WHAT IS THE ACQUISITION OF DOMAIN NAMES AND RELATED TRADEMARK OR SERVICE MARK RIGHTS?

INTRODUCTION:

Intellectual property Rights concept was introduced to provide legal protection and consideration to any property so invented or created by human intellect. Intellectual properties are both tangible and intangible in nature works on the maxim of right in rem which means a right against the whole world but oneself. The rights are reserved for the creativity, efforts, intellect, and labour of the inventor or creator so creating the protected property. There are various types of Intellectual Property protection mechanism that exist, such protection mechanism are copyright, trademark, patents, etc. They are used as a central asset to the various companies and helps in formulating a greater part of their business strategies. The Intellectual Property is one of the reasons because of which different companies have to go through the process of merger or acquisition so as to strengthen its market shares, promote, improve and create more effective and efficient management. The laws governing use, protection and prohibition of intellectual property are called intellectual property laws. In India, for the protection of intellectual property, various classes of laws and various laws were enacted by the government of India for creating a governing body over this section of the society. Various laws so drafted by the government of India were the patents Act 1970, The Copyrights Act 1976, The Trademarks Act 1999, The Designs Act 2000, etc. Merger and acquisition work as a tool for growth, expansion and reconstruction of the structure of many companies for maximizing their wealth for their stakeholders and to create a hold for themselves and give them a good standing position in the global market. A merger is a merging or coming together of two firms into one firm for working in a much more efficient manner and to maximize profits and achieve the desired goals of the firms and cause a common good. On the other hand, the acquisition is considered as a takeover of one company by another company after purchasing its majority of ownership shares/stake.

DOMAIN NAMES AND TRADEMARKS:

Trademarks or service marks are granted for the recognition and protection in those national and international boundaries only where these rights are properly registered. The domain names working as trademarks or service marks are registered and protected at the global level by The ICANN [Internet Corporation for Assigned Names and Numbers], with support and cooperation by various national and international protection authorities working under the directly concerned national Trademark Law or the diverse International Trademark Treaties of the world. Many national or international trademark laws are not completely capable of protecting a domain name in countries of the world over.

For any kind of dispute resolution according to the UDNDR Policy of October 1999, a person or entity should complain before the competent administration-dispute-resolution services providers established by the local government [listed by ICANN under Rule 4(a)], that:

1. The specified domain name is very strikingly or confusingly to some extent similar to a previously registered domain name or trademark of the complainant;
2. If the accused domain name has already been registered in someone else’s name and such domain name is being used in bad faith with malicious intent;
3. There must exist some kind of case talking about the matter of trademark infringement against the complainant.

ACQUISITION OF DOMAIN NAMES:

Domain names in the process of mergers and acquisitions are one of the critical elements which are to be considered and given due importance. The process of Merger and Acquisition activity is very complex and involves careful preparation and a great amount of expertise, advice and consideration. The domain name is an area that is to be considered in the process of Merger and Acquisition activity as it is the transfer of licenced rights with respect to the domain names of by the businesses being merged or being acquired. The key factors which involve risk in domain names in mergers and acquisitions are:

1. The Merger and acquisition agreement consists of no provisions for transfer of domain names.
2. Mostly the domain names are held by a holding company and therefore not included as a part of the deal.
3. In most circumstances the domain names are not transferred to the acquiring party’s domain name portfolio, and
4. Eventually, the domain names are expired with the due passage of time.

The procedure of transfer of the domain name:

The most important documents which the companies should prepare beforehand for the transfer of domain names through the process of Merger and Acquisition are:

1. The Merger and Acquisition Agreement which should specifically outline all the Intellectual Property transfer such as domain names;
2. A transfer of ownership form which should be signed and dated by both parties for each domain name involved in the agreement;
3. A document is known as the assignment agreement or a letter of undertaking.

The Assignment agreement is a very important factor because it indicates the intentions of both parties in the domain name transfer. This letter contains undertakings and warranties that the new owner is the sole and the only owner and that the domain name is not subject to any claims, or history with other owners, or of any infringement or any disputes. There should be a law which should be supported by a clause which helps in indemnifying the buyer of the domain name which eventually will help in protecting themselves through any transaction. The protection of domain names in India has been seen as the need of the hour and has also been approved by many law courts of the country, provided that the proposed domain name fulfils all requirements by the law to be properly registered under the Indian trademark law. Anyone may obtain protection for his/her/its newly created domain name in the entire region/ territory of India under the Trade Marks Act of 1999 and the Trade Marks Rules of 2017.

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ACQUISITION OF RELATED TRADEMARK

The primary and most prominent source of law governing the rules and regulations regarding trademarks in India is the Trade Marks Act, 1999, the Trade Marks Rule, 2017 they form the basis of the regulatory regime of trademarks in India.

Other than the said statute, any official guidelines or notices issued by the Office of the Controller General of Patents, Designs and Trade Marks (CGPDTM), like the Trade Marks Manual, govern several aspects of trademark law.

Other than these, other sources regulating the trademark rights in India include:

1. Various international multilateral conventions, such as the Paris Convention;
2. National bilateral treaties signed by the government of India;
3. Regional treaties Signed between state governments;
4. Court decisions that are given by the supreme court or various other courts or tribunals working in India;
5. Commentaries on the subject written by academicians, jurists and experts.

The categories of trademarks that can be registered according to the rules and regulations in India include the following:

1. any name which is not unusual for the trader to adopt as a mark to trade some goods or services in the market;
2. an invented word or any arbitrary dictionary word or words, which are not directly descriptive of the character or quality of the goods/service;
3. letters or numerals or any combination;
4. devices, including fancy devices or symbols;
5. Monograms etc.

Sections 29 and 30 of the Trade Marks Act, 1999 deals with the infringement cases of trademarks and takes necessary action as a remedy against unlawful and unauthorised use of a registered trademark. The doctrine of dilution provides with more powers to the owner of a rightfully registered trademark. According to the Section 29(4) of the Trademarks act, 1999 a remedy is provided which is independent of the infringement action, which allows the owner of the rightfully registered trademark with appropriate authority to claim for any civil, criminal or administrative remedies. This doctrine of dilution also works at the complete discretion of the courts and according to the various guidelines and tests set by the courts.

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BY- GAURAV GUPTA