DNRs to lose safe harbour for trademark abuse: Delhi High Court issues directions to curb online fraud

In a landmark judgment addressing the growing menace of criminal and terrorist activity, online fraud and trademark misuse, the Delhi High Court has issued wide-ranging directions to domain name registrars (DNRs), banks, government authorities and law enforcement agencies in a batch of cases [Dabur India Limited v Ashok Kumar and Ors]..Justice Prathiba M Singh ruled that the DNRs may not merely be considered as intermediaries but as complicit in enabling trademark infringement. This is because the services offered by them not only generate revenue for themselves and registry operators but also help persons with illegal and unlawful motives to register domain names that are similar to well-known marks, brands and house marks, the Court said. “In such a situation, not only shall the concerned DNRs lose the safe harbour protection, the said DNRs would be liable to be treated as infringers against whom reliefs would be liable to be claimed. Accordingly, such DNRs in an appropriate case could be held to be liable to pay monetary damages as well,” the Court said. Justice Singh underscored that DNRs’ failure to comply with the court order would necessitate stringent actions, including the blocking of their services in India through court orders. .The case arose from Dabur India Limited’s complaint that several websites and domain names falsely claiming to offer Dabur distributorships and franchises were collecting money from unsuspecting members of the public.These websites used Dabur’s trademarks, logos, trade dress and even displayed Dabur’s registered office address, creating a strong impression of authenticity. Prospective franchisees were allegedly asked to pay registration fees, after which the amounts were swiftly withdrawn from bank accounts unconnected with Dabur.After examining the arguments, the Court restrained the use of multiple infringing domain names and directed their suspension and blocking. .However, the judgment goes far beyond that. In a 248-page order, the Court noted that the present framework is “completely unsatisfactory” and in urgent need of reform. Therefore, it issued a slew of directions. .Directions to DNRs and registry operators.Registrant, administrative and technical details can no longer be masked by default, and privacy protection may only be offered as an opt-in, paid service. Upon requests from courts, law enforcement agencies or entities with legitimate interests, DNRs must disclose complete registrant information including contact and payment details within 72 hours. Domain names found unlawful or restrained by injunctions must be permanently blocked and not re-released for registration. Courts may restrain all extensions and variations of infringing domain names for well-known or distinctive trademarks while injunctions for descriptive or generic marks apply only to specific domains unless extended. DNRs should not promote alternative domains once an injunction is issued, failing which they risk losing safe harbour protection under the IT Act. Infringing domains must be transferred to trademark owners upon payment of standard charges. Search engines and DNRs are barred from promoting unlawful domains. All DNRs must appoint grievance officers, comply with KYC norms, implement Trademark Clearing House services, and share registration data with National Internet Exchange of India (NIXI)..Directions to the Government.The Court directed Ministry of Electronics and Information Technology (MeitY), Ministry of Home Affairs (MHA), and other authorities to consult stakeholders, including DNRs and registry operators, to explore a uniform domain registration framework similar to NIXI’s model. The Government should consider appointing NIXI as a nodal data repository for registrant details, or alternatively mandate data localisation in India, while ensuring compliance with the Digital Personal Data Protection Act. Non-compliant DNRs or registry operators may have their services blocked under Section 69A of the IT Act.MeitY and NIXI are to coordinate with the Internet Corporation for Assigned Names and Numbers (ICANN) to enable affordable access to Trademark Clearing House services for Indian brand owners. Additionally, the Controller General of Patents, Designs & Trade marks may publish a list of well-known trademarks with their authentic websites to help users verify genuine domains and deter misuse..Directions on granting ‘Dynamic +’ injunction.A Dynamic + injunction, which is an injunction automatically extending to future infringing domain names that incorporate the same trademark, will apply where a trademark appears identically in a domain name, appears with prefixes or suffixes likely to cause confusion or exists as an alphanumeric variation. If a legitimate registrant objects to suspension and informs the concerned DNR, the DNR may require the intellectual property owner to obtain a specific court order before taking action..Directions to banks.The Court directed all banks to mandatorily implement the “Beneficiary Bank Account Name Lookup” facility, as per the RBI circular dated 30 December 2024, for all online and UPI payments. Banks must also strictly comply with the Central Economic Intelligence Bureau’s SOPs dated 31 May 2024 when responding to requests from law enforcement agencies..Advocates Anirudh Bakhru, Ankur Chhibber, Prabhu Tandon, Avijit Sharma, Kripa Pandit, Christopher Thomas, Bhanu Gupta, Archita Mahlawat and Sazid Rayeen appeared for Dabur. Senior Advocates Darpan Wadhwa and Chander M Lall along with advocates Alipak Banerjee, Shweta Sahu, Parva Khare, Brijesh Ujjainwal, Pradyumn Sharma, Shivani Chaudhary, Mohd Kamran, Ananya Mehan, Nirupam Lodha, Kshitij Parashar, Vanshika Thapliyal, Yashvardhan Singh, Geetanjali Viswanathan, Yash Raj, Kruttika Vijay, Aishwarya Kane, K G Gopalakrishnan, Kunwar Raj Singh, Nisha Mohandas, Apoorv Kurup, Kirti Dadheech, Akshay Goel, Shivam Narang, Lalit Kashyap, Shubhendu Anand, Piyush M Dwivedi, Kushal Gupta, Mohd Umar, Prashant Prakash, Lakshmi Kruttika Vijay, Aishwarya Kane, Ateev Kumar Mathur, Amol Sharma, Sarfaraz Khan, Abdul Wahid, Rajesh Kumar Gautam, Deepanjal Choudhary, Sanjay Gupta, Ateev Mathur, Amol Sharma, Tanmay Garg, Aman Siwasiya, Varun Pathak, Thejesh Rajendran, Tanuj Sharma, Vinay Yadav, Ansh Kalra, Divyanshu, Kamna Behrani, Susmit Pushkar, Likivi K Jakhalu, Dinesh Sharma, Deepak Gogia, Aadhar Nautiyal and Shivangi Kohli represented the defendants. .[Read Judgment].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.