoofing. Here one web site acquires the identity of another web site.

Framing : Another novel issues that has emerged is framing, which allows a web page developer to build a frame or a border of text, or graphics on its own site and pull a webpage from another site into the frame or border, thus allowing it to offer the other site’s context within the frame on the developer’s own site.[18]Framing creates significant legal issues because it enables operators to create a new page that may eliminate content, advertising and even the site identifier from the framed page.[19]

Jurisdiction issue and protection accorded to the TM owners:

With the shrinking of global marketplace and advancement in communication technologies, the biggest issue that has arisen is to determine accurately the appropriate jurisdiction in a particular transaction. The insensitive nature of the internet to local constraints is the basis of all the jurisdictional problems. This issue can be illustrated with the help of the example : take a situation where the same trademark is owned and used by independent companies in the US and each company has a website (‘philips.com and philips.co.uk) which provides information about the company and its product, and which features prominent use of the mark. Moreover, one or both the companies offer goods or services for sale on their respective websites. Obviously both the websites can be accessed by the internet user from anywhere in the world, raising the possibility that someone in UK using the website of the UK company will encounter the website of the US company, and vice-versa. Here the trademark issue arises whether the use of the trade mark by the US company on its US website constitute the infringement of the trademarks of the UK company.[20]

This is one of the most pertinent issue where there is still some space is left for the improvement. When a crime is being committed on the internet than it becomes really tough for the court to determine whether it has jurisdiction or not. In such circumstances what is taken into consideration is that whether the person or the company or any corporate body in question is related in some way or the other to the court. Basically there are two types of jurisdiction involved here, namely, the personal jurisdiction and the specific jurisdiction.

There are three criteria to determine whether the case falls under the personal jurisdiction or not :

(1) residence (2) incorporation (3) ownership of the property in the state.

If the case falls under any of the above heads than the personal jurisdiction can be evoked. The three elements to determine the specific jurisdiction are :

(1) The claim must directly arise out of non resident’s activities in the forum state.

(2) the contacts must represent the “ purposeful availment” of the privilege of conducting activities in the forum state.

(3) The exercise of jurisdiction must be reasonable. Basically most of the cases that have been decided on online infringement of trademarks have been under the personal jurisdiction.

The Paris convention for the protection of the industrial property establishes a norm requiring the protection of trade names in all state party to the convention.[21] These norms were adopted by many nations in the form of the municipal laws in order to implement the recommendations of the Paris convention. Also, world intellectual property organization (WIPO) role in domain name management can not be sidetracked. One of the most crucial steps towards upholding the Protection of IPR by WIPO is publication of the interim report on 23rd December, 1998 whereby it contained interim recommendations regarding formal domain name registration agreement. It defines the rights and responsibilities of the registration authority, on the one hand and the domain name applicant on the other.

Alternate dispute resolution: Effective mode of dispute resolution:-

ADR( alternate dispute resolution) has, however, traditionally played only a modest role in the resolution of the intellectual property disputes. This has to do with the fundamentally territorial nature of intellectual property rights which are in principle, only granted for and protected in individual countries. ADR is however gaining increasing importance in IPR disputes filed with institutional ADR providers such as WIPO arbitration and mediation centre. In addition, courts cannot always respond to the efficiency demands of intellectual property rights owners, who can hardly afford to divert scarce resources in terms of time and money to lengthy litigation.[22]

Since court procedures are generally public, they provide few means of responding to the particularly sensitive confidential information involved in the intellectual property rights matters. And also the disputes are not always readily available within the national court system.

Thus on the brighter side the ADR proceedings allow the parties to avoid all these stumbling blocks. It also takes care of the confidentiality issues of the party and can deal with the multi jurisdictional issues. Though it doesn’t turns out to be fruitful in the cases of the extra- contractual disputes.[23] The UDRP provides a single forum for the resolution of the dispute that would otherwise present difficult issues of international jurisdiction because of the likelihood of the parties based in different jurisdiction and that trademarks protected in several countries are involved. The UDPR also establishes a single set of rules for the administration as well as for the decision on the dispute and does not rely, in principle, on the municipal laws.[24]

The UDRP does not attempt to resolve disputes between the parties that both hold a right or legitimate interest in the domain name. such dispute requires a much more assessment of rights and interest involved and do not lend themselves easily to streamlining and standardizing, especially in the international context. Also contributing to the overall efficiency of the UDPR model is the fact that the remedies are limited to cancellation and transferring of the domain names that are directly enforceable in the domain name system and that panels cannot award monetary damages which would have to be enforced by the public means.

