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Manish Vij v/s Indra Chugh

    Interim Application Appeal No. 3064 of 2000, Suit Appeal No. 618 of 2000
    Decided On, 07 December 2001
    At, High Court of Delhi
    For the Appearing Parties:C.M. Lal, Garjatu J., Nil Mason, Pravin Anand, V.P. Singh , Advocates.

Judgment Text

(1) PLAINTIFFS instituted the suit for permanent injunction restraining the defendants from operating any business, making, selling/transferring, offering for sale, advertising and in any other manner dealing with the goods or services using domain name "www. kabaribazaar. com" or any other combination thereof, as a website on the internet, identical with or descriptively similar to plaintiffs' trade name/domain name "www. kabadibazaar. com" as is likely to lead to passing off the business of the defendants as those of plaintiffs. On 24th April, 2000, plaintiffs were granted ex parte injunction on an application under order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 (for short 'code of Civil Procedure') which is sought to be confirmed and the defendants moved an application, under Order 39 Rule 4 Code of Civil Procedure for revocation of the interim injunction, pleading that the same was obtained by misrepresentation and false statements. This order will dispose of both these applications.

(2) BRIEFLY stated, plaintiffs' case is that they are proprietors' of the domain name "www. kabadibazaar. com" and trade-mark, in relation to the information website, dealing with second hand goods on the internet. They are involved in the business of e-commerce since April, 1999. They realised the vast potential of second hand goods market, which in the Indian context are. not readily consigned to destruction but are usually recycled. Every household deals with the permon celled "kabadiwala", who periodically takes away unwanted goods 'from the house which may be of some use in other context, like old newspapers, used bottles and broken electronic goods. These goods after necessary repairs are either sold in the market known for second hand goods or are used for manufacturing other items like paper bags etc. Formal markets for second hand goods are largely periodical and very limited in application and usually beyond the knowledge of vast majority of people. It is pleaded that taking into account that "kabadi" is a person who buys second hand products, and 'bazaar' denotes the place where trading takes place, plaintiffs, adopted this unique combination. They are proprietors of the said website and Are entitled to use the same with all its variations to the exclusion of others.

(3) THE plaintiffs have pleaded about the concept of domain names, their registration etc. They have also explained the working of their website. It is. stated that their website provides a meeting ground for the interested buyers and sellers through e-mail, thereby facilitating negotiations between the parties. They booked the domain name "www. kabadibazaar. com" on 5. 5. 1999 for launching the website. It was launched on 30,9. 1999. It attained instant publicity as Star News discussed launch of the website on 1. 10. 1999 and the programme was relayed eight times in Hindi and English; this website is accessible through some of the well known engines; and it had approximately 4000 members in the limited span of six months and various range of products. The use of a similar domain name is bound to cause confusion amongst the internet users. It is pleaded that before launching of the website by plaintiffs the said domain name was earlier booked by one Mr. Amar Nath, who agreed not to launch the website using this domain name. It is also pleaded that defendants have booked various other domain names like "rajourigardenmarket. com", "karolbaghmarket. com" with the intention of making illegal profits.

(4) DEFENDANTS in their written statement have denied the averments made in the plaint, and have, inter alia, pleaded that plaintiffs obtained ex parte injunction by misrepresentation, mis-statement and concealment of material facts, that defendants have live website working under the domain name "www. kabaribazaar. com" since November, 1999 attracting much more traffic than plaintiffs' website. The plaintiffs made an effort to purchase website defendants but they were not willing to sell, and details of various meetings between them have been given. It is pleaded that defendants spent large sum of money in promoting their website through media print, glow signs and banners etc. and that their website was registered with all leading Search Engines. It is also pleaded that word "kabadibazaar" or "kabaribazaar" is a known word in Hindi language. These words have specific connotation; namely, the market where second hand goods are bought and sold. It is used in common parlance by Hindi speaking population of the country. It being descriptive word is not capable of becoming distinctive of one sole trader.

(5) IT is further pleaded that the domain name "kabaaribazaar. com" was earlier registered in the name of the defendant and not in the name of Mr. Amar Nath as claimed in the plaint. The plaintiffs have made a completely false and misleading statement of their having contacted Amar Nath, who agreed not to launch a website using the domain name "kabaaribazaar. com". The plantiffs have copied the entire concept from the website "eby. com" Which has been in operation since august, 1995 and is the most popular site for second hand sales. It is pleaded that defendant No. 3 came into existence in 1998 and has been offering unique services to its clients through registration of various domain names which is not prohibited in law. The allegations of bad faith and cyber squatting are also denied. It is further pleaded that on 3. 7. 2000, plaintiffs had also obtained registration of the domain name "ekabari. com" and this domain co-exists with "kabadi. com". Plaintiffs have not filed any replication to the written 'statement despite opportunity.

