"SENSEX" Challenged in a domain name dispute

The case filed by a Stock market analyst Mr Deepak Manohar Mohoni on Bombay Stock Exchange (BSE) challenging the trade mark application of BSE in Mumbai has attracted a nationwide attention rising several issues on trade mark rights. Mr Mohoni has contended that he was the original user of the term "SENSEX" and if any rights are claimed on the term it should belong to him. On the other hand, BSE contends that it has a "Trade Mark Right" on the term "SENSEX" and  in support of its contention claims that it has already obtained a trade mark registration in USA.

We are all aware that BSE is a large organization with a huge financial resource to fight its case upto the highest Court in the country if required. At the same time we are not sure if Mr Mohoni has the resources to pursue the case till the last resort. There is therefore a danger of the case getting decided in favour of money power than the merits of the case.

We  therefore feel that right thinking persons have a special role in supporting the cause of Mr Mohoni so that BSE is not allowed to bulldoze its claim using its financial clout, deep pockets and ability to fight a prolonged legal battle.

Naavi.org as a crusader of the cause of the e-downtrodden requests support from the media and other quarters for Mr Mohoni who has on record stated "... he does not have a problem with anyone using the term, as long as no one claims exclusive rights to it.".

Recently, when Naavi had to take up a defense on behalf of a domain name registrant who had registered a domain name "sensex.in" against an arbitration complaint raised by BSE, it was found that BSE had withheld several vital facts from the arbitrator which could have affected its claims adversely in the arbitration. It had also not revealed the existence of the objection raised by Mr Mohoni to the trade mark application. It was through an RTI application that we were able to get this information and include it in the defense. Now we are sceptical about BSE being truthful in its submissions to the Court in the present dispute with Mr Mohoni and hence it is necessary for us to place on record some of the information we had gathered during the arbitration defense so that BSE is not able to mis-represent facts.

The claim of BSE's move to claim exclusive rights on the term "SENSEX"  needs to be opposed for various reasons including the following;

1. SENSEX is not a term which is eligible for Trade Mark Registration

a) “SENSEX” can neither be considered as a “Product” or a “Service” of the BSE.

b) SENSEX cannot be considered as an indicator of the quality of the service rendered by the BSE.

c) The continuous use of SENSEX by the BSE is not unique.

d)  SENSEX is a factual position of the share trading information created out of the activities of the public in buying or selling shares, using a publicly available formula.

e)  The designing of the formula for calculating SENSEX is not based on any proprietary Intellectual Property of the BSE but on the scientific principles of how “Market Capitalization has to be adjusted through weightages for facts such as the number of shares of a company available for trading at a point of time compared to a base time. It is used by several other stock exchanges also. The choice of the 30 shares out of the 5000 available shares is a decision based on the well known ABC principle of management since these select shares contribute to the significant part of the market capitalization and for active trading.

f)  It is for this reason that if public buy the shares of an index company at a rate less than what they were willing to buy on the previous day, the SENSEX goes down. If there is more money available in the market and the investors decide to buy a share at a price higher than earlier, the SENSEX goes up. This is more a reflection of the investor sentiments and not a reflection of the quality of service of BSE. SENSEX does not indicate how good or bad the service of Bombay Stock Exchange is but only tells how investors are feeling about investing or not investing in a given group of share

g) According to the admissions of BSE  on  their website under  the heading “SENSEX, the Barometer of Indian Capital Markets”

i) “…SENSEX is scientifically designed … based on globally accepted construction and review methodology”
ii) SENSEX is regarded to be the pulse of the Indian stock market
 

h) This nature of SENSEX as a mathematical calculation based on facts which are in public domain and it not being a “Distinguishing indicator of the quality of the service of the BSE” makes it in-eligible for consideration as a trademark or a service mark or for establishing the rights over its use by any member of public including the respondent.

i)  As indicated by the BSE himself in his website, it is accepted that “SENSEX is considered as a barometer of the Indian Capital markets”. The facts about how SENSEX responds to global economic developments such as “Changes in the Crude Oil Prices”, “US Sub Prime Crisis”, “Indian National Budget proposals” or Political developments such as “Whether Senator Obama will be the democratic candidate in US presidential elections” or “Whether Indian Parliament will be dissolved ahead of its term” are well documented by the press.

j) SENSEX is also subject to  the universally accepted concept of “Genericized Trademarks” .  Genericized trademark is a trademark which has come to be used to describe all similar products, rather than the product of a specific manufacturer. Some well known examples of genericized trademarks include kleenex, kotex, xerox, aspirin, heroin, crock pot, hoover, scotch tape, and rolodex. All of these names are used generically to describe particular products, despite the fact that they were once trademarked, and in some cases still are trademarked.

