MIS. SATYAM INFOWAY LTD. A

v.

MIS. SIFFYNET SOLUTIONS PVT. LTD.

MAY 6, 2004

B

[RUMA PAL AND P. VENKATARAMA REDDI, JJ.)

Trade Marks Act, 1999 :

Ss. 2(z) and 2(zb)-"Service"-''Trade mark"-Internet domain

names-Action for passing

off-Held, a domain name may pertain to C

provision of

"services" within the meaning of s.2(z)-lnternet domain

name are subject

to legal norms applicable to other intellectual properties

such

as trade marks-A domain name could found an action for passing

off-In view of the nature of the business, it is necessary to maintain

exclusive identity which a domain name requires-On facts,

prima facie, D

apart from being the prior user, plaintiff has adduced sufficient evidence

to show that the public associates the trade name 'sify' with the plaintiff­

Trial court rightly granted temporary injunction in favour of the plaintiff­

Uniform Domain Name Disputes Resolution Policy, 1999-rr. 2, 4(a) and

4(b)-Intellectual Property Rights. E

The appellant, a company providing internet and computer

services, registered with the Internet Corporation for Assigned Names

and Numbers (ICANN)

and the Word Intellectual Property

Organization (WIPO), in the year 1999, several domain names prefixing F

thereto the word 'sify', which it claimed to have invented. The

respondent started its business

of internet marketing and claimed to

have registered with ICANN its domain names using the word 'siffy'

as

part of the said domain names in the year

2002. The appellant filed

a suit against the respondent contending that the latter was passing off

its business and services by using former's business name and domain

G

name. The civil court granted a temporary injunction in favour of the

plaintiff holding that it was the prior user

of the trade name 'sify' and

had earned good reputation thereunder, and that

use of the similar

domain name

by the defendant would cause a confusion in the mind

of the general public. It was also observed that the balance of H

465

466 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A convenience laid towards granting an injunction in favour of the

plaintiff. The defendant successfully challenged the interlocutory

order

in appeal before the High Court.

The appeal filed by the plaintiff before the Supreme

Court was

B resisted by the respondent-defendant contending that a domain name

is merely an address on the internet and could not be confused with

'property name' such as Trade Marks; and the registration of a

domain name with ICANN

is a contract with registration authority

allowing communication to reach the owner's computer via internet

C links channeled through registration authority's server and it does not

confer any intellectual property rights.

Allowing the appeal, the

Court

HELD : I. Internet domain names are subject to the legal norms

D applicable to other intellectual properties such as trade marks. The

court below rightly proceeded on the basis that principles relating to

passing off actions in connection with trade marks

are applicable to

dom1dn names. A domain name may be a word or name which is capable

of distinguishing the subject of trade or service made available to potential

E users of the internet. With the increase of commercial activity on the

internet, a domain name

is also used as a business identifier. Therefore,

the domain name not only serves as an address for internet communication

but also identifies the specific internet site. In the commercial field,

each

domain name owner provides information/services which are associated

F with such domain name. Thus a domain name may pertain to provision

of services within the meaning of s.2(z) of the 'Trade Marks Act, 1999.

Consequently a domain name as an address must,ofnecessity, 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.

G

(469-D; 474-F;

470-H; 471-A; 472-A, G, 8-E]

Rediff Communication Ltd. v. Cyberbooth and Anr,, AIR {2000)

Born. 27; Yahoo Inc. v. Akash Arora, {1999) PTC 19 201; Dr. Reddy's

Laboratories Ltd.

v. Manu Kosuri,

{2001) PTC 859 {Del.); Tata Sons Ltd.

v. Manu Kosuri, (200°1) PTC 432 {Del); Acqua Minerals Ltd. v. Pramod

H Borse & Anr,, (2001) PTC 619 (Del.) and Info Edge (India) Pvt. Lta. &

SATY AM INFOW A Y LTD. v. SIFFYNET SOLUTIONS PVT. LTD. 467

Anr. v. Shailesh Gupta & Anr., (2002) 24 PTC 355 (Del.), approved. A

Cadbury Scehweppes v. Pub Squash, (1981) RPC 429 and

Ervenwarnink v. Townend, (1980) RPC 313; ARISTOC v. RYSTA, (1945)

AC 68, referred to.