(6) I have heard learned counsel for the parties and have been taken through the record. They firstly argued at length about the concept of internet, domain names, their registration and cyber squatting etc. There can be no dispute about these concepts.

(7) THE internet is a vast expanding network of computers and other devices linked together by various telecommunications media, enabling them to exchange and share the data. It can be described as "world Wide Web" of computers each connected to one and another, hosting information or facilitating commerce through website. To facilitate communication between them every computer connected to the internet (Host) is assigned "numerical ip (Internet Protocol) address" which comprises of four groups of numbers separated by decimals. As these are difficult to remember. Internet authorities also assign alphanumeric addresses called "domain names". The user may only need to know the name of the company of which he wishes to get information. A website can be reached by typing the "domain name" which usually gives fair indication of the content of the website. All websites on the internet have meta tags in the source of Web document. A meta tag is a HTML (Hyper Text Mark UP language) intended to describe the contents of the website and also referred to as software source code of the website Search for information on the Web is usually through. Internet directories and search engines, such as Alta vista, Lycos, Yahoo, etc.

(8) EVERY "domain name" is divided into levels. The "top level" domain name is a suffix which serves to place the- site within one of the broad category such as corn (for commercial),. edu (for educational). gov (for government). org (for organization),. net (network) etc. The "second level" domain name appears before the top level and serves as a trademark or trade name function. The prefix www. is a standard for all World Wide Web addresses. For example, user of the internet wishing to get information from Economic Times newspaper, has a reasonable expectation of reaching the Economic Times website by merely typing the address www. economic times. com, into software programs that are used to navigate the World Wide Web, without actually knowing internet address of the newspaper. Thus, domain name indicates to a user information as to the content of a website. It shares many of the attributes of trademarks or trade names. Each domain name is unique. The "domain name" cannot be same, irrespective of geographical distance, which may not be so in case of trademarks or trade-names. Once registered the "domain name" may ?be used from anywhere in the world.

(9) THE registration of domain names was taken up initially by. "the Internet Network Information Centre (Internic) in United States which is till date responsible for handling the day to day administration of the domain name system. The entity now responsible for assigning domain names is Network Solutions Inc. (NSI) acting on behalf of the Internic. Now, the task of registering domain names world-wide has been divided geographically. The system of assigning the domain name was on first -come-first-registered basis. It lead to the "reserving of many well known trade names, brand names, company names, etc. by individuals/corporations other than the ones with a genuine interest in the domain name, with a view to trafficking/doing business on the said domain name or offering the domain name to the genuine buyer. Obtaining fraudulent registration with an intent to sell the domain name to the lawful owner of the name at premium is called "cyber squatting". The Cyber squatters quickly sell the domain names to other non-related entities, thereby enabling passing off and diluting of famous trademark or trade names.

(10) FURTHER there can be no dispute that with the advancement of technology and communication through internet, domain names have attained as much legal sanctity, as the trade names. The services rendered at the internet are equally important for any business. The domain name is a valuable corporate asset entitled to protection like trade-names and trade-marks. The basic principles of the trade-mark law apply to the disputes in respect to internet domain names. This view finds support from the observations made in Yahoo inc. V. Akagh Arora (1999 PTC 201); Radiff. Communication limitmd Vs. Cyberbooth. AIR 2000 Bom 27

(11) TO re-call, it is not the case of the plaintiffs' that domain name "www. kabadibazaar. com. " is their registered trade-mark or trade name. The suit is not for an infringement action. It is for a "passing off action". The action for passing off lies when a trade-mark identified with an individual, is used by another, thereby trading on the goodwill acquired by the proprietor of the trade-mark, goods/services of the dishonest trader are mistaken for that of the lawful proprietor resulting in confusion. In an action for passing off the court is firstly required to consider whether the plaintiff is the proprietor of the trade-mark and then whether the defendants are passing off the trade-mark.

