The role of Internet in trade and commerce, not only as a medium for doing business and increasing outreach but also as a platform for promoting brands, cannot be underestimated in today’s reality of the virtual world. It follows that domain names assume great importance in the world of brands and, consequently, in the contours of trade mark law.

Being a common law country, an aspect that centres around trade mark protection in India is its “use”. It is uncontentious that the incorporation of a trade mark as part of a domain name that resolves to an active website constitutes use of the mark under Indian law. Does the same, however, hold true even if the domain name in question is parked?

Domain name parking occurs when a domain name registrant deposits its domain name with a registrar or parking service provider who creates placeholder pages, as opposed to a fully functional and developed website.[1] In other words, the practice of a person or entity getting a domain name registration and simply holding it in his/her/its name, to the exclusion of others, without pointing it to an active website, is called ‘domain name parking’. While it is settled law that registration and use of a domain name which incorporates a mark identical or deceptively similar to someone else’s trade mark, can injure the rights of the owner of such a mark[2], this article aims to explore whether mere parking of a domain by the owner of a trade mark qualifies as “use” of the mark incorporated in the domain name.

Use” of a Mark: Interpreting the relevant provisions of law in India and the US

India

In India, Section 2(2)(c)(i) and (ii) of the Trade Marks Act, 1999 (hereinafter the “TM Act”) defines use of a mark as follows:

“Unless the context otherwise requires, any reference to the use of a mark

(i) in relation to goods, shall be construed as a reference to the use of the mark upon, or in any physical or in any other relation whatsoever, to such goods;

(ii) in relation to services, shall be construed as a reference to the use of the mark as or as part of any statement about the availability, provision or performance of such services.”

The wording “in any other relation whatsoever” opens the above definition to wide interpretation. Indian courts, in numerous cases[3], have held that ‘use’ does not necessarily mean and imply actual physical sale; even mere advertisement without having even the existence of the goods can be said to be a ‘use’ of the mark.[4] Thus, the interpretation of ‘use’ of a mark, in India, as noted above, is wide enough to include advertisement and promotional activities within its ambit, without requiring actual physical use of the mark on goods. The above interpretation broadens the scope of trade mark protection to instances of use which may not essentially constitute use of a mark on the concerned goods in the literal/physical sense.

The ambit of trade mark protection in India, however, does not extend to a scenario where there is no bona fide intention to use the mark on or in relation to the concerned goods or services. In the case of Vishnudas v. The Vazir Sultan Tobaco Ltd.,[5] the Hon’ble Supreme Court of India held that, if a trader has no bona fide intention to trade in certain goods, he should not be permitted to enjoy monopoly over the trade mark in respect of those goods even if the trader owns a trade mark registration for a broad specification of goods covering those goods. Further. in the case of Unichem Laboratories Ltd. v. Ipca Laboraties & Ors.[6], it was held that “no court of law allows anybody to corner or traffic any trade mark with bare registration without bona fide intention to use”.[7]

From these cases, it is clear that mere registration of a trade mark, devoid of any bona fide intention to use it in respect of the goods and services covered by the registration, does not entitle the registrant to enjoy monopoly over the trade mark in respect of those goods and services.

The United States

In the United States, the understanding of use of a mark, embodied in the definition of “use in commerce”, is more expressly subject to a qualification that such use be commercial in nature. §1127 of the Lanham Act, 1946[8] defines “use in commerce” as only ‘bona fide use made in the ordinary course of trade, and not made merely to reserve a right in a mark.’ It follows that use of a trade mark is not bona fide if the underlying transactions are not genuinely commercial.[9]

Token Use

The term “token use” refers to uses of a trade mark that are purely for the purpose of securing rights in a mark, as opposed to use in furtherance of any true interest in or expectation of making commercial sales.[10]

In Laboratoire De La Mer Trade Marks[11], the question for determination before the court was, what amount of use was required to prove that the mark was put to genuine use. It was held that, if the use was only slight, depending on circumstances, it might show that the trader was not genuine in its activities. If the main or principal motive was trade mark protection, rather than making sales under the marks, the use was not bona fide. The trade mark owner should demonstrate that use was not merely “colourable” or “token” but bona fide use of a mark in the ordinary course of trade.

All in all, it is apparent that use of a mark must be a bona fide one, and not a token or colourable one, merely to gain protection under trade mark law, in order for it to enjoy protection under the US trade mark law regime.

Commercial Magnetism

To support the contention that “use” must be a bona fide use or use in commerce, the doctrine of ‘commercial magnetism’ deserves a mention.

The doctrinal expression of the “commercial magnetism” principle underlying all of trade mark law is the requirement that a trade mark be used in commerce. This requirement permeates all facets of common law trade mark law and of the Lanham Act, and it holds that any conduct to which trade mark law is to apply must involve the use of a symbol in a way that consumers can perceive the symbol so that it can exert its commercial magnetism on them. The logic behind the requirement is simple: without use of a symbol, consumers cannot perceive it; without consumer perception, the symbol cannot exert whatever commercial magnetism it may have over consumers; without commercial magnetism, the symbol does not function as a trade mark.[12]

As per the doctrine of commercial magnetism, once the symbol is used in commerce, only then can there exist a “consumer attached to that trade mark” who can perceive the said mark. Once perceived, the mark can exert magnetism or attract the consumer towards the good(s) or service(s) that the mark pertains to. Simply put, the doctrine contends that a trade mark attains its identity only because of its perception, recognition and attractiveness to a consumer. In other words, a trade mark acts as a magnet to the consumer to buy a product. Undoubtedly, this utility of a trade mark can be said to be commercial in nature. It follows that “use” must be a bona fide use or a use in commerce to gain trade mark protection.

