Satyam Infoway Ltd. Vs Sifynet Solutions Pvt. Ltd., AIR 2004 SC 3540

Satyam Infoway Ltd. Vs Sifynet Solutions Pvt. Ltd., AIR 2004 SC 3540

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Petitioner: Satyam Infoway Ltd.

Respondent: Siffynet Solutions Pvt. Ltd.

Facts of the case:

Satyam Infoway was Incorporated in 1955 and it registered various domain names using the word ‘Sify’ in the year 1999 including Sifynet.com,Sifymall.com etc. Satyam Infoway had registered the domain names with the Internet Corporation for Assigned Names and Numbers (ICANN)[1]and the World Intellectual Property Organization (WIPO)[2]. The word Sify was a combination of elements of its corporate name ‘Satyam Infoway’ which had very wide goodwill and reputation in the market. On the other hand, Sifynet Solutions (Respondent) started carrying it’s business activities under the same domain name ‘Sify’ like http://www.siffynet.com  and http://www.siffynet since 5 June 2001, which they claimed that they have registered with  ICANN on 5 June 2001 and 16 March 2002 respectively.  Meanwhile, Sifynet Solutions registered its domain name http://www.siffynet.com which was identical to the Plaintiff’s domain name http://www.sifynet.com which had a wide reputation in the market. When the appellant got to know about the use of the same word ‘Siffy’ by the respondent they served a notice to the respondent to either stop carrying their business activities under their name or transfer the domain name to the appellant, but the respondent refused both the options.

Further, a suit was filed by the appellant in the city civil court.

Filing of the case:

Appellant filed a case on the basis that respondent was passing off[3] its business activities and services by using the word ‘Sify’ which was appellant’s business and services domain name which would also create confusion in the minds of the relevant consumers and harm the reputation of Appellant’s business. The appellant also filed an application for a temporary injunction.

Judgment by City Civil Court

The City Civil Court gave the judgment in favour of the Appellant. The City Civil Court gave the judgment on the following grounds:

  • Appellant has been using the word ‘Sify’ prior to the use of the respondent.
  • Appellant had earned a wide and good reputation and Goodwill under the name ‘Sify’ in relation to computer and internet services.
  • The similar use of the domain name by the respondent will create confusion in the mind of the general public.

Also, the application for a temporary injunction was also allowed by the City Civil Court Judge.

The Respondent further filed a case in the High Court and a stay on the City Civil Court judgment was granted. 

The judgment of the High Court

The High Court on its judgment stated that just because the Appellant started their business activities first no order can be granted in the favour of Appellant without considering the balance of convenience.

  • The High Court further stated that both the Appellant and respondent are carrying two different business activities.
  • It was also held that the respondent had invested a large amount of money in establishing the business and had enrolled about 50,000 members
  • The respondent would be put to greater hardship and inconvenience and also an irreparable injury in case the injunction was granted.

The High Court also stated that no hardship would be caused to the appellant if the order of injunction was not granted to Satyam Infoway. The High Court reversed the order of the City Civil Court.

Looking at the decision of both Courts, it can be inferred that both the courts gave decisions on the basis that the principles relating to passing off actions in connection with trademark applicable to domain names. But in the above case respondent holds that a domain name cannot be confused with ‘Property names’ such as trademark. According to the respondent, a domain name is nothing but merely an address on the Internet, the respondent also stated that registration with ICANN did not confer any Intellectual Property Right. 

According to the Trademark Act 1999, Section 2 (1) (zb) ” trademark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colours.”

Trademark is nothing but a logo, symbol, design, phrase, picture or something else which distinguishes one product from another similar kind of product.[3]

A “mark” has been defined in Section 2(m) as including “a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof and a ‘name’ includes any abbreviation of a name[4]

Goods” have been defined in Section 2(j) as meaning “anything” which is the subject of trade or manufacture, and “Services” has been defined in section 2(z).[5]

After analysing the above definitions the appropriate question arises 

  • Whether a domain name can be a word which is capable of differentiating the trade/service which is supplied to the users on the internet. (One of the issues filed in the Supreme Court while the case was further filed in Supreme Court after High Court). On this issue, a special leave petition was filed by the Appellant in the Supreme Court

Issues discussed in the Supreme Court

  • Whether a domain name can be a word which is capable of differentiating the trade/service which is supplied to the users of the internet?