Intellectual Property and the Internet-Rodney D. Ryder, pp. 96, 97

and Information Technology Law Diane Rowland and Elizabeth Macdonald

2nd edn. p. 521, referred to.

B

2.1. The domain name may have all the characteristics of a

trademark and could found an action for passing off. A trademark is C

protected by the laws of a country where such trademark may be

registered

and consequently, a trade mark may have multiple

registration in many countries throughout the world.

On the other

hand, since the internet allows for access without any geographical

limitation, a domain name

is potentially accessible irrespective of the D

geographical location of the consumers. The outcome of this potential

for universal connectivity

is not only that a domain name would

require worldwide exclusivity but also

that national laws might be

inadequate to effectively protect a domain name. The lacuna necessitated

international regulation of the domain name system (DNS). This

E

international regulation was effected through

WIPO and ICANN and

India

is a member of

WIPO. [474-C, G-H; 475-A-B]

2.2. The outcome

of consultation between ICANN and

WIP(J has

resulted

in setting up a

system of registration of domain names with' F

accredited Registrars, and the evolution of the Uniform Domain N:Jme

Disputes Resolution Policy (UDNDR Policy). While registration with

accredited Registrars, which

is provided on a first come first serve

basis, may not have the same consequences as registration under the

Trademarks Act, 1999 nevertheless it

at least evidences recognized

user

of a

mat:k. Besides, the UDNDR Policy is instructive as to the kind G

of rights which a domain name owner may have upon such registration.

A prior registrant can protect its domain name against subsequent

registrants. Confusing similarity

in domain names may be a ground for

complaint and similarity

is to be decided on the

possibility of deception

amongst potential customers. [475-D-E; 477-E-F]

H

468 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A Final Report of WIPO dt. J0.4.1999, referred to.

2.3.

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

B 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.

[477-G-H;

478-AJ

3.1. A passing off action is based on the goodwill that a trader has

C in his name unlike an action for infringement of a trademark where

a

trader's right is based on property in the name as such.

On the basis

of the evidence on record, prima facie, the appellant has been able to

establish the -goodwill and reputation claimed by it in connection with

the trade name 'sify'. The appellant

is the prior user and has the right

D to debar the respondent from eating into the goodwill it may have built

up in connection with the name. [478-B; 479-C-D;

481-AJ

3.2. Apart from the close visual similarity

between· 'sify' and

'siffy', there

is phonetic similarity between the two names. The

E addition of 'net' to 'siffy' does not detract from this similarity. The

similarity

in the name may lead an unwary user of the internet of

averiige intelligence and imperfect recollection to assume a business

connection between the two. Such user may, while trying to acce£s the

information

or services provided by the appellant, put in that extra

'f'

F and be disappointed with the result. The respondent's assertion that

confusion is unlikely because they operate in different field is factually

incorrect and legally unte.nable. A domain name

is accessible by all

internet users and the need

to maintain an exclusive symbol for such

access

is crucial. Therefore, a deceptively similar domain name may

not only lead

to a confusion of the source but also the receipt of

G unsought for services. (479-E; 481-B, E-G]

3.3. Given the nature

of the business, it is necessary to maintain

the exclusive identity which a domain name requires.

Apart from being

the prior user, the appellant has adduced sufficient evidence

to show

H that the public associates the trade name 'sify' with the appellant. The

SATYAMINFOWAYLID. v. SIFFYNET SOLUTIONS PVT. LID. [RUMA PAL,J.]469

respondent, on the other hand, has produced little proof to establish A

the averments in support of its case. The trial court has rightly granted

relief to the appellant to which it

is entitled. The decision of the High

Court

is set aside and that of the civil court affirmed. (482-8-F)

CIVIL

APPELLATE JURISDiCTION : . Civil Appeal No. 3028 of B

2004.