Analysis: Parked Domain Name

As noted above, a parked domain name is a registered domain name that is not linked to a website or email hosting service.[13] In simpler words, a parked domain is just a name/address on the Internet owned by an individual or an entity. This is akin to a situation where a trader obtains a trade mark registration without any bona fide intention to use the trade mark. In such a situation[14], where apart from registration of domain name, no substantial steps are undertaken towards commercial use of the mark,[15] monopoly over the said parked domain name should not result in the registrant claiming exclusivity over the said domain name or trade marks identical or deceptively similar to the said domain name.

Considering both sub clauses of Section 2(2)(c) the TM Act mention “in relation to goods/services”, in order to constitute ‘use’ within the definitions provided under these provisions, there must be a connection between the instances of use of the mark being relied on, and the goods or services on or in relation to which such use is sought to be established.  Clearly, mere parking of a domain name fails to establish any such connection with the goods or services. Hence, merely parking a domain name would not qualify the definition of “use” of a mark under the TM Act.

Thus, a parked domain can, at the most, be understood to be a token use, as opposed to a commercial one. Since a parked domain is not connected to any website or hosting service, thereby lacking any connection with goods or services, the requirements of ‘commercial magnetism’ cannot be said to be met. Further, no consumer can be said to be visiting the parked domain for any commercial reason.

Conclusion

In view of the above, unless proven otherwise, mere parking of a domain name should not fulfil the criterion of bona fide use of the trade mark it incorporates. Therefore, in order to secure rights in a trade mark, it must be used in a manner that it attracts commercial magnetism. Given this, in the authors’ opinion, mere parking of a domain name does not enable its registrant to claim ‘use’ of the trade mark it incorporates.

***

Sujata Chaudhri is the Founder, Owner and Managing Partner at Sujata Chaudhri IP Attorneys and specialises in IP litigation, enforcement, prosecution and transactions in the United States and India (particularly in the area of trade marks).

Deeksha Anand is a Principal Associate at Sujata Chaudhri IP Attorneys and specialises in trade mark and design prosecution, including prosecuting international applications filed through the World Intellectual Property Organization, and trademark opposition and cancellation actions.

Amay Jain works as an Associate at Victoriam Legalis Advocates & Solicitors, Mumbai.


[1] Elizabeth M. Flanagan, No Free Parking: Obtaining Relief from Trade mark Infringing Domain Name Parking, 2007 Minnesota Law Review (92) 498,

<https://www.minnesotalawreview.org/wp-content/uploads/2012/01/Flanagan_final.pdf >

[2] HT Media v. Brainlink International, Inc. CS COMM 119/2020, Delhi High Court; see also Maruti Udyog Limited. v. Maruti Software Private Limited Case No. D2000-1038, <https://www.wipo.int/amc/en/domains/decisions/html/2000/d2000-1038.html >

[3] J N Nicholas Ltd v Rose and Thistle AIR 1994 Cal 43, para 20; Hardie Trading Ltd. and Anr. V. Addisons Paint and Chemicals Ltd. 2003 Supp(3) SCR 686

[4] Thilini Kahandawaarachchi, A Study of Indian and US Trade mark Law Relating to the Effect of ‘Non-Use’ of a Trade mark, 2007 JIPRS (12) 236-243

[5] 1996 (16) PTC 512

[6] 2011 (45) PTC 488 (Bom)

[7] Unichem Laboratories Ltd. vs. Ipca Laboratories Ltd. and Ors., 2011 (45) PTC 488 (Bom)

[8] § 45 (15 U.S.C. § 1127), https://www.uspto.gov/sites/default/files/trade marks/law/Trade mark_Statutes.pdf (last accessed on 17/02/2020).

[9] Thilini Kahandawaarachchi, A Study of Indian and US Trade mark Law Relating to the Effect of ‘Non-Use’ of a Trade mark, 2007 JIPRS (12) 236-243

[10] Margeth Barrett, Finding Trade mark Use: The Historical Foundation for Limiting Infringement Liability to Uses “in the manner of a mark”, 2009 Wake Forest Law Review (43)954, < http://wakeforestlawreview.com/wp-content/uploads/2014/10/Barrett_LawReview_12.08.pdf >

[11] 2002 F.S.R. 51

[12]Uli Widmaier, “Use, Liability, and the Structure of Trade mark Law”, Hofsta Law Review(Volume 33 Issue 2), 2004, page 606, <https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?article=2433&context=hlr> (last accessed on 17/02/2020).

[13] Jamie, “What Is A Parked Domain? – Guide To Parked Domain Names”,

<https://makeawebsitehub.com/parked-domains/> (last accessed on 17/02/2020)

[14] Unichem Laboratories Ltd. vs. Ipca Laboratories Ltd. and Ors., 2011 (45) PTC 488 (Bom)

[15] Rajat Agarwal and Ors. v. Spartan Online Pvt. Ltd. and ORs. CS No. 35/2017, Calcutta High Court

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