Case: M/S. Satyam Infoway Ltd Vs. M/S. Siffynet Solutions Pvt. Ltd

The appellant which was incorporated in 1995 registered in 1995 registered several domain names like www.sifynet, www.sifymall.com, www.sifyrealestate.com. in June 1999 with the internationally recognised Registrars, viz the Internet Corporation for Assigned Names and Numbers (ICANN) and the World Intellectual Property Organization (WIPO). The word Sify is a copied word which the appellant claims to have invented by using elements of its corporate name, Satyam Infoway. The appellant claims a wide reputation and goodwill in the name Sify.3. The respondent started carrying on business of internet marketing under the domain names, www.siffynet.net and www.siffynet.com from 5th June 2001. The respondent claims to have obtained registration of its two domain names with ICANN on 5th June, 2001 and 16th March, 2002 respectively.4. Coming to know of the use of the word Siffy as part of the respondents corporate and domain name, the appellant served notice on the respondent to cease and desist from either carrying on business in the name of Siffynet Solutions (P) Ltd. or Siffynet Corporation and to transfer the domain names to the appellant. The respondent refused. The appellant filed a suit in the City Civil Court against the respondent on the basis that the respondent was passing off its business and services by using the appellants business name and domain name. An application for temporary injunction was also filed. The City Civil Court Judge allowed the application for temporary injunction on the grounds that the appellant was the prior user of the trade name Sify, that it had earned good reputation in connection with the internet and computer services under the name Sify, that the respondents domain names were similar to the domain name of the appellant and that confusion would be caused in the mind of the general public by such deceptive similarlity. It was also found that the balance of convenience was in favour of granting an injunction in favour of the appellant.5. The respondent preferred an appeal before the High Court. An interim stay of the City Civil Judges judgment was granted. The appeal was ultimately allowed by the High Court. This order is the subject matter of challenge in this appeal.

Court's reasoning:
In allowing the appeal, the High Court was of the view that merely because the appellant had started the business first, no order could have been granted in its favour without considering where the balance of convenience lay. It was held that the finding that the appellant had earned a reputation and goodwill in respect of the domain name Sify was not based on a consideration of the necessary factors. On the other hand, the documents on record showed that the respondent was doing business other than that done by the appellant and since there was no similarity between the two businesses, there was no question of customers being misled or misguided or getting confused.From the narration of these facts, it is clear that both the Courts below had proceeded on the basis that the principles relating to passing off actions in connection with trademarks are applicable to domain names. However, the respondent has contended that a Domain Name could not be confused with property names such as Trade Marks. According to the respondent, a domain name is merely an address on the internet. It was also submitted that registration of a domain name with ICANN did not confer any intellectual property right; that it is a contract with a registration authority allowing communication to reach the owners computer via Internet links channelled through the registration authoritys server and that it is akin to registration of a company name which is a unique identifier of a company but of itself confers no intellectual propertythe commercial field, each domain name owner provides information/ services which are associated with such domain name. Thus a domain name may pertain to provision of services within the meaning of Section 2(z). A domain name is easy to remember and use, and is chosen as an instrument of commercial enterprise not only because it facilitates the ability of consumers to navigate the Internet to find websites they are looking for, but also at the same time, serves to identify and distinguish the business itself, or its goods or services, and to specify its corresponding online Interneta domain name as an address must, of necessity, be peculiar and unique and where a domain name is used in connection with a business, the value of maintaining an exclusive identity becomes critical. "As more and more commercial enterprises trade or advertise their presence on the web, domain names have become more and more valuable and the potential for dispute is high. Whereas a large number of trademarks containing the same name can comfortablybecause they are associated with different products, belong to business in different jurisdictions etc, the distinctive nature of the domain name providing global exclusivity is much sought after. The fact that many consumers searching for a particular site are likely, in the first place, to try and guess its domain name has further enhanced thisThe second element that must be established by a plaintiff in a passing off action is misrepresentation by the defendant to the public. The word misrepresentation does not mean that the plaintiff has to prove any malafide intention on the part of the defendant. Of Course, if thein intentional, it might lead to an inference that the reputation of the plaintiff is such that it is worth the defendants while to cash in on it.The third element of a passing off action is loss or the likelihood of it.16. The use of the same or similar domain name may lead to a diversion of users which could result from such users mistakenly accessing one domain name instead of another. This may occur inwith its rapid progress and instant (and theoretically limitless) accessibility to users and potential customers and particularly so in areas of specific overlap. Ordinary consumers/ users