From the Judgment and Order dated 18.11.2003 of the Karnataka

High Court in M.F.A. No. 4277

of

2003.

P. Chidambaram, A.A. Mohan, K. Mugunthan and K.V. Mohan for C

the Appellant.

· Basava Prabhu, S. Patil, Shivaprabhu, S. Hiremath, Subramanya

Prasad and AS. Bhasme for the Respondent.

The Judgment

of the Court was delivered by RUMA PAL, J. : Leave granted.

D

The principal question raised in. this appeal in whether internet

domain names are subject to the legal norms applicable

to other intellectual

properties such

as trade marks? The appellant which was incorporated in E

1995 registered several domain names like

www.sifonet, www.sifomall.com,

www.siforealestate.com

etc. in June 1999 with the internationally recognised

Registrars, viz the internet Corporation for Assigned Names and Numbers

(I.CANN) and the World Intellectual Property Organisation

(WIPO). The

word 'Sify

is a coined word which the appellant claims

to have invented F

by using elements of its corporate name, Satyam lnfoway. The appellant

claims a wide reputation and goodwill in the name 'Sify".

The respondent started carrying on business of internet marketing

under the domain names, www.sifJYnet.net and www.sijJYnet.com from 5th

June 2001. The respondent claims to have obtained registration of its two G

domain names with !CANN on 5th June, 2001 and 16th March, 2002

respectively.

Coming to know

of the use of the word 'Siffy' as part of the

respondent's corporate and domain name, the appellant served notice on

H

470 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A 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

B appellant's 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 respondent's domain names were similar to the domain name of

C the appellant and that confusion would be caused in the mind of the general

public by such deceptive similarity.

It was also found that the balance of

convenience was in favour of granting an injunction in favour of the

appellant.

D The respondent

preferred an appeal before the High Court. An interim

stay

of the City Civil Judge's judgment was granted. The appeal was

ultimately allowed by the High Court. This order is the subject matter

of

challenge in this appeal. In allowing the appeal, the High Court was of the

view that merely

because the appellant had started the business first, no

E 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

F 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.

It was held that the

respondent had invested a large amount

in establishing its business and that

it

had enrolled about 50,000 members already. It was held that the

respondent would

be put to great hardship and inconvenience and also

G irreparable injury in case the injunction order was granted.

On the other·

hand, since the appellant had a separate trade name, namely, Satyam

Infoways, no injury or hardship would be caused to the appellant if the

order

of injunction was not granted.

H From the narration of these facts, it is clear that both the Courts below

SA TY AM INFOWAY LTD. v. SIFFYNET SOLUTIONS PVT. LTD. [RUMA PAL,J.]471

had proceeded on the basis that the principles relating to passing off actions A

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 !CANN did not confer any B

intellectual property right; that it is a contract with a registration authority

allowing communication to reach the owner's computer via internet links

channelled through the registration authority's server and that it

is akin to

re~i.stration of a company name which is a unique identifier of a company

but

of itself confers no intellectual property rights.

A

"trade mark" has been defined in section 2(zb) of the Trade Marks

Act, 1999 (hereafter referred to as "the Act") as meaning :

c

"trade mark means a mark capable of being represented graphically

and which

is capable of distinguishing the goods or services of D

one person from those of others and may include shape of goods,

their packaging and combination

of

colours".

Therefore a distinctive mark in respect of goods or services is a 'Trade

mark'.

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 (S.2(k).

