Use in commerce

Overview

Use of another's same or similar trademark in a domain name can subject the domain name owner to liability for federal trademark infringement or dilution under the Lanham Act depending on the content of the corresponding website. There is no liability, however, unless the domain name owner has "used" another's trademark "in commerce." This entry discusses some "use in commerce" issues that have arisen in the context of using a third party's mark in a domain name.

Trademark infringement occurs when the defendant uses in commerce another's mark, without consent, in connection with the sale, offering for sale, distribution or advertising of any good or service, where such use of the mark is likely to cause confusion, mistake or deception.

The term use in commerce refers to the bona fide use of a trademark or service mark in either interstate or foreign commerce in the ordinary course of trade. The Lanham Act (U.S. trademark law) provides that:

a mark shall be deemed to be in use in commerce —

(1) on goods when —

(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

(B) the goods are sold or transported in commerce, and

(2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.”

For goods, the mark must appear on the goods, the container for the goods, or displays associated with the goods, and the goods must be sold or transported in commerce.

For services, the mark must be used or displayed in the sale or advertising of the services, and the services must be rendered in commerce.

Nominal use made merely to reserve a right in a mark does not qualify. Use of the mark in advertising or promotional materials before the product or service is actually provided under the mark is also not "use in commerce." And, mere registration of a domain name is not considered a use in commerce.

 

 Trademark dilution claims also require use of another's mark in commerce.  In order to state a federal trademark dilution claim, the plaintiff must show that its mark is famous and that after it became famous, the defendant made "commercial" "use" of the mark "in commerce" which dilutes the mark's quality.  Some courts have interpreted the addition of the term "commercial" in the dilution statute to be "roughly analogous" or "virtually synonymous" with the "in connection with the sale of goods and services" definition for "use in commerce" under infringement.

Note Regarding Jurisdictional Predicate

Congress' power to enact trademark laws is derived from the Commerce Clause.  Some courts construe the "use in commerce" requirement references in the Lanham Act to be coextensive with Congress' broad power under the Commerce Clause.  Other courts have held that this approach is erroneous because it ignores the specific definition of "use in commerce" in the Lanham Act.  This has resulted in some uncertainty regarding whether a domain name and its corresponding website satisfies "use in commerce" for federal trademark infringement and dilution actions.

"Use in Commerce" Issues for Domain Names Incorporating Another's Trademark

Owners of domain names incorporating a third party's trademark can be liable for trademark infringement or dilution if the domain name meets the "use in commerce" requirement.  This is because domain names are like trade names and can function as trademarks, and, therefore may infringe trademark rights.  In applying the "use in commerce" requirement as defined in the Lanham Act, the inquiry is whether the alleged infringe used another mark in commerce and "in connection with a sale of goods or services," or commercial use of the other's mark was made in commerce.

Domain names and corresponding websites continue to present "use in commerce" issues for federal trademark infringement and dilution actions, sometimes with inconsistent results.  

1.  Mere Registration of Domain Name Does Not Constitute "Use in Commerce"

It has consistently been held that mere registration of a domain name incorporating a trademark cannot constitute "use in commerce" under the Lanham Act.  This is because the purpose of a mark is to help consumers identify a source, and this function is non-existent until the mark has been used in public so as to create an association among consumers between the mark and its owner.

What might be required more than registration, however, has not been so easy to define.  "Domain names present a special problem under the Lanham Act because they are used for both a non-trademark technical purpose, to designate a set of computers on the Internet, and for trademark purposes, to identify an Internet user who offers goods or services on the Internet."  The focus turns on whether there is an operable website being used on the Internet, and what kind of content is on that website.

2.  Domain Name Website Content Factors for "Use in Commerce" Requirement

The "use in commerce" requirement is easily met where one's trademark is being used as the domain name for a competitor's website, assuming the competitor website sells the same or similar goods or services.  Where a domain name incorporating a third party's same or similar trademark is being used in connection with a competitor's commercial website, the trademark is being used in commerce within the meaning of the Lanham Act.

On the other hand, where a domain name incorporating another's trademark and the corresponding website is not used to sell or advertise any goods or services, some court have held that there is no "use in commerce" and an action under the Lanham Act should fail for that reason.  However, some courts have employed an "expansive" view holding that the "use in commerce" requirement is satisfied even if the corresponding website content somehow affects commerce, even if that websit itself does not sell or advertise goods or services.

The use of a third-party trademark in a domain name of a non-commercial commentary, critcism or parody website has been held to not constitute "use in commerce" under the Lanham Act.  For example, in Bosley Medical Institute v. Kremer, the Ninth Circuit held that use of another's trademark in a domain name of a consumer commentary website did not satisfy the "use in commerce" requirement.  Similarly, in TMI, Inc. v. Maxwell, the Fifth Circuit held that trendmakerhome.com's criticism of the owner of TREND MAKER HOMES registered mark, was non-commercial use under the Lanham Act.  Notable to these conclusions were the facts that the websites did not offer goods/services for sale, generated no advertising or other revenues and had no direct links to commercial websites.  Thus, "cybergripe" and other purely non-commercial websites incorporating others' trademarks in their domain names fail to meet the "use in commerce" requirement under the Lanham Act, even if such use of the mark might deter customers from reaching the trademark owner's website.

However, while trademark law distinguishes commercial and non-commercial activity, the courts have disgreed on how on-line content falls into these categories.  In some instances, courts have interpreted the use of a mark "in connection with the sale of goods or services" language broadly, and have sometimes ignored the definition in section 45 altogether, to find that domain names and corresponding websites are used in commerce even if the website does not sell goods or services.

Under the "broad" approach, if the website content somehow affects commerce (e.g., including mere "plugs" for another), or affects the commercial value of the other's mark or the owner's interstate activities, some courts have found the "use in commerce" requirement satisfied for Lanham Act purposes.  Other courts have rejected this "expansive" approach.

This tension has arisen, for example, in the context of hyperlinks to non-commercial websites.  Links from a non-commercial website to a commercial website have been held to satisfy the "use in commerce" requirement.  Thus, where a website operator uses another's trademark in a domain name used for a parody of the mark, or to "cybegripe" about the mark's owner, this use loses its non-commercial status if the website contains hyperlinks to commercial websites.  Expanding on this reasoning, some courts have held that if hyperlinks or other webite content somehow affects commerce, the commercial use requirement is met.