(12) SH. V. P. Singh, learned senior advocate for the plaintiff argued that the plaintiffs are proprietor of domain name www. kabadibazaar and related trade-mark in relation to an information website dealing with second hand goods on the internet; the word "kabadibazaar" is unique and newly coined by the plaintiffs and it does not appear in the dictionary, therefore, they are entitled to its use to the exclusion of all others Sh. C. M. Lal learned counsel for the defendants argued to the contrary. In order to appreciate this contention, it would be useful to refer to the case set up by the plaintiffs, in para 6 of the plaint. It reads:-

. . . The partners decided on the website www. kabadibazaar. com taking into account a kabadi being a person who takes in second hand product and bazaar reflects that there is some trading happening on the site. The plaintiffs, having adopted this unique combination, are the proprietors of the same and the unauthorised use or license by any other would amount to a violation of the right vested with the plaintiff. The present dispute relates to a domain name which serves as an address on the internet. "

(13) BARE reading of the above would show that the. ,. . . plaintiffs own case is that word "kabadi" is a person who takes away un-wanted goods from the house which may be of' some use in other context. "bazaar" is a place where the trading takes place. The periodical existence of markets for second hand goods, is in fact conceded in the plaint. Thus, the word "kabadibazaar" cannot be said to be a newly coined word. The word "kabadibazaar" also finds reference in Hindi dictionary "rajpal Hindi shabdkosh" Therefore, I am unable to accept the contention, that the word "kabadibazaar" is unique or was newly coined by plaintiffs and the same is rejected.

(14) LEARNED counsel for the plaintiff next argued that the expression "kabadibazaar" is not descriptive but suggestive and the word "kabadi" and "bazaar" have been used as unique combination. The business of the plaintiffs differs from Kabadi (the buyer and seller of second hand goods), since the plaintiffs are not involved in buying and selling of goods. The plaintiffs' target audience is English speaking, since 93% of the Internet community are English speaking and that almost 45% of the visitors on the plaintiffs' website are from overseas, to them, the word "kabadibazaar" simply implies plaintiffs' and the term kabadibazaar has no other meaning for such users. Plaintiffs have no other trade-mark for their website, therefore, consumers and users recognise plaintiffs by the word "kabadibazaar" as their trade name. Plaintiffs have used the words 'kabadibazaar' as a trade-mark and not descriptively. He further argued that trade-mark kabadibazaar. corn is not descriptive is evident from the fact that other websites which deal in second hand goods use expressions such as "khuljasimsim", "bazee", "bidrobuyindia"-and no one uses "kabadibazaar". Had the word "kabadibazaar" been descriptive, someone else would

(15) AT this stage, it would be useful to refer to some decided cases.

(16) IN J. P. Kapoor Vs. Micronix India 1994 supp (3) SCC 215 the Supreme Court observed that the word "mocro "being descriptive of micro technology used for production of many electronic goods which daily come to the market no-one could claim its exclusive user. It was herd:

"the word 'micro' being descriptive of the micro technology used for production of many electronic goods which daily come to the market, no one can claim monopoly over the use of the said word. Anyone producing any product with the use of micro-chip technology would be justified in using the said word as a prefix to his trade name. "

(emphasis supplied)

(17) IN Online India Capital Co. P. Ltd Vs. Dimensions Corporate IA. 3708/00 in Suit 772/00 (2000 PTC 396) learned Judge of this Court, declined the injunction requiring the defendants not to use website "www. Mutualfunds India. com" or other identical name similar to the domain name of the plaintiffs' www. Mutual fund India. com (without alphabet 's') holding that the word "mutual fund" is descriptive of the character of the services offered. It was held that the material placed on record falls short of indicating that the said word had acquired a secondary meaning, which is precondition for granting protection to a descriptive name. The Court cited with approval the observations made in Office Cleaning Services v. Westminster Window and General C1eaners Ltd. wherein it was held:-

"the use of descriptive words is jealously Safeguarded, so in the case of trade names the Court will not readily assume that the use by a trader aa part of his trade name of descriptive words already used by another trader as part of his trade name is likely to cause confusion and will easily accept small differences as adequate to avoid it. . . . where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must be run unless the first monopolises the words. The court will accept comparatively small differences as sufficient to avert confusion. "

(emphasis supplied)

(18) THE trade-mark is descriptive if it imparts information directly. If it stands for some idea which enquires some imagination to connect it with the goods it is "suggestive". The information may concern some characteristic or quality or ingredient of the product. Applying these principles here, as noticed above, the word "kabadi" means, a person, who buys unwanted goods and sometimes even unwanted goods are called "kabaad". "bazaar" is a place where goods are sold or bought. Thus, the word "kabadibazaar" is descriptive word as it imparts information directly. It requires no imagination to connect it with second hand goods. It cannot be said to be suggestive. I also find no force in the argument that the word "kabadibazaar" is unique merely because others have so far not used it