E

"Goods" have been defined in Section 20) as meaning "anything" F

which is the subject of trade or manufacture, and "Services" has been

defined in section 2(z)

as meaning :

"service of any description which is made available to potential

users and includes the provision

of services in connection with G

business of any industrial or commercial matters such as banking,

communication, education, financing, insurance, chit funds, real

estate, transport, storage, material treatment, processing, supply

of

electrical or other energy, boarding, lodging, entertainment,

amusement, construction, repair, conveying

of news or information H

472 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A and advertising."

Analysing and cumulatively paraphrasing the relevant parts of the

aforesaid definitions, the question which

is apposite is whether a domain

name can be said to be a word or name which

is capable of distinguishing

B the subject of trade or service made available to potential users of the

internet?

The original role

of a domain name was no doubt to provide an

address for computers on the internet. But the internet has development

C from a mere means of communication to a mode of carrying on commercial

activity. With the increase

of commercial activity on the internet, a domain

name

is also used as business identifier. Therefore, the domain name not

only serves as an address for internet communication but also identifies the

specific internet site.

In the commercial field, each domain name owner

provides information/services which are associated with such domain

D name. Thus 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 i:iot 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, services to identify and

E distinguish the business itself, or its goods or services, and to specify its

corresponding on line internet location'. Consequently a domain name as

an address must,

of necessary, 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

F 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 large number

of trademarks containing the same name can

comfortably

co-t:xist because they are associated with different products,

belong to business

in different jurisdictions etc., the distinctive nature of

G the domain name providing global exclusivity is much sought after. The

fact that many consumers searching

of a particular site are likely, in the

first place, to try and guess its domain name has further enhanced this

value"

2

• The answer to the question posed in the preceding paragraph is

I. Intellectual and the lhtemet-RODNEY D RYDER-Page 96 to 97.

2. See Infonnation Technology Law Diane Rowland and Elizabeth Macdonald 2nd

H Edition p. 251.

SA TY AM INFOWAY LID. v. SIFFYNET SOLUTIONS PVT. LID. [RUMA PAL. J.]473

therefore an affirmative.

The next question

is would the principles of trade mark law and in

particular those relating to passing

off apply? An action for passing off,

A

as the phrase

"passing off' itself suggests, is to restrain the defendant from

passing

off its goods or services to the public as that of the plaintiff's. It B

is an action not only to preserve the reputation of the plaintiff but also to

safeguard the public. The defendant must have sold its goods

or offered

its service in a manner which has 'deceived or would

be likely to deceive

the public into thinking that the defendant's goods or services are the

plaintiff's. The action

is normally available to the owner of a distinctive

trademark and the person who,

if the word or name is an invented one, C

invents and uses it. If two trade rivals claim to have individually invented

the same mark; then the trader who is able to establish prior user will

succeed. The question is, as has been aptly put, who gets these first?

It is

not essential for the plaintiff to prove long user to establish reputation in

a passing off action. It would depend upon the volume of sales and extent D

of advertisement.

The 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

E

malafide intention on the part of the defendant. Ofcourse, if the

misrepresentation

is intentional, it might lead to an inference that the

reputation

of the plaintiff is such that it is worth the defendant's while to

cash

in on it. An innocent misrepresentation would be relevant only un the

question

of the ultimate relief which would be granted to plaintiff.

3

What F

has to be established is the likelihood of confusion in the minds of the

public, (the word

"public" being understood to mean actual or potential

customers or users) that the goods or services offered by the defendant are

the goods

or the services of the plaintiff. In assessing the likelihood of such

confusion the courts must allow for the

"imperfect recollection of a person

of ordinary memory"

4

The third element of a passing off action is loss or the likelihood of

it.

G

3. CADBURY SCEHWEPPESv. PUB SQUASH, (1981) RPC 429, ERVEN WARNINK

v. TOWNEND, (1980) RPC 31.

4. ARISTOC v. RYSTA, (1945) AC 68. H

474 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A 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 in e-commerce with its

rapid progress and instant (and theoretically limitless) accessibility to users

and potential customers and particularly so

in areas of specific overlap.

