Maruti.Com v. Maruti Udyog Ltd., 447 F.Supp.2d 494 (D. Md. 2006) (full-text).
Factual Background Edit
Plaintiff, a website developer, registered and used the domain name "maruti.com." Defendant, an Indian car manufacturer, sold cars in over 70 countries and registered the mark MARUTI in India and many other countries. However, defendant did not sell cars in the United States and never registered the mark in the United States. Defendant promoted its business at the website "marutidyog.com."
Plaintiff initially used the "maruti.com" site to post photos of a nephew named Maruti, but he later changed the site to a commercial search engine portal. Plaintiff had a history of registering trademark-related domain names and had lost several domain name disputes. Defendant filed a UDRP complaint and prevailed.
Trial Court Proceedings Edit
Plaintiff filed this action under 15 U.S.C. §1114(2)(D)(v) to stay the transfer of "maruti.com" to defendant and to declare his use of the domain name lawful. Defendant counterclaimed for cybersquatting under the ACPA. Plaintiff moved to dismiss the counterclaim on the ground that defendant had no rights to assert under the Lanham Act because it did not use the mark "in commerce." The court denied the motion without prejudice to filing a motion for summary judgment after discovery.
At the close of discovery, plaintiff filed a motion for partial summary judgment on defendant's counterclaim claiming that the ACPA did not protect defendant because defendant had not used its mark "in commerce" in the United States.
Despite plaintiff's attempt to sell the domain name to defendant for $480,000, and that plaintiff otherwise "appears to be a cybersquatter, with a history of registering websites containing the names of trademarked companies," the court granted defendant's motion. The court initially disposed of defendant's argument that the Lanham Act's "use in commerce" requirement does not apply to an ACPA claim, which was contrary to the Fourth Circuit's decision in Barcelona.com.
The court then turned to the critical issue of whether defendant used its mark "in commerce." The court noted the "territoriality principle" of trademark law under which trademark rights exist on a country-by-country basis and that "foreign use of a foreign trademark creates no rights under United States law." It also noted that "commerce under the Lanham Act is coterminous with that commerce which Congress may regulate under the Commerce Clause of the United States Constitution," which includes foreign trade. However, the foreign trade must "involve transactions between United States citizens and the subjects of a foreign nation" per the Fourth Circuit's decision in International Bancorp v. Societe Des Bains De Mer. Here, defendant did not ship any of its cars to the United States; all it could show was that two American embassies in Nepal and Bangladesh bought a total of three cars from defendant.
Moreover, although a few U.S. customers visited defendant's website and entered contact information, they could not buy a car and have it delivered to the United States. And while defendant conducted a joint venture with Ford in India to sell products in India and several U.S. companies considered investments in defendant, these relationships did not involve the sale or transport of goods in U.S. commerce.
Defendant also asserted the "famous marks doctrine," which purports to protect foreign marks without use or registration in the United States where the mark is so famous that another's use of the mark in the U.S. is likely to cause consumer confusion. The court decided not to apply this "controversial" doctrine, however, because the Fourth Circuit had never recognized it and because the only two courts recognizing the doctrine disagreed as to its requirements.
The Ninth Circuit in Grupo Gigante in 2004 established a two-part test requiring secondary meaning in the mark and evidence that a "substantial percentage of consumers in the relevant market is familiar with the foreign mark," but never reached a decision as it remanded the case for a ruling regarding the second part.
The District Court for the Southern District of New York in 2005 denied a motion to dismiss based on a recognition of the famous marks doctrine, but did not define the test. Even if the court applied the famous marks doctrine, however, it held that defendant failed to provide evidence establishing that MARUTI had gained secondary meaning in the United States. Defendant asserted that it had advertised in prominent newspapers and magazines with widespread circulation, but did not name them and offered no evidence of advertising in the United States.
Defendant also submitted one recent Wall Street Journal article mentioning defendant. This evidence, however, "fell far short of creating a genuine issue of material fact as to whether [defendant] has secondary meaning in the eyes of the American public." Finally, defendant argued that the Paris Convention, of which India and the United States are both members, "requires the Court to find that a famous mark triggers Lanham Act protection." The court declined to apply Article 6bis of the Paris Convention, however, because the Fourth Circuit has taken a narrow view of this provision, holding in Barcelona.com that "the principles of the Paris Convention do not exceed the rights conferred by the Lanham Act."
Ultimately, finding no theory upon which to grant standing to the defendant, and despite the "dubious propriety" of plaintiff's actions, the court held that defendant did not have standing to counterclaim under the ACPA. The court thus granted plaintiff's motion for partial summary judgment on defendant's ACPA counterclaim, and ordered plaintiff to file a motion for summary judgment on its claims under §1114(2)(D)(v). The court requested the parties to brief the law that the court should apply to §1114(2)(D)(v) and whether any equitable principles such as unclean hands apply.
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