Viewpoint of the court in the cases of online infringement of TM:

Mere registration of the well known TM as domain name could give rise to the liability for the passing off. In appropriate circumstances, registration of the domain name can itself constitute an instrument of deception or fraud, leading to the liability of the passing off. ( British telecommunication. Inc vs. west coast entertainment corp[25].,- the us court of appeals, ninth circuit confirmed that a comparison between the alleged infringing domain name and the registered trademark is relevant. The court emphasized on the eighth factor test used for determining whether confusion exists: the similarity of the marks, the relatedness and proximity of the products or services, the marketing channels, the strength of the claimant’s mark, the defendants’ intention in selecting its mark, evidence of actual confusion, likelihood of expansion into other product lines.)

The use of another’s TM in the domain name is allowed where the domain name itself does not give rise to the confusion. (Howitt Debroh, war.com : why the battles over domain names will never cease? Hastings communication and entertainment law journal.

Due to the peculiar nature of the domain name system identical names cannot exist. In such types of cases both the parties have historical connection to a mark and find themselves confronted with a domain name conflict. Subject to any dilution claim that a senior user may have, it has been the tendency of the courts in such cases to find no likelihood of confusion where both the parties have historical connection to mark and they operate in different industries. (interstellar starship services ltd vs. Epix inc[26].)

In Bawa Masal company vs. Bawa masala company Pvt. Ltd & Anr[27], at the request of the parties the court permitted a novel form of the alternate dispute resolution mechanism known as Early Neutral evaluation(ENE). Though it is not one of the models of the ADR mentioned under section 89 of the CPC, considering the objects of the section, the court permitted ENE and directed that its result-success or failure- should be communicated to the court. It is an technique used in the American litigation to provide early focus to complex commercial litigation, and based on that focus provides sensible case management or offer resolution of the entire case in the early stage.[28]

The above case is evident of the innovative steps that Indian courts are not afraid of taking. Because of the major jurisdictional issue there is an instant need of the dispute resolution policies and if the dispute is of grave nature than only the recourse of the courts can be taken. Due to the lack of the geographical boundaries on the internet there lies disputes and the different mechanism of dispute resolution are under the process of evolution and there is no straight jacket formula to resolve the dispute and it depends on the gravity of the dispute along with another major considerations such as whether the party was ‘in contact’ to the court to the forum or not? What was the nature of infringement? What repercussion the claimant party had to suffer or the possible damages that can accrue because of such infringement? Is there any scope of settlement between the parties as such or not? With the advancement in the field of technology, it seems that our society also needs advancement and innovation in the field of law. America has shown the way for most of the countries by enacting the anti cyber squatting act, 1999 and also the Lehman’s act that is in force since 1947, thus providing comprehensive and total protection to the intellectual property rights owners and thus managing this issue of vast and critical consideration in one of the most lucid ways. India though has passed the It Act, 2000 but certain measures with respect to the protection of trade marks have to be still taken into consideration when in the recent times there have been blatant violation of the trademarks through the online medium have taken place. The Indians are still dependent upon the archaic Indian penal code and still within 10 years of its inception the protective measures granted under the IT act are in question.

Conclusion:

The network of computer networks aptly called the internet, which had a modest beginning, has grown by leaps and bounds. The growth of the internet has been explosive ; the number of internet users has doubled approximately every year since its introduction. Thus it can be inferred that the crime rate is booming with double alacrity. And thus to protect the interest of the thousands of innocent potential victims it is pertinent that protective laws should keep up with the number of crimes. But regrettably it is not even sufficient to curb the half of the cyber crimes. There is appalling need for a Legislations like anti cybersquatting consumer protection act in India. Though the first step with respect to stop the cyber crimes was taken in 2000 but ten years from then the situation has worsened and the cyber thugs are easily able to spot out the loop holes in the neophyte legislation. There are problems relating to the regulation of the domain names, the jurisdiction, express provisions of law to normalize the crime rate on internet. Thus there is need of express provisions in the IT act 2000 with respect to the protection of such intricate cyber crimes that contains provision with respect to the jurisdiction and also the recommendations that were laid down in the WIPO’s interim report in 1998 has to take the shape of the municipal law. A good new beginning has been made with the implementation of the information technology act. This advantage should be consolidated and if we do not act with purpose, all our initial gains would be frittered away. To be succinct there is no time to waste.