m) By law, if a company does not take action to protect a product from genericization, it may lose its trademark.

n) The word “SENSEX” has assumed the specific meaning of an “Indicator of Stock market status” in general and is no longer considered only to describe the movements of the 30 shares of the Bombay Stock Exchange used for computing the SENSEX. In the specialized segments where the specific reference is required, the term BSE-SENSEX is used instead of the mere word SENSEX to distinguish between the BSE related index and the reflection of the capital market situation in India.

o) The Concept of “Genericized Trademark” is reiterated in the Indian Trademark Act 1999 under Section 9.1 (c ) which states as follows:

The Trade marks… “which consist exclusively of marks or indications which have become customary in the current language or in the bona fide and established practices of the trade,”..shall not be registered

The word “SENSEX” has acquired the character of a “Genericized Trademark” and no trademark right can be recognized there in.

 Issue 2 : Registration of US Trademark

i. The BSE has indicated that a trademark (Service Mark) registration has been obtained in USA for the mark “SENSEX” under the classes 16 and 36.

ii. Class 16 of the US Trademark Registration refers to “Publications regarding the financial and investment industries, namely periodicals, manuals, brochures, pamphlets and books”.

iii. Class 36 of the US Trademark registration refers to the “Securities and Exchange Services, Securities brokerage services, providing financial and investment information and securities trading services via telephone wireless communications and the Internet.

iv. The BSE does not have any product or service under the classification in the exclusive name of “SENSEX” either prior to the granting of the trademark or subsequently.

v. While it is conceded that BSE has been using the term SENSEX since a long time, it has been used frequently as BSE-SENSEX. Whenever the word is used simply as SENSEX, the objective has been to reflect the general health of the capital market in India.

vii. BSE has no right on the term SENSEX as either a trademark or a service mark either in US or elsewhere not withstanding the claimed registration which could be challenged in the appropriate forum.

viii. It is also noted that the trademark registration in USA was obtained by Bombay Stock Exchange, (Association of Persons) which is an entity different from the current status of the BSE.

x. The BSE has not recognized  SENSEX as a trademark in their books and there is no mention about the same either in the balance sheet of 19th August 2005 (after the change of status of BSE)  nor the balance sheet for the year 2006-2007. No income has been shown in the books of Bombay Stock Exchange Ltd under  "Trademark" though it is clear that SENSEX was being used by several players in the market to represent the status of the capital markets in India.

xi. In the absence of  appropriate legal transfer of the rights owned by the erstwhile Association of Persons on the US Trademark registration, the rights of the BSE on the trademark is not adequately substantiated.

xiii) As per the current status of the trademark in the registers of the US Trademark office, the registration stands in the name of Bombay Stock Exchange (Association of Persons).

xiv)  According to Rule 2.171 (a) of the U. S. TRADEMARK LAW RULES OF PRACTICE & FEDERAL STATUTES, U. S. PATENT & TRADEMARK OFFICE (November 1, 2007)

“If the ownership of a registered mark changes, the assignee may request that a new certificate of registration be issued in the name of the assignee for the unexpired part of the original period.  The assignment must be recorded in the Office, and the request for the new certificate must be signed by the assignee and accompanied by the fee required by §2.6(a)(8).  If available, the original certificate of registration must be submitted.

xv). In the absence of the recording of the change of ownership with the US Trademark office, the trademark registration in USA is not binding on third parties and  BSE does not have any rights which can be rightfully claimed by a registrant of a US Trademark.

 Issue 3: Public Interest:

i. Every law that is aimed at protecting the rights under the category of intellectual properties has an in built provision to protect the interests of the public.

ii. The “Fairuse” concept of copyright law, the “Compulsory Licensing” of the Patent law and the “Absolute Grounds for Refusal” in the Trademark law are examples of this importance accorded by law to the public interest. It is necessary to consider this aspect also in resolving this dispute.

iii. From the indications provided in the Business Standard report of 17th December 2006 (where BSE has claimed that they would be charging royalty for the use of the world SENSEX)  it is clear that the public interest in using the term SENSEX for reporting and equity analysis is seriously threatened by the attitude of the BSE.

 

BSE should be prevented from unduly restricting the market by extending his claimed right on the word “SENSEX” on the use of the term by others.

Naavi.org therefore supports Mr Mohoni in his challenge of Trademark rights for BSE.

[P.S: This is not a reproduction of the defense in domain name dispute regarding sensex.in]