(19) IT was next argued that the said domain name "kabadibazaar" has achieved great reputation on account of numerous articles written about the plaintiffs' venture in newspapers and magazine including interviews on the Star News and Good Morning India. These articles clearly refer to the plaintiffs' website by the name of "kabadibazaar" and in the letters the plaintiff has been identified and recognised by the term "kabadibazaar". It was thus argued that the word "kabadibazaar" has acquired a secondary meaning. Reliance was placed on observations made on Globe Super Parts Vs. Blue Super flame Industries, AIR 1986 Delhi 245; Time Warnar entertainment Company L. P. Vs. A. K. Das 1997 PTC (17) 453 Chran Dass and M/s. Veer Industries (India) Vs. M/s. Bombay Crockery House 1984 PTC 102.

(20) IT is true that at times descriptive words or other devices used as trade-marks, may acquire distinctiveness over a period of time when such a mark has come to signify that particular goods are manufactured or services are rendered by a particular person it may be said that the mark has acquired secondary meaning. It could be demonstrated by proving advertisements, promotions and sales. But here it is not so. The material placed on record is not enough to prima facie, show that the domain name has acquired secondary meaning. In this case, as noticed above, the domain name was initially registered by one Mr. Amar nath. The plaintiffs and defendants had launched their prospective websites within a gap of about one month. Admittedly, the defendants' website has been functioning since November,1999. Several other websites under the domain name kabadibazaar have also been in existence in delhi Bombay, Bangalore as well as in USA. It was pleaded that as on 3. 8. 2000, website of the plaintiffs consisted of total six pages. These pages consisted of an introduction page, a page for searching for seconds and a page showing search results for seconds. A search of all categories, all sub categories, cities, listing all seconds on sale displayed only 21 items. Of these, 12 sellers were from New Delhi, 4 from Mumbai, 2 from nasik, and one leach from Rajkot and Calcutta and one was listed as "non Indian". Nothing has been placed on record to show the actual business carried out by the plaintiffs during this period. Even balance sheet or statement of account has not been filed. In these circumstances it is not possible to hold that the domain name of the plaintiffs "www. kabadibazaar. com" had acquired a secondary meaning.

(21) THE ratio of decisions cited by the learned counsel for the plaintiffs is not applicable to the facts of this case. In Globe Super Parts (Supra), the case of the plaintiffs was that they were manufacturing gas appliances since 1976 and marketing them under the trade-mark Super-Flame. The suit was instituted in 1985. The learned Judge came to the conclusion that super Flame was a coined or a fancy word and that the word is made meaningful only when applied to the product for which it was created. Findings on prior user of the word Super Flame for several years was recorded in favour of the plaintiff. In Time Warner Entertainment company L. P. (supra)it was found that the plaintiff has largest cable channel television under the trade - mark HBO/home BOX OFFICE in use since 1972 and it operated in 96 countries and the said trade mark was registered over 140 countries. The plaintiff applied for registration in India in 1994 for its motion pictures. There was Memorandum of Understanding signed between the plaintiffs and defendants. In 1996 the plaintiff came. to learn that defendant No. 2 proposed to launch a cable television service using CBO/cable BOX office in relation to proposed programme service. It was in that context that the interim injunction was confirmed pending final disposal of the suit. And in charan Dass and M/s. Veer Industries (India) the plaintiffs were registered proprietor of the trade-mark "perfect" and "swastik PERFECT" and also owner of the copyright registered design in respect of the stoves since 1964. The defendants started using the trade-mark "trishul PERFECT" and "vijay PERFECT". The defendants were stockists and sellers of the products of the plaintiffs. In this fact of situation it was held that defendants could easily pass off his own goods as those of the plaintiffs and the injunction was confirmed on 25/01/1984. These cases are thus not applicable to the facts of the case at hand.

