As the digital landscape evolves, the need to hold intermediaries to higher standards of accountability and duty of care has become increasingly pressing. This necessity arises from a growing trend in which intermediaries often overlook instances of infringement occurring on their platforms, to the detriment of the rights owners. With the rapid expansion of online services, intermediaries play a pivotal role and so, it is essential to implement stricter standards and practices that compel them to take proactive measures in monitoring and addressing potential infringements.

In this context, the case of Snapdeal Private Limited v. Godaddycom LLC and Ors. sheds light on the critical role these intermediaries play and raises vital questions about their liability in cases of trademark infringement.

Background: The Petitioner’s Contentions

In this case, Snapdeal, a popular e-commerce platform in India, initiated legal action against 32 Domain Name Registrars (DNRs), including Godaddy.com, for permitting the registration of numerous domain names that incorporated variants of its registered trademark “SNAPDEAL.” The plaintiffs argued that these DNRs were not merely passive intermediaries but rather active facilitators of the trademark infringement, thereby warranting the imposition of liability.

Their key claims are as follows:

  • Trademark Infringement: They contended that the registration of these infringing domain names constituted a breach of their trademark rights under Section 28(1) and Section 29(2) of the Trade Marks Act, 1999. They further contended that the defendants are not simply intermediaries or passive conduits in these transactions; instead, they actively profit from allowing the registration of infringing marks. As a result, they argued that these defendants should not qualify for the safe harbour protections granted to intermediaries under Section 79 of the Information Technology Act, 2000.
  • Unfair Trade Practices: They argued that the DNRs were knowingly profiting from these registrations, which undermine their intellectual property rights and causes the dilution of their registered trademark. They also alleged that the defendants were offering privacy services for the concealment of the identity of the registrants of the infringing domain names, further complicating the enforcement of their rights.
  • Practical Challenges: Snapdeal also emphasized the impracticality of approaching the Court for each instance of infringement, especially since there were hundreds of websites already registered with infringing domain names and the defendants were continuing to offer registration to similar infringing domain names to their users.

The Defendants’ Defence

The DNRs, on the other hand, put forth the following defences:

  • Non-Creation of Domain Names: They argued that they do not create these infringing domain names; instead, such names originate from the Domain Name Registry, which offers alternatives when a desired domain name is unavailable. These names can be traded freely among all DNRs and therefore they cannot be held liable for the creation of an infringing domain name.
  • Safe Harbour Protections: The defendants invoked Section 79 of the Information Technology Act, asserting that mere registration of a domain name does not equate to infringement of a trademark, and that liability only arises from the active use of an infringing domain name.

They also maintained that a blanket injunction against them would unjustly restrict their operations and infringe on the rights of legitimate registrants.

The Court’s Ruling and Implications

After careful deliberation, the Court issued a ruling that balanced the interests of trademark owners and DNRs. The Court’s directives included:

  • Establishment of a Grievance Mechanism: DNRs are required to implement a system allowing trademark owners to directly address their concerns regarding specific domain names. An Ombudsman will facilitate the cancellation or transfer of disputed domains, streamlining the dispute resolution process.
  • Implementation of an Abuse Policy: DNRs must develop clear abuse policies that enable them to cancel or transfer infringing domain names when necessary. If these policies are inadequate, trademark owners retain the right to seek judicial remedies.
  • Transparency in Registrant Information: DNRs are mandated to disable privacy protection features, ensuring that registrant details are accessible via the WHOIS database, thus allowing trademark owners to identify and address infringing registrations more effectively.

Moreover, the Court clarified that if DNRs engage in the provision of alternative domain names with the intent to profit, leading to infringement of third-party trademarks, they cannot invoke safe harbour protections.

Additionally, the Court refused to grant a blanket injunction and emphasized that there are no shortcuts to achieving justice, underscoring the necessity for plaintiffs to file individual actions for each infringing domain name so that each instance of alleged infringement is evaluated based on its own merits.

Conclusion: A Shift in the Landscape of Intermediary Liability

The Snapdeal case represents a significant shift in the landscape of intermediary liability, particularly concerning DNRs. It underscores the necessity for DNRs to take a proactive role in monitoring and addressing trademark infringements on their platforms.

As e-commerce continues to thrive, the implications of this ruling could lead to increased accountability among DNRs, fostering a more responsible digital marketplace.

The evolving standards of care for DNRs signal a broader trend toward holding intermediaries accountable, encouraging a culture of compliance and respect for intellectual property rights in the digital realm. This case could set a precedent for future disputes, convincing DNRs to reevaluate their practices and adopt measures that better protect trademark owners.

Written by Adlin Mini M