Satyam Infoway Ltd v. Sifynet Solutions (P) Ltd.

Satyam Infoway  Ltd v. Sifynet Solutions (P) Ltd.;

  AIR 2004 SC 3540

FACTS

The Respondent (Sifynet Solutions (P) Ltd.) had registered domain names www.siffynet.com and www.siffynet.net which were similar to the Plaintiff’s domain name www.sifynet.com. Appellant (Satyam Infoway Ltd.) had considerable reputation in the market and had registered the name ‘Sifynet’ and various other names with the Internet Corporation for Assigned Names (ICANN) and WIPO. The word ‘Sify’ was first coined by the plaintiff using elements from its corporate name Satyam Infoway and had a very wide reputation and goodwill in the market. The Appellant was incorporated in the year 1995 and had registered its various domain names using the prefix ‘Sify’ in the year 1999. The Respondent started carrying on its business under the above stated domain names since 5^th June, 2001.

On coming to know of use of the word ‘Siffy’ by the Respondent, 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 appellant’s business name and domain name. An application for temporary injunction was also filed.

The City Civil Court Judge decided in favour of appellants and allowed the application for temporary injunction on the following grounds:

• Appellant was the prior user of the trade name ‘Sify’;
• Appellant had earned good reputation in connection with the internet and computer services under the name ‘Sify’, and
• Respondent’s domain names were similar to the domain name of the appellant and that confusion would have been caused in the mind of the general public by use of such deceptive similarity.

Aggrieved by the decision of the City Civil Court, the Respondent approached, the High Court, which reversed the order of the City Civil Court, on the following grounds:

• The balance of convenience was in favour of the Respondent;
• The business of the Appellant and Respondent was dissimilar;
• The Respondent had invested a large amount in establishing its business and has enrolled 50,000 members,
• The Respondent would be put to greater hardship, inconvenience and irreparable injury.

Hence, the Appellant filed a Special Leave Petition before the Supreme Court.

ISSUES: 

1)    Whether a domain name can be said to be a word or name which is capable of distinguishing the subject of trade or service made available to potential users of the internet.

2)    Whether internet domain names are subject to the legal norms applicable to other intellectual properties such as trademarks.

3)    Would the principles of trademark law and in particular those relating to passing off apply?

HELD

ISSUE NO. 1

Issue No. 1 was answered in the affirmative and to come to the such conclusion, the Hon’ble Supreme Court gave the following reasons:

• With the increase of commercial activity on the internet, a domain name is also used as a business identifier;
• Domain name identifies the specific internet site;
• 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 comfortably co-exist because 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 this value.

ISSUE NO. 2 & 3

Issue No. 2 & 3 were commonly answered in the affirmative as they were interlinked and to come to the said conclusion, the Hon’ble Supreme Court gave the following reasons:

• The use of similar domain name may lead to diversion of users as ordinary customers seeking to locate the functions available under one domain name may be confused with another domain name which may offer dissimilar services. Thus, the customers may conclude misrepresentation, which will result in loss of customers.
• Further, a use of similar domain name has all the ingredients of a passing off action, such as preservation of reputation and goodwill, safeguarding the public, misrepresentation by the defendant, loss or likelihood of loss. Thus, the Hon’ble Supreme Court held that that a domain name may have all the characteristics of a trade mark and one can also file an action for passing for the same.

ON MERITS/FACTS

The matter was ruled in favour of the Appellant, on the following grounds:

• Appellant has lots of reputation and goodwill in the mark ‘Sify’

(Basis: 5 lac subscribers, 840 cyber cafes, 54 points of presence all over India, first Indian Co. To be listed in NASDAQ, extensive coverage in leading national newspapers, sales figures, expenses incurred on advertisement of the mark ‘Sify’, 40 Registered Trade Marks, with the prefix ‘Sify’)

• There is close visual similarity and phonetic similarity between ‘Sify’ and ‘Siffy’ and there is a likelihood of confusion.
• No proper justification by the Respondent, as to its adoption of ‘Siffy’.
• Appellant was a prior adopter and prior user.
• The argument of separate business stood negated on account of exclusivity of domain name symbol which is  accessible to all internet users as well as on account of the fact that there were documents to the effect that the Respondent had advertised to be provider of software solution, software development, Intranet and Extranet solutions, etc.
• The Balance of Convenience was also held to be in favour of the Appellant as it was a prior user and the public associated the mark ‘Sify’ with the Appellant

Author: Ankit Rastogi and Payal Lamba

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