The Delhi High Court granted ex parte permanent injunction against the defendant entities which were misusing Tata’s “Croma” for fraudulent practices.
Facts
Infiniti Retail Limited, a wholly owned subsidiary of Tata Sons, is the registered owner of “Croma”. The retail chain “Croma”, which was launched in 2006, offers a wide range of retail products ranging from electronic products to kitchen appliances. The Trademarks Registry declared “Croma” to be a well-known mark on 24 February 2020. The plaintiff approached the Delhi High Court for injunction against the defendants 1 to 4 – the owners of domain names www.croma-share.com, www.croma-2.com, www.croma-1.com and www.croma-3.com respectively. These four defendants were into the practice of defrauding customers under the pretext of recruitment for part- time jobs.
Judgment
The High Court, vide order dated 5 December 2022, granted temporary injunction against “offering for sale, advertising or in any manner dealing in goods / products under plaintiffs registered marks viz. “CROMA”.
By judgment dated 19 January 2024, the Court granted permanent injunction against the defendants 1 to 4. The Court came to the conclusion that the defendant entities are using the plaintiff’s mark to create a misperception of association with the plaintiff and consequently, defraud the consumers (paragraph 11).
The Court ordered for:
- Permanent blockage of the impugned websites: and
- Suspension and disabling of the UPI IDs.
Comments
I have some policy-based comments here.
The Court ordered for blocking the websites and the UPI ids. But what is the remedy for customers who suffered legal injury? (This was not the issue before the Court. But this is pertinent.)
Those who suffered legal injury should be awarded damages. But who will bear the liability?
To my eyes, domain registrars (such as GoDaddy and Google domains) should incur contributory liability. It is a settled legal position that the trademark protection extends to domain names. If the domain registrar had carried out even a preliminary legal due diligence, it would not have awarded the domain names in the first place. This does not appear to be a case where the domain registrar can take shelter under safe-harbour provisions.
“If the domain registrar had carried out even a preliminary legal due diligence, it would not have awarded the domain names in the first place.”
To place the liability or obligation on a DNR is erroneous, burdensome and illogical. A DNR has no way to know whether the registrant is the rightful TM holder. A few points for the author to consider:
1. The entire piece proceeds on the premise that the registrant has given accurate details during registration. In phishing, spamming, online scams, this is never true. Take a look at ICANN’s WHOIS ACCURACY PROGRAM SPECIFICATION to see the details to be provided by the registrant and to understand how easy it is to fake and how impossible it would be for a DNR to verify (esp given database and privacy restrictions).
2. Even if the data entered is correct:
a. In what database will a DNR check whether the mark belong to a particular entity? There is no central database. Even if there was, the database would not account for (i) common law right holders, or (ii) cases where the ownership is disputed by a third party.
b. A single mark may be registered by different entities in different jurisdictions, since these are governed by national TM laws. How will a DNR know which entity’s rights are superior?
c. At the time the domain name is being registered a DNR has no way of knowing what it will be used for. Should they preclude all domains which use a registered mark? What about parody or fan or review accounts? Domain names like ihatespicyip.com, ilovespicyip.com, ratespicyiposts.com – would those violate TM rights? How would a DNR judge that?
d. Sometimes, third party (e.g. a web developer) can create and hold a domain for a client. Therefore the name of the client and the name of the registrant would be different. How would the DNR verify this?
Thank you for your comment. I will get back to you. By liability, I meant secondary liability for Domain Registrars. May I request for your inputs regarding the following: Would it have been possible for the domain registar to invite the attention of the concerned domain owner (in this case, Croma) before awarding the domain names to the respondents? To cite the example you have given, say, somebody wants the domain name ilovespicyip.com. Will it be possible for the domain registrar to invite the attention of spicyip.com to the application for ilovespicyip.com?
Also, what is your take on Snapdeal Private Limited v. Godaddycom LLC and Ors., CS(COMM) 176/2021, dated April 18, 2022?