B

Ordinary consumers/users seeking to locate the functions available unrler

one domain name may be confused if they accidentally arrived at a

different but similar web site which offers

no such services.

Such users

c

could well conclude that the first domain name owner had mis-represented

its 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.

Over the last few years the increased user of the internet has led to

a proliferation

of disputes resulting in litigation before different High

D Courts in this country. The Courts have consistently applied the law

relating to passing

off to domain name disputes.

Some disputes were

between the trademark holders and domain name owners. Some were

between domain name owners themselves. These decisions namely

Rediff

Communication Ltd. v. Cyberbooth and Anr., AIR

(2000) Bombay 27,

E Yahoo Inc. v. Akash Arora, (1999) PTC 19 201, Dr. Reddy's Laboratories

Ltd.

v. Manu Kosuri,

(2001) PTC 859 (Del.), Tata Sons Ltd. v. Manu

Kosuri, (2001) PTC 432 (Del.), Acqua Minerals Ltd. v. Pramod Borse &

Anr., (2001) PTC 619 (Del.), and info Edge (India) Pvt. Ltd. & Anr. v.

Shailesh Gupta & Anr., (2002) 24 PTC 355 (Del.) correctly reflect the law

F as enunciated by us. No decision of any court in India has been shown to

us which has taken a contrary view. The question formulated at the outset

is therefore answered

in the affirmative and the submission of the

respondent is rejected.

However, there is a distinction between a trademark and a domain

G name which is not relevant to the nature of the right of an owner in

connection with the domain name, but is material to the scope of the

protection available to the right. The distinction lies

in the manner in which

the two operate. A trademark

is protected by the laws of a country where

such trademark may be registered. Consequently, a trade mark may have

H multiple registration in many countries throughout the world. On the other

...

SA TY AM INFOWAY LTD. v. SIFFYNET SOLUTIONS PVT. LTD. [RUMA PAL, J.]475

hand, since the internet allows for access without any geographical A

limitation, a domain name is potentially accessible irrespective of the

geographical location

of the consumers. The outcome of this potential for

universal connectivity

is not only that a domain name would require world

wide exclusivity but also that national laws might be inadequate to

effectively protect a

domai!). name. The lacuna necessitated international B

regulation of the domain name system (DNS). This international regulation

was effected through WIPO and ICANN. India is one of the 171 states of

the world which are members ofWIPO. WIPO was established as a vehicle

for promoting the protection, dissemination and use

of intellectual property

through the world. Services provided by

WIPO to its member states include C

the provision of a forum for the development and implementation of

intellectual property policies internationally through treaties and other

policy instruments.

5

The outcome of consultation between !CANN and

WIPO has resulted D

in the setting up not only of a system of registration of domain names with

accredited Registrars but also the evolution

of the

Uniform Domain Name

Disputes Resolution Policy (UDNDR Policy) by !CANN on 24th October

1999. As far as registration is concerned, it is provided on a first come first

serve basis.

While registration with such Registrars may not have the same

consequences as registration under the Trademark Act, 1999 nevertheless

it at least evidences recognised user

of a mark. Besides the

UDNDR Policy

E

is instructive as to the kind ofrights which a domain name owner may have

upon registration with !CANN accredited Registrars. In Rule 2

of the F Policy, prior to application for registration of a domain name, the applicant

is required to determine whether the domain name for which registration

is sought "infringes or violates someone else's rights". A person may

complain before administration-dispute-resolution service providers listed

by !CANN under Rule 4(a) that :

G

(i) a domain name is

idenli,~al or confusingly similar to a

trademark or service mark in which the complainant has

5. Final Report of

WIPO dt. 30.4.1999. H

476 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A rights; and

(ii) the domain name owner/registrant has no right or legitimate

interest

in respect of the domain name; and

B (iii) a domain name has been registered and is being used in bad

faith.

Rule 4(b) has listed by way

of illustration the following four

circumstances

as evidence of registration and use of a domain name in bad

c faith.

