2022 Supreme(Del) 503

IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Snapdeal Private Limited – Plaintiff
Vs.
Godaddycom Llc and Others – Defendants
C.S. (Comm.) No. 176 of 2021, I.A. No. 5407 of 2021
Decided On : 18-04-2022

Headnote:

The plaintiff, a registered proprietor of the trade marks SNAPDEAL, filed a suit against the defendants, domain name registrars (DNRs), for infringing its registered marks by offering, for registration, domain names which include the thread “SNAPDEAL”. The plaintiff sought an order and decree directing the DNRs to refrain from offering or registering any new domain names containing the plaintiff’s trademark SNAPDEAL in favor of third parties, thus amounting to infringement of the plaintiff’s registered trademark, passing off and unfair competition.

Fact of the Case:

The plaintiff, Snapdeal Pvt. Ltd., is the registered proprietor of the trade marks SNAPDEAL. The defendants, domain name registrars (DNRs), provide domain names for parties who may seek to register their respective websites under such domain names. The plaintiff alleged that various third parties, with whom the plaintiff has no connection or association whatsoever, are registering domain names which include the “SNAPDEAL” word/thread. These domain names, it is alleged, are infringing in nature, as the plaintiff is the registered proprietor of the “SNAPDEAL” trade mark. It is also alleged that such third parties are, through the websites operating under the said domain names, carrying out illegal activities, such as providing lucky draws etc. and are also, in certain cases, posing as customer care centres for the plaintiff’s products.

Finding of the Court:

The Court held that the DNRs are “intermediaries” within the meaning of Section 2(1)(w) of the Information Technology Act, 2000 (IT Act). The Court also held that the providing of brokerage services by the DNRs is not violative of the IT Act or otherwise illegal. The Court further held that providing of domain names containing ‘SNAPDEAL’ violates the trademark rights of the plaintiff. The Court also held that providing of privacy services by the DNRs is not illegal. The Court further held that the DNRs are entitled to “safe harbour” under Section 79 of the IT Act. The Court also held that it is not technologically feasible for the DNRs to ensure that aspiring registrants, who logged onto the websites of the DNRs, are not provided options which contain a particular thread or word. The Court also held that grant of the reliefs sought in the plaint would not affect the rights of the DNRs or of aspiring registrants. The Court also held that the plaint is not bad for non-joinder of necessary parties. The Court also held that the plaintiff is not entitled to the relief of a restraint, against the DNRs, from providing, in future, to any aspiring registrant, any domain name containing ‘SNAPDEAL’ as a quia timet relief.

Issues: 1. Are the DNRs “intermediaries” within the meaning of Section 2(1)(w) of the IT Act? Is this issue outside the scope of the present proceedings, for want of any prayer, in the plaint, for a declaration that the DNRs are not “intermediaries”? 2. Is the providing of brokerage services, by the DNRs, violative of the IT Act or otherwise illegal? 3. Does providing of domain names containing ‘SNAPDEAL’ violate the trademark rights of the plaintiff? How meritorious is the contention of the DNRs that, in doing so, they do not infringe the plaintiff’s trademark rights within the meaning of Sections 28 and 29 of the Trade Marks Act, which requires “actual use” of the trade mark, for infringement to result? The DNRs contend that infringement could be alleged only by the registrant who registers a domain name containing ‘SNAPDEAL’ and not by the DNRs. How far does Rule 3(d) of the 2021 IT Rules support the submission? 4. Is providing of privacy services, by the DNRs, illegal? 5. Are the DNRs entitled to “safe harbour” under Section 79 of the IT Act? Is this aspect outside the purview of prima facie consideration by the Court at the Order XXXIX stage? 6. Is it not technologically feasible for the DNRs to ensure that aspiring registrants, who logged onto the websites of the DNRs, are not provided options which contain a particular thread or word? How meritorious is the contention that the DNRs cannot vouchsafe for this, as the process of sourcing available domain names from the Domain Name Registry is automated? 7. Would grant of the reliefs sought in the plaint required the DNRs to adjudicate regarding the infringing nature of any available domain name? 8. How meritorious is the DNRs’ contention that no substantial relief would ensue in favour of the plaintiff, even were the prayer is in the plaint to be granted, as there are several hundreds of DNRs from whom aspiring registrants could obtain domain names containing the ‘SNAPDEAL’ word/thread? 9. Would grant of the reliefs sought in the plaint affects the rights of the DNRs or of aspiring registrants? 10. Is the plaint bad for non-joinder of necessary parties? 11. Is the plaintiff is entitled to the relief of a restraint, against the DNRs, from providing, in future, to any aspiring registrant, any domain name containing ‘SNAPDEAL’ as a quia timet relief?

Ratio Decidendi: The Court held that the DNRs are “intermediaries” within the meaning of Section 2(1)(w) of the IT Act. The Court also held that the providing of brokerage services by the DNRs is not violative of the IT Act or otherwise illegal. The Court further held that providing of domain names containing ‘SNAPDEAL’ violates the trademark rights of the plaintiff. The Court also held that providing of privacy services by the DNRs is not illegal. The Court further held that the DNRs are entitled to “safe harbour” under Section 79 of the IT Act. The Court also held that it is not technologically feasible for the DNRs to ensure that aspiring registrants, who logged onto the websites of the DNRs, are not provided options which contain a particular thread or word. The Court also held that grant of the reliefs sought in the plaint would not affect the rights of the DNRs or of aspiring registrants. The Court also held that the plaint is not bad for non-joinder of necessary parties. The Court also held that the plaintiff is not entitled to the relief of a restraint, against the DNRs, from providing, in future, to any aspiring registrant, any domain name containing ‘SNAPDEAL’ as a quia timet relief.

Final Decision: The Court rejected the plaintiff's prayer for an injunction against the DNRs offering any domain names which incorporate the plaintiff’s SNAPDEAL trademarks listed in Para-10 of the plaint.