Category: Cybersquatting

Lennar Pacific Properties Management, Inc. v. Dauben, Inc., No. 07-1411, 2007 WL 2340487 (N.D.Tex. August 16, 2007)

Companies sometimes find that opportunistic purchasers of domain names (often referred to as “domainers”), will purchase a domain name quite similar to that of the company, and establish a site at the URL loaded with revenue-generating sponsored ads. To accomplish these purposes, domainers seem to prefer the services of companies like HitFarm and Domain Sponsor. A web user types in the confusingly similar URL and is bombarded with pop-up ads and sponsored links to goods and services, often competitive to the company whose name or trademark is being appropriated in the URL.

The Lennar Corporation, an established home builder, noticed that a company called Dauben, Inc., d/b/a “Texas International Property Associates,” set up a HitFarm site at mylennar.com. Dauben’s page purported to feature “resources and information on Floor plans and Building construction.” It also contained a link titled “Home building,” which when clicked on, took the user to another page of sponsored links to homebuilders competitive to Lennar.

Lennar filed suit for trademark infringement in Texas federal court, and sought injunctive relief. The court granted the motion for temporary restraining order, prohibiting the defendant from using, canceling or transferring the domain name to any person or entity other than Lennar, and from using any domain name that incorporated or was confusingly similar to the Lennar mark.

The court held (1) there was a substantial likelihood of Lennar’s success on the merits of the trademark claim; (2) there was a substantial threat that Lennar would suffer irreparable injury if the injunction was denied; (3) the threatened injury outweighed any damage that the injunction might cause Dauben; and (4) granting the injunction would not disserve the public interest.

It looks like this Texas International Property Associates has targeted other companies in the past, and has come up empty handed. See, e.g., this WIPO opinion, in which Fry’s Electronics wrestled to get the typo-squatted domain name “fyrselectronics.com”.

Decision appears below (click through if it’s not showing up in the RSS feed):

Ex parte temporary restraining order issued against operator of northwestdiscountcoupons.com

Northwest Airlines gives away “e-Certificates” to passengers who experience flight delays, cancellations, or other inconveniences. These e-Certificates are redeemable for significant discounts on future ticket purchases. Passengers redeem e-Certificates by visiting Northwest’s website and entering the unique coupon number appearing on the face of each e-Certificate. Until recently, passengers were allowed to give away their e-Certificates to others, but were not permitted to sell them.

In the course of investigating the unauthorized sale of e-Certificates on sites like eBay and Craigslist, a Northwest employee discovered the site northwestdiscountcoupons.com, allegedly operated by one Mike Bauer. To confirm its suspicions, Northwest had one of its interns purchase a number of e-Certificates from the site.

Northwest filed suit against Bauer alleging a number of causes of action, including false advertising, tortious interference, cybersquatting, and trademark infringement. It sought an ex parte temporary restraining order against Bauer. The U.S. District Court for the District of North Dakota granted the motion.

Northwest asserted that two independent causes of action entitled it to injunctive relief. First, it argued that Bauer’s misleading use of the NORTHWEST mark violated the Lanham Act and caused continual and irreparable damage to the value and trust Northwest had cultivated in its name and mark. Second, Northwest argued that Bauer’s alleged illegal and fraudulent sale of e-Certificates to unknown and unsuspecting customers was a violation of public trust that could not be permitted to continue under North Dakota law.

The court went no further than analyzing the alleged violations of the Lanham Act to determine that the temporary retraining order was warranted.

It held that Northwest was likely to succeed on its trademark infringement claim, where, among other things, the defendant was alleged to have registered a domain name that was identical or confusingly similar to Northwest’s distinctive mark. On this point, the court cited to Green Products Co. v. Independence Corn By-Products Co., 992 F.Supp. 1070, 1076-77 (8th Cir.1997) and Faegre & Benson, LLP, v. Purdy, No. Civ. 03-6472 (MJD/JGL), 2004 WL 167570 (Jan. 5, 2004, D.Minn).

Further, citing to Coca-Cola Co. v. Purdy, [No. 02-1782 ADM/JGL, 2005 WL 212797 (Jan. 28, 2005, D.Minn)] the court found that “the nature of the Internet makes if unlikely that consumers can avoid confusion through the exercise of due care.”

Northwest Airlines, Inc. v. Bauer, (Slip Op.) 2006 WL 3733295 (D.N.D., December 15, 2006)

In the case of Lands’ End, Inc. v. Remy, the defendant website owners were accused of crafting a clever scheme to get some extra commissions from their affiliate relationship with landsend.com. It looks like the scheme has backfired, however, as Lands’ End’s claim against the defendants under the Anticybersquatting Consumer Protection Act, [15 U.S.C. §1125(d)] (“ACPA”) has survived a summary judgment motion and the case is heading for trial.

Lands’ End operates an affiliate program that allows owners of approved websites to put up links to landsend.com. If a visitor to one of those approved websites clicks on the link and ends up buying something at the Lands’ End site, the affiliate website owner gets a 5% commission. The defendants in this case signed their websites up to be affiliates, and were approved.

In the process of signing up to become affiliates, however, the defendants only disclosed the URLs of their legitimate websites, e.g., savingsfinder.com. They did not tell Lands’ End that they also owned other domains like lnadsend.com and landswnd.com.

The defendants set up these other domain names so that if an Internet user accidentally typed one of them into a web browser, he or she would be automatically and invisibly redirected to the Lands’ End site. If one of those typosquatting victims purchased something at landsend.com, the defendants would pick up a commission.

The redirect only worked the first time a user would mistype the domain name. Perhaps to avoid detection, the defendants set up the redirect so that if a user typed the wrong domain name again, a 404 error would appear. (“Oh, I guess it was just a fluke.”)

After it noticed the defendants’ setup, Lands’ End filed suit alleging, among other things, violation of the ACPA. The defendants moved for summary judgment, arguing that there was no showing of bad faith. After all, the defendants argued, their scheme had sent visitors to the Lands’ End site, not diverted them away.

The court rejected the defendants’ argument and denied the motion for summary judgment as to the ACPA claim. It held that Lands’ End adduced substantial evidence to show that the defendants exploited the Lands’ End trademark to get commissions to which they were not entitled. Accordingly, the question of bad faith should ultimately be left up to the finder of fact.

Lands’ End, Inc. v. Remy, — F.Supp.2d —-, 2006 WL 2521321 (W.D. Wis., September 1, 2006).

This entry originally posted by Evan Brown at InternetCases.com.

Virginia federal court reads publication requirement for in rem jurisdiction under ACPA.

Investools, Inc. recently filed an in rem domain name proceeding against a Canadian entity that registered the domain names investtools.com and investtool.com. In rem domain name proceedings are provided for under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. 1125(d), and are a handy way for a trademark owner to acquire a domain name from a cybersquatter when the cybersquatter can’t be found e.g., is located outside the U.S. [More on in rem proceedings.]

The ACPA requires that a plaintiff demonstrate four things to establish in rem jurisdiction over a domain name.

— First, the plaintiff must show that subject matter jurisdiction is proper in the district where the action is brought. Since the ACPA provides for jurisdiction in the judicial district in which the domain name registry is located, actions involving .com domain names will be proper in the Eastern District of Virginia for at least as long as Verisign is located there.

— Second, a plaintiff must establish that it is unable to obtain in personam jurisdiction over the defendant where the suit is brought. This is usually pretty easy to do where the registrant is a foreign entity with no ties to the U.S.

— Third, the plaintiff must show that it has perfected service of process as described by the ACPA. Under 15 U.S.C. §1125(d)(2)(A)(ii)(II), this involves:

(aa) sending a notice of the alleged violation and intent to proceed under this paragraph to the registrant of the domain name at the postal and e-mail address provided by the registrant to the registrar; and

(bb) publishing notice of the action as the court may direct promptly after filing the action.

(It is on this third point that the court made the important ruling in this case. We’ll come back to take a closer look at that after laying out the fourth element.)

— Fourth, a plaintiff must establish the elements of trademark infringement or trademark dilution.

In this case, the court held that Investools had satisfied the first, second and fourth elements for establishing in rem jurisdiction. It would not award summary judgment, however, because of a failure to meet the two-step third element.

Although Investools had sent notice by mailing and emailing the complaint to the listed registrant, it had not published notice of the action as provided for in (bb).

And why should it have? Nothing in the case indicates the court had directed that any publication occur. Apparently, the plaintiff was supposed to have interpreted the case of Cable News Network L.P., L.L.L.P., v. CNNews.com, 177 F.Supp.2d 506 (E.D.Va. 2001) to stand for some permanent order that publication is required in every in rem case.

One could reasonably disagree with the court’s determination that (bb) requires filing in every case. A perfectly sensible interpretation would be that it is required only in those particular actions where the court specifically directs it. But that is not the way the Eastern District of Virginia reads it, and it looks like an in rem plaintiff must publish notice of the action regardless of whether it’s specifically ordered to do so.

Investools, Inc. v. investtools.com, (Slip Op.) 2006 WL 2037577 (July 17, 2006).

Think about how you would answer this question:

Your friend wants to use your car so that he can do his job of delivering pizza. The two of you work out a deal where he can drive the car, on the condition that at the end of each week he will pay you 5% of the tips he collects from his job. Things go as planned for awhile, with your friend paying the agreed upon percentage. After a few weeks, however, he stops paying.

Would he be authorized to keep using the car?

If you answered “no,” then you may disagree with the reasoning of the U.S. District Court for the Northern District of California in the recent case of Fox v. iVillage.

Plaintiffs, who had previously licensed their trademark to defendants in return for the payment of a 5% royalty rate, filed suit in federal court alleging, among other things, violation of the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. 1125(d). Defendants moved to dismiss for lack of subject matter jurisdiction, and the court granted the motion. It found that the case presented merely “a state law contract dispute, not one involving substantive questions of federal law.”

The court ruled that the only dispute between the parties was over the nonpayment of the agreed-upon royalty. Because defendants had been authorized to use plaintiffs’ trademark, the court held, there could be no bad faith intent to profit from the mark. Accordingly, without a valid claim under the ACPA, there was no federal question, and the court was without subject matter jurisdiction.

Reasonable minds may differ as to whether this holding was correct. Doesn’t it seem that if the royalties weren’t being paid, then the use of the trademark was not, as the court concluded, authorized? In other words, wasn’t payment of royalties a necessary condition of authorization? To bring it under the language of the ACPA, doesn’t it seem like continuing to use a trademark as a domain name without paying for it would be in bad faith? Wouldn’t your friend’s continued use of your car be bad faith on his part?

Fox v. iVillage, 2005 WL 3157413 (N.D. Cal., November 23, 2005).

An arbitration panel of the World Intellectual Property Organization has decided 2-1 in favor of Complainant Boca Raton Resort & Club in an action under the Uniform Domain Name Dispute Resolution Policy over the domain name bocaresorts.com.

In 1995, the Complainant registered the domain name bocaresort.com