D

E

F

G

H

(i) circumstances indicating that the domain name owner/

registrant has registered or the domain name owner/registrant

has acquired the domain name primarily

for the purpose of

selling, renting or otherwise transferring the domain name

registration to the complainant who is the owner

of the

trademark or service mark or to a competitor

of that

complainant, for valuable consideration

in excess of its

documented out-of-pocket costs directly related to the domain

(ii)

name; or

the domain name owner/registrant has registered the domain

name in order to prevent the owner

of the trademark or

service mark from

refleci ing the mark in a corresponding

domain name, provided that

it has engaged in a pattern of

such conduct; or

(iii) the domain name owner/registrant has registered the domain

name primarily

for the purpose of disrupting the business of

a competitor; or

(iv) by using the domain name, the domain name owner/registrant

has intentionally attempted to attract, for commercial gain

internet users, to its web site or other on-line location, by

creating a likelihood

of confusion with the complainants

mark

as to the source, sponsorship, affiliation, or endorsement

SA TY AM INFOWAY LTD. v. SIFFYNET SOLUTIONS PVT. LTD. [RUMA PAL, J.]477

of the domain name owner/registrant web site or location or A

of a product or service on its web site or location.''

The defences available to such a complaint have been particularised

"but without limitation", in Rule 4(c) as follows :

(i) before any notice to the domain name owner/registrant,

the use of,

or demonstrable preparations to use, the

domain name or a name corresponding to the domain name

in connection with bona fide offering of goods or services;

or

(ii) the domain name owner/registrant (as an individual, business,

or other organization) has been commonly known by the

domain name, even

ifit has acquired no trademark or service

mark rights; or

(iii) the domain name owner/registrant

is making a legitimate

non-commercial or fair use

of the domain name, without

intent for commercial gain to misleadingly divert consumers

or to tarnish the trademark or service mark at

issue".

These rules indicate that the disputes may be broadly categorised

as : (a) disputes between trademark owners and domain name owners and

B

c

D

E

(b) between domain name owners inter se. What is important

Lr the

purposes

of the present appeal is the protection given to intellectual

property

in domain names. A prior registrant can protect its domain name F

against subsequent registrants. Confusing similarity in domain names may

be a ground for complaint and similarity

is to be decided on the possibility

of deception amongst potential customers. The defences available to a

compliant are also substantially similar to those available to an action for

passing

off under trademark law.

Rule 4(k) provides that the proceedings under the

UDNDR Policy

would not prevent either the domain name owner/registrant or the

complainant from submitting the dispute to a court

of competent jurisdiction

for independent resolution, either before proceeding under ICANN's

G

policy or after such proceeding is concluded. H

478

SUPREME COURT REPORTS (2004] SUPP. 2 S.C.R.

A 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

B under the laws relating to passing off.

This bring

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

as trader's right

is based on

prope1iy in the name as such. Therefore unless

C goodwill can be established by the appellant by showing that the public

associates the name 'Sify' with the services provided by the appellant, it

cannot succeed.

The appellant's claim to be a leading information technology services

D company and one of the largest internet services providers in the country

has not been seriously disputed by the respondent nor

is there any challenge

to the appellant's claim that it has more

th:.:1 5 lac subscribers, 480 Cyber

cafes, and 54 points of presence all over India. That it is the first Indian

internet company to be listed

in 1999 with NASDAQ where it trades under

the tradename

'Sify' was given extensive coverage in leading national

E Newspapers. The appellant has brought on record the stringent conditions

and deposit

ofa 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

F appellant has widely used the word

Sify as a trade name/domain name for

its software business and services. The appellant's website www.sif.Y.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

G sale figure and expenses incurred on advertisement and market promotion

of its business under the trademark

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.

1958 (since replaced by the Trade

H Marks

Act. 1999).