Judgment by Supreme Court

 The Supreme Court answered this issue in the affirmative and came to the conclusion as follow:

The first or foremost role of a domain name was to provide an address for the computers on the internet but the internet has changed since times, from being as a communication means, it has become a more of carrying a commercial activity. With an increase in commercial activities on the internet, a domain name is now also used as an identity of a business. This, now domain name may be considered as services under section 2(z) and the domain name has become an exclusive identity, As the time passes by, more and more activities (commercial) advertise or trade on the web, making the domain name more valuable. A domain name is not only used to facilitate the consumers but it also helps in the identification of the two different business activities. The Supreme Court also stated that the domain name identifies the specific internet site. Also, many times people searching for an internet site guess the domain name of that particular site, this fact has enchanted the value of domain name

Issue 2 :

Whether internet domain names are subject to the same legal norms or laws applied to intellectual property like trademarks?

Issue 3:

Does the principle of trademark law and in particular those relating to passing off apply?[6]

Passing off means when a trader/business person/or some other person makes a false representation to his/her customer or consumer, to make him/her believe that the goods or services he/she is providing are of another person.

In response to issue 2 and 3 courts stated :

If an individual uses the same domain name which another person is using, it may lead to the diversion of users as one consumer may get confused with the other similar name which may offer different services. This may conclude to consumers’ misrepresentation which leads to the loss of consumers.

The Supreme Court also stated that the use of similar domain names has all the similar ingredients which passing off have like protection of Goodwill and reputation of the business, safeguarding the public by not creating confusion in the minds of people, misrepresentation done by the defendant, and lastly the loss. By looking at these factors the Supreme Court held that domain name has the same characteristics as that of trademark and thus, the domain name can be also filed for the action of Passing off.

On the basis of facts and merits, the Court ruled in favour of the Appellant.

Analysis by the Court

The grounds on which basis the Court ruled are as follow:

  • Satyam Infoway has a  lot of reputation and goodwill in the market on the basis of the mark ‘Sify’ having 5 lakh Subscribers, 840 cyber cafes and was also the first Indian company which was listed on NASDAQ, Company’s large coverage by the leading national newspapers, large sales figures of the company, etc. 
  • There is a thin line difference between ‘Sify’ and ‘Siffy’ which leads to the confusion in the minds of people. No proper justification was given by the respondent for using the word ‘Siffy’.

The rejected justification given by Respondent is as follow:

  • Sifynet solution justified the use of the same domain name by stating that the registration of a domain name did not confer any intellectual property right in the name. They further stated that a domain name is nothing but merely an address of the computer and is not intellectual property.
  • Appellant was a prior user and a prior adopter of the domain name.

Sources: 

  • Indian kanoon

https://indiankanoon.org/doc/1630167/

Endnotes

  1. A non-profit organization was responsible for coordinating the maintenance and procedure of several databases related to the namespaces and numerical spaces on the internet.
  2. The organization made to encourage creative activity, to promote the protection of intellectual property around the world.
  3. Trademark Act 1999, No 47 of 1999, 30 December 1999
  4. Trademark Act 1999, No 47 of 1999, 30 December 1999
  5. Trademark Act 1999, No 47 of 1999, 30 December 1999
  6. Satyam Infoway Ltd vs Siffynet Solutions Pvt. Ltd on 6 May 2004 Bench, Ruma Pal, P. Venkatarama Reddi

Case number  Appeal (civil)  3028 of 2004


Aarushi Agarwal - ILS Law College

Arushi Agrawal

Author

Arushi hails from ILS Law College, Pune and she spends most of her time researching on new topics, art and craft, painting. Her Interest area lies in criminal and family law. For any clarifications, feedback, and advice, you can reach her at agrawalarushi463@gmail.com

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