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CASE ANALYSIS- YAHOO INC. VS AKASH ARORA

Introduction

The present case presented an important question of law which pertained to the issue of passing off under Trademark law in India. The matter involved the copying off a well-known mark which was unregistered in India and hence laid down an important precedent for many subsequent cases of passing off.

In the case of Yahoo Inc. vs Akash Arora, the plaintiff Yahoo Inc. was the owner of the trademark Yahoo and the domain Yahoo.com which are both well-known marks and have a distinctive repute throughout the world. They were a registered company since 1995 and had their trademark registered in 69 countries, India not being one of them. The defendant started a company with the domain name of Yahoo India which offered internet services similar to Yahoo Inc. Aggrieved by this, Yahoo Inc. filed a suit seeking permanent injunction to restrain the defendants to continue their business under the impugned domain name of ‘Yahooindia.com’ or any other similar name. An application for an ad interim temporary injunction was also filed under Order 39 Rules 1 and 2 of CPC by the plaintiff to restrain the defendants from using the domain name ‘Yahooindia.com’

Arguments by the Plaintiff

The counsel representing the plaintiff contended that the trademark “Yahoo’ and the domain “yahoo.com” that belonged to the plaintiff were both well-known marks and had gathered ‘distinctive reputation’ and ‘goodwill’ and hence the defendants by using the domain name of ‘Yahooindia’ were passing off their goods and services as that of the plaintiff as the ‘yahooindia’ was a ‘identical and deceptively similar’ to the plaintiff’s trademark. The counsel submitted that a domain name or trademark of the plaintiff was protected equally against a passing off action as it would be in the case of a trademark infringement. By taking a deceptively similar trademark and copying the general overlay of the plaintiff’s domain name, the defendant was trying to pass of his service as that of the plaintiff. To substantiate this, the counsel contended that users were aware that companies adopt the same domain name over the internet as their trademark and have the country’s name in the domain as well and thus while intending to use the services of the plaintiff, the users can easily end up on the domain of the defendant. Lastly, the counsel submitted that the fact that defendants are operating in the same line of service as that of the plaintiff’s shows that adoption of a deceptively similar name was done with dishonest intention.

Arguments By The Defendants

The counsel for the defendants, played down the allegations of the plaintiff and contended that the application of provisions of Trademark Merchandise Act was limited to goods and hence was not applicable in the present case. The counsel stated that the trademark/domain name ‘Yahoo!’ that belonged to the plaintiff was not registered in India and hence no infringement action can be brought by them. Further, it was contended that an action of passing cannot be brought because the services that were provided by the defendant and plaintiff could not be termed as ‘goods’ as under the Indian Trademarks Act. The Counsel also submitted that the impugned word, ‘Yahoo’ was could be found in a dictionary and hence lacked any distinctiveness. The counsel continued that defendant had used a disclaimer and there was no probability of deception which implied that it did not amount to passing off. The Counsel also refuted the plaintiff’s argument by submitting that people who used Internet were literate and ‘technically educated’ and thus no user would reach the defendant’s site when he intended to visit the domain of the plaintiff.

Judgment & Analysis

In the judgment, the Court, having established that domain name of companies was their way of creating their presence on the Internet, noted that Yahoo.com was the domain of the plaintiff which was not registered in India but was popular in India for being one of the first to provide web directory services. The Court then moved on to discuss the first submission of the defendants which was centred on the point that the domain name ‘Yahoo’ of the plaintiff is in context of a service and not goods whereas Section 27(2) and 29 of the Trade and Merchandise Marks Act (Act hereinafter). The Court accepted the defendant’s submission that the present case was not an action for infringement but differed from the counsel’s views that there was no passing off. The Court relied on various judgments and the Commentary of P. Narayan to define the law of passing off as the principle which restricts anyone to use a name which can deceive people into believing that he is related to the business of another person in some way. The principle of passing off has also been recognised in Section 27(2) and Section 106 of the Act. The Court then referred to the cases of Monetary Overseas vs Montari Industries and Neev Investments and Trading Pvt. Ltd. Vs Sasia Express Couriers. In both of these cases, it had been held that services are also a part of the scope of passing off and thus the Court found the defendant’s claim in this regard to be unsubstantiated. Then the Court proceeded to discuss the elements of passing off and whether they were satisfied in the present case or not. Relying on the case of Ellora Industries vs. Banarsi Dass & Ors., the Court found that to prove passing off, the plaintiff needed to show existence their business reputation or goodwill. Further, the Court also relied on the Ellora Industries case and Lord Green M.R.’s observation, to state that the existence of goods was not necessary to show passing off. If both the parties were involved in the same line of business, damage was possible if the impugned trademarks/domain names were deceptively similar.

The Court, further cited Card Service International Inc. vs. McGee in which it was held that the domain name of a company fulfilled the same purpose as a trademark and thus, was entitled to be protected as a trademark. In the same case, it was held that domain name is not just an internet address but also the identification device of the company for its users. In the case of Marks & Spencer vs. One-in-a-Million, it was held that if a name only has value because of its similarity to another trademark or domain name, it will normally be assumed that deception was intended. In light of these cases and opinions, the Court came to the conclusion that even though the word ‘services’ has not been included in the said sections of the Act, it has been recognised to fall under the common law principle of passing off. The Court, after having established that services can be the subject matter of passing off, went on to note that the plaintiff’s domain name ‘Yahoo!’ had gained immense popularity around the world and because the services of the plaintiff were provided over the internet to users who accessed them through the domain name, it was important to protect the domain name from being copied. In the present case, the defendant’s name was almost identical to the plaintiff’s domain name and thus there was immense possibility of confusion and deception of an Internet user. The Court also refused to accept the defendant’s submission that Internet users were sophisticated and hence would not be deceived. The Court said in this regard that even if an individual was educated about the internet, they may be misled because the information provided on the defendant’s site was similar to that provided by the plaintiff.

Moving on the argument of the defendant that they had issued a disclaimer, the Court relied on Jews for Jesus Vs. Brodsky in which it was held that the defendant cannot remedy infringement of the plaintiff’s trademark by using a mere disclaimer. The next submission of the defendant was that there was ‘sufficient added matter’ i.e. the word ‘India’ that distinguished the two domain names. The Court rejected this argument by relying on the case of Ruston and Hornby Ltd. Vs. Zamindara Engineering Co. in which the Supreme Court had held that if two marks were deceptively similar, addition of the word ‘India’ would not amount to significant distinguishing. Further, the Court also noted that the plaintiff was using regional names such as Yahoo. FR (France) and Yahoo.CA (Canada). Thus, the usage of the name “yahooindia” by the defendant is bound to create confusion. Lastly, the Court also refused to accept the defendant’s submission that the word ‘Yahoo’ was a dictionary word and hence commonly used by other companies. The Court reasoned that ‘Yahoo!’ had acquired ‘distinctiveness’ and ‘uniqueness’ and most people associated the word with the plaintiff. In light of these authorities, the Court accepted the prima facie case made by the plaintiff and passed an ad interim injunction against the defendants, restraining them from operating under the name of ‘Yahooindia.com’ or any other deceptively similar name to ‘yahoo!’

Conclusion: Impact Of The Judgment

Thus, in the case of Yahoo! Vs. Akash Arora, the Court held that the principle of passing off under the Trade and Merchandise Marks Act meant that if a defendant was conducting his business under a name that was similar to the ‘well-reputed’ and ‘distinctive’ domain name of plaintiff, and both the parties were in the same line of business, the similarity in two names could mislead the public into believing that the defendant’s good or service belonged to the plaintiff.

The plaintiff, Yahoo Inc had established credibility and goodwill around the name ‘Yahoo!’ and the Court found that the defendant was attempting to misuse this goodwill and pass off his services as that of the plaintiff’s. This case, thus, made the common law principle of passing off applicable in cases of domain names as well and thereby making the judgment an important precedent for other internet-based trademark related cases in India.

Further, the judgment in this case is succinct in stating the law of passing off for infringing trademarks and domain names in cases of services as well. Most importantly, this case highlighted the concept of cyber squatting and laid down the remedies available to plaintiffs in such cases. The case is also considered a landmark judgment as it was the first time a domain name was equated to a trademark and provided equal protection from passing off in India. The court by upholding the aforementioned points established lucidly that domain names, on passing the test of distinctiveness, are entitled to protection from passing off and infringement.


This article has been written by Subodh Singh. Subodh is a fourth year law student at ILS Law College, Pune.