SA TY AM INFOWAY LID. v. SIFFYNET SOLUTIONS PVT. LTD. [RUMA PAL 1]479

In support of its claim of goodwill in respect of the name of 'Sify', A

the appellant had brought on record press clippings of articles/newspapers

in which the appellant has been referred to as 'Sify'. For example, a news

item published

in Hindu on 5th May

2000 talks of "Sify plans of internet

gateways". Another article published in the Business Standard on 11th May

2000 says "Sify chief sees strong dotcom valuations rising". There are B

several other publications filed along with the plaint all of which show that

the appellant was referred to as 'Sify'. That the listing of the appellant with

NASDAQ in 1000 under the trade name 'Sify' was featured on several

newspapers has been established by copies of the news items. Documents

have also been produced to show that the appellant had been awarded C

prizes in recognition of achievements under the tradename 'Sify'. For

example, the Golden Web Award for the year 2000 was awarded to the

appellant's corporate site www.sifj;corp.com. A number of advertisements

in connection with "e-market services from Sify", "Messaging solutions

from Sify" have also been filed. It is unfortunate that none of these

documents were even noticed by the High Court. We have, therefore, been

D

constrained to appreciate the evidence and on doing so, we have reached,

at

leastprimafacie conclusion that the appellant has been able to establish

the goodwill and reputation claimed by it

in connection with the tradename

'Sify'.

Apart from the close visual similarity between 'Sify' and 'Siffy',

there is phonetic similarity between the two names. The addition

of 'net'

to

'Siffy' does not detract from this similarity.

E

According to the respondent the word "Siffynet" which features both F

as its corporate name and in its domain names was derived from a

combination

of the first letter of the five promoters of the respondent,

namely

Saleem, Ibrahim, Fazal, Fareed and Yusuf, and the word "net"

implies the business of the respondent. The stand taken by the respondent

is that it was not aware

of the appellant's trade name and trading style 'Sify'. This is not credible for several reasons. In answer to the legal notice G

issued by the appellant no such case was made. The refusal of the

respondent to comply with the demand notice issued by the appellant was

based only on an alleged difference between the trade name, 'Sify' and

'Siffynet' and a claimed difference in the field or operation. The High

Court has not also found that the respondent-company was unaware or

H

480 SUPREME COURT REPORTS (2004] SUPP. 2 S.C.R.

A ignorant of the use of the trade name 'Sify' by the appellant. The reason

put forward by the respondent for the choice

of the word

'Siffy' as part

of its corporate and domain names appears from the second written

statement filed by the respondent before the trial Court where it has been

said that the respondent company was the brain child

of its founder

B Director, Mr. Bawa

Salim and that the word 'Siffy' was invented from the

first letters

of the five persons involved in the setting up of the respondent

company. But only four names were given. The fifth name was given

in

the counter affidavit filed in this

Court. In the first written statement and

the first answer to the interlocutory application

of the appellant verified by

C Bawa

Salim was Managing Director of the respondent, no such case as has

been put forward now regarding the choice

of the name

"Siffy" was made

out.

In fact in the original written statement, the respondent had stated that

though its domain name

"was got registered in the name of one Mr. C.V.

Kumar, now the said person does not have any connection with this

D defendant since the second defendant is no longer in existence as a

partner(sio)". Thus, it appears that the respondent may originally have been

a firm because C.V. Kumar, in whose name 'Siffynet' was registered, has

been described as a partner. Even

if this inference is incorrect and the

respondent was always a company,

we are still not convinced as to the

E reason why the name

"Siffy" was chosen by the respondent. If the

originators

of the company were the five persons viz.

Salim, Ibrahim,

Fazal, Fareed and Yousuf why was the domain name

of the respondent

F

already registered as 'Siffynet' in the name of Mr.