seeking to locate the functions available under one domain name may be confused if they accidentally arrived at a different but similar web site which offers no such services. Such users could well conclude that the first domain name owner hadits goods or services through its promotional activities and the first domain owner would thereby lose their custom. It is apparent therefore that a domain name may have all the characteristics of a trademark and could found an action for passing off.As far as India is concerned, there is no legislation which explicitly refers to dispute resolution in connection with domain names. But although the operation of the Trade Marks Act, 1999 itself is not extra territorial and may not allow for adequate protection of domain names, this does not mean that domain names are not to be legally protected to the extent possible under the laws relating to passing off.26. This brings us to the merits of the dispute between the parties. As we have already said, a passing off action is based on the goodwill that a trader has in his name unlike an action for infringement of a trademark where a traders right is based on property in the name as such. Therefore, unless goodwill can be established by the appellant by showing that the public associates the name Sify with the services provided by the appellant, it cannotappellant has brought on record the stringent conditions and deposit of a large fee for having a trade name included in the NASDAQ International market. The appellant has complied with the conditions for listing. The appellants have claimed that its shares are since 1999 actively traded in on a daily basis on the NASDAQ. It is also claimed that the appellant has widely used the word Sify as a trade name/domain name for its software business and services. The appellants website www.sify.com is claimed to be a comprehensive internet site with a gamut of subjects to choose from. It has brought out brochures and issued advertisements offering services in the internet under the name Sify. It has submitted its sale figures and expenses incurred on advertisement and market promotion of its business under the tradename Sify. It is also claimed that apart from the fact that the appellant is popularly known as Sify, it has also applied for registration of more than 40 trademarks with the prefix Sify under the Trade and Merchandise Marks Act.Apart from the close visual similarly between Sify and Siffy, there is phonetic similarity between the two names. The addition of net to Siffy does not detract from thisWhat is also important is that the respondent admittedly adopted the mark after the appellant. The appellant is the prior user and has the right to debar the respondent from eating into the goodwill it may have built up in connection with thea deceptively similar domain name may not only lead to a confusion of the source but the receipt of unsought for services. Besides the appellants have brought on record printouts of the respondents website in which they have advertised themselves as providing inter alia software solution, integrating and management solutions and software development covering the same field as the appellant. To take a specific example, the respondents brochure explicitly offers Intranet and Extranet solutions which are also explicitly offered by the appellant. There is clearly an overlap of identical or similar services. It may be difficult for the appellant to prove actual loss Having regard to the nature of the service and the means of access but the possibility of loss in the form of diverted customers is more than reasonablyfrom being the prior user, the appellant has adduced sufficient evidence to show that the public associates the trade name SIFY with the appellant. The respondent on the other hand has produced little proof to establish the averments in support of its case that it had a membership of 50,000. We are unable to hold, while not commenting on the authenticity of the bills relied on by the respondents, as the High Court has done, that the bills by themselves show that the respondent has been carrying on conferences at different places and enrolling members who would be transacting with them in the business and like that they have enrolled about 50,000 members already. Similarly, several Bills raised in the name of the respondent in respect of different items do not by themselves establish that the members of the public have come to associate the word Siffy only with the respondent. Weighed in the balance of comparative hardship, it is difficult to hold that the respondent would suffer any such loss as the appellant would unless an injunction is granted. The respondent can carry on its business and inform its members of the change of name. We are conscious of the fact that the grant of an interlocutory order may disrupt the respondents business. But the cannot be seen as an argument which should deter us from granting relief to the appellant to which we are otherwise satisfied it is entitled.35. The High Courts finding that no prejudice would be caused to the appellant because it had another domain name was a consideration which might have been relevant if there was a case of bonafide concurrent use and where the right to use wasThe doubtful explanation given by the respondent for the choice of the word Siffy coupled with the reputation of the appellant can rationally lead us to the conclusion that the respondent was seeking to cash in on the appellants reputation as a provider of service on the internet. In view of our findings albeit prima facie on the dishonest adoption of the appellants trade name by the respondent, the investments made by the appellant in connection with the trade name, and the public association of the trade name Sify with the appellant, the appellant is entitled to the relief it claims. A different conclusion may be arrived at if evidence to the contrary is adduced at the trial. But at this stage and on the material before the Court, we are of the view that the conclusion of the High Court to the contrary was unwarranted.