“98. In all such cases, however, the DNRs, by the application of the algorithm derived by whom the infringing domain names are becoming available to prospective registrants, would themselves be “infringers”, within the meaning of Section 29 of the Trade Marks Act, and liable in that regard. In order to avoid such liability, in my opinion, the DNRs would either have to modulate their algorithms in such a way as not to make available, to prospective registrants, potentially infringing alternatives – as Defendant 1 has apparently done in respect of its own domain name – or avoid providing alternative domain names altogether. A situation in which the algorithms of the DNRs make available, to prospective registrants, infringing domain names, leaving the proprietors of the infringed trade marks to repeatedly knock at the doors of the Court cannot be allowed to continue in perpetuo.”
Thank you for the preliminary response. A few thoughts:
1. Conduct a search on the Madrid Monitor for Croma. There are 16 TM holders across the world for this mark. Obviously this does not count unregistered users of the mark CROMA. Who would the DNR have reached out to?
2. The Snapdeal order is currently under appeal. And my response to this three-fold –
(a) a DNR is an intermediary and therefore as long as it complies with the IT Act and its rules, it is shielded from liability under S. 79;
(b) with regard to this own DNR holding back its names from being registered – I think that is its choice as a service provider (akin to a restaurant reserving the right of entry to customers); also other DNRs do allow for registration of a domain name which incorporates this mark. You cannot compel a business to provide services it does not wish to;
(c) This sentence “A situation in which the algorithms of the DNRs make available, to prospective registrants, infringing domain names, leaving the proprietors of the infringed trade marks to repeatedly knock at the doors of the Court cannot be allowed to continue in perpetuo” – presumes that the DNR is aware that domains that it is offering for registration are infringing. It is not, and has no way to know.
Thank you for your response. Please find below my thoughts:
1. In the age of machine learning and generative AI, I do believe that DNRs can run a check before awarding domain names. It can even have a database of all the well-known marks of all or major jurisdictions. In the instance you have mentioned concerning 16 TM holders for “Croma”, the DNR can just ‘inform’ other domain name holders who carry “Croma” in their domain names. Let these domain name holders decide on the next course of action.
I am against the idea of absolute impunity for DNRs. They cannot be passive while enjoying the fruits of registrations. In other words, they cannot be ‘willfully blind’. They should do what they can reasonably do within their limits to avoid contributory liability.
2. The following cases indicate other courts’ reluctance to grant absolute impunity to domain name registrars (subject to certain conditions):
Tribunal de Grande Instance, Paris, April 10, 2006, Sté Rue du Commerce v. StéBrainfire Group et Sté Moniker Online Service Inc
Solid Host, NL v. Namecheap, Inc., 652 F. Supp. 2d 1092, 1105 (C.D. Cal. 2009)
Dear all,
I am copy-pasting the comment of Prof. Dr. Dev Ganjee (Oxford). He disagrees with me.
“Hi Mathews
While I can see your point, I’m not sure I can agree with it: ‘To my eyes, domain registrars (such as GoDaddy and Google domains) should incur contributory liability. It is a settled legal position that the trademark protection extends to domain names. If the domain registrar had carried out even a preliminary legal due diligence, it would not have awarded the domain names in the first place. This does not appear to be a case where the domain registrar can take shelter under safe-harbour provisions.’
What should a registrar do with something like ‘Nike’ which is also the Greek goddess of victory?
Most trade marked words also have other meanings; there can’t be a presumption that applying for anything as a DN that is also a trade mark is bad faith (your approach would take us in that direction).
There are plenty of intermediate options like sunrise periods where brand owners can register their marks before anyone else and rapid response dispute mechanisms.
For contributory liability you would have to base it on the domain name registrar having some obligation to conduct due diligence checks. What is the basis for that obligation if its not clear in so many cases whether the applicant is using the domain name descriptively, for a fan site, for a legitimate complaint/criticism site? A lot has been written on this.”