C.V. Kumar? Furthermore,

the list

of names provided by the respondent to support its case that

'Siffy'

as an original acronym was based on the initial letters of the respondent

company's promoters seems unsupported

by any evidence whatsoever. No

document apart from a bare assertion that the five named individuals had

any special collective role in the origination or promotion

of the business

has been filed. The appellant's internet based business was, from 1999,

high profile. The evident media prominence to

'SIFY' and large subscriber

G base could have left the respondent in no doubt as to its successful

existence prior to the adoption

of

Siffy as part of its corporate name and

registration

of Siffynet and Siffy.com as its domain names. It would

therefore appear that the justification followed the choice and that the

respondent's choice

of the word

"Siffy" was not original but inspired by

H the appellant's business name and that the respondent's explanation for its

SA TY AM INFOWA Y LID. v. SIFFYNET SOLUTIONS PVT.LID. [RUMA PAL, J.]481

choice of the word "Slffy" as a corporate and domain name is an invented A

post-rationalisation .. ,

What 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

B

in connection with the name.

Another facet

of passing off is the likelihood of confusion with

possible injury to the public and consequential loss to the appellant. The

similarity in the name may lead an unwary user

of the internet of average

intelligence and imperfect recollection to assume a business connection

C

between the two.

Such user may, while trying to access the information

or services provided by the appellant, put in that extra

'f' and be

disappointed with the result. Documents have been filed by the respondent

directed at establishing that the appellant name

Sify was similar to other

domain names such

as Scifinet, Scifi.com etc. The exercise has been D

undertaken by the respondent presumably to show that the word

'Sify' is

not an original word and that several marks which were phonetically

similar to the appellants' trade name are already registered. We are not

prepared to deny the appellant's claim merely on the aforesaid basis. For

one, none

of the alleged previous registrants are before us. For another, E

the word 'sci-ti is an abbreviation of 'science fiction' and is phonetically

dissimilar to the word

Sify. (See Collins Dictionary of the English

Language).

The respondent then says that confusion

is unlikely because they F

operate in different fields. According to the respondent their business is

limited to network marketing unlike the appellant which carries on the

business

of software development, software solution and connected activities.

The respondent's assertion

is factually incorrect and legally untenable. A

domain name,

is accessible by all internet users and the need to maintain

an exclusive symbol for such access is crucial as we have earlier noted. G

Therefore a 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 respondent's website

in which they have advertised themselves as providing inter alia software

solution, integrating and management solutions and software development

H

482 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R.

A covering the same field as the appellant. To take a specific example, the

respondent's brochure explicitly offers Intranet and Extranet solutions

which are also explicitly offered by thl! 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

B of access but the possibility of loss in the form of diverted customers is

more than reasonably probable.

The last question

is

-where does the balance of convenience lie?

Given the nature

of the business, it is necessary to maintain the exclusive

C identity which a domain name requires. In other words, either

'Sify' or

'Siffy' must go. Apart from being the prior user, the appellant has adduced

sufficient evidence to show that the public associates the trade name SlFY

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

D 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

E 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

F respondent can carry on its business and inform its

111embers of the change

of name. We are conscious of the fact that the grant of an interlocutory

order may disrupt the respondent's business. But that 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.

G 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 bonajide concurrent use

and where the right to use was co-equal. The doubtful explanation given

by the respondent for the choice

of the word

"Sify'' coupled with the

H reputation of the appellant can rationally lead us to the conclusion that the

SA TY AM INFOWA Y LTD. v. SIFFYNET SOLlITIONS PVT. LTD. [RUMA PAL, J.]483

respondent was seeking to cash in on the appellant's reputation as a A

provider of service on the internet. In view of our findings albeit prima

facie

on the dishonest adoption of the appellant's tradename by the

respondent, the investments made

by the appellant in connection with the

trade name, and the public association

of the tradename

Sify with the

appellant, the appellant

is entitled to the relief it claims. A different B

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.

The appeal

is accordingly allowed. The decision of the High Court C

is set aside and that of the City Civil Court affirmed. There will be no order

as to costs.

R.P. Appeal allowed