(22) LASTLY learned counsel for plaintiffs referring to WIPO Uniform Dispute Resolution Policy, 1999 (for short, 'the Policy'), adopted by the Internet corporation for Assigned Names and Numbers (ICANN), incorporated into the Registration Agreements, setting forth terms and conditions, for resolving disputes between the Registrants over the registration and use of internet names, argued that the registration of the domain name-"www. kabaribazaar. com" by the defendants was abusive and in bad faith. He argued that this is clear from the facts: (a) that the defendants got registered various other combinations with different spellings of the said domain name; (b) that on receipt of the complaint, when the plaintiff No. l met the defendants in the first week of December, 1999, they asked for huge amount of money and were not willing to transfer for less and (6) that the defendants had also booked several other domain names like "rajourigardenmarket. com", "karolbaghmarket. com", with which they "have no connection and none of these websites are operational, and these sites consist of advertisements of defendants. These were booked with the intention of making illegal profits. Learned counsel for defendants argued to the contrary, submitting that booking and selling of domain names is not prohibited under the Internet Law; that the defendants have hosted sites for traders belonging to various markets in Delhi and the features and rates offered at the said sites are exceptional and rarely available on the internet. The defendants had live website "www. Kabaribazaar. com" since November, 1999 which attracted more traffic than that of the plaintiffs' website. In support of his submission reliance was placed on WIPO Arbitration and Mediation centre, Panel decisions, upholding registration and co-existence of domain names such as Sampatti. com Vs. Sampati. com, gateway. com Vs. gate-way. com, CITY utilities V. citiutilities. com and PET WAREHOUSE Vs. pet warehouse. com.

(23) IN order to appreciate the rival contentions it is necessary to refer to para 4 (a) of the above said policy which sets-forth the conditions to be proved for showing abusive registration. It reads as under:

(i) the domain name is identical or misleadingly similar to a trade or service mark in which the complainant has rights, and (ii) the holder of the domain name has no rights or legitimate interests in respect of the domain name; and (iii) the domain name has been registered and is used in bad faith.

(24) THE registration of a domain name is considered to be abusive only when all above conditions are met and not otherwise. Paragraph 4 (b) of the Policy states the requirement of Evidence of Registration and use in Bad Faith for the purpose of paragraph 4 (a) (iii) In law, the term "bad faith" does not simply mean bad judgment, but it implies the conscious doing of a wrong with a dishonest purpose. It contemplates a dishonest state of mind.

(25) IN this case the defendants and the plaintiffs had adopted the said descriptive domain names within a month. Nothing has been placed on record to show the quantum of busin

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ess carried out by the plaintiffs during the said period. The defendants' website was admittedly operational since November, 1999. Therefore, it cannot be said that defendants did not have any right or legitimate interest in the domain name which is essential requirement before it can be termed as abusive. In fact, as per the plaintiffs' case they had approached the defendants for buying their website but the defendants were not willing to sell. The defendants in their written statement have taken a specific stand that they had several operational websites. This statement has not been denied by the plaintiffs either in the replication or rejoinder. Moreover, functioning of various sites having similar domain names with different spellings, like 'mutual fund India. com' "mutualfundsindia. com", "networksolution. com", "network-solutions. corn", 'india. com" "indiya. com", 'indya. com' "India. com", 'naukri. com' "noukri. com" etc. has also not been denied. Nothing has been brought to my notice to show that the booking and selling of domain name is prohibited under the Internet Law. On the basis of material placed on record, prima facie, it is not possible to conclude that the registration by the defendants was abusive or was in bad faith. (26) TO conclude; the word "kabadibazaar" is a word commonly used in Hindi parlour having a dictionary meaning. It is a descriptive word which cannot serve as a trade-mark or trade-name unless it is established that it has attained a secondary meaning. Cases cited by the plaintiffs in the plaint, refer to well known trade names and the observations made therein are not applicable to the facts at hand. The material placed on record prima facie is not enough to show that the plaintiffs domain name* had acquired the secondary meaning. The allegations of abusive registration/cyber squatting are also not substantiated. In the result. On relative strength, the case appears to be in favour of the defendants. It may be clarified here that the ex parte ad interim injunction was granted to the plaintiffs on 24/04/2000, till the next date of hearing, but the same was not extended on account of the oral undertaking given by the counsel for defendants, which continued thereafter. (27) FOR the foregoing reason application of the defendants under Order 39 Rule 4 Code of Civil Procedure is allowed, and order dated 24/04/2000 granting interim injunction in favour of the plaintiffs and against the defendants is hereby vacated. Consequently application (I. A. No. 3064/2000) of the plaintiffs under Order 39 Rule 1 and 2 Code of Civil Procedure stands dismiseed. (28) NO order as to costs. Any observations made herein shall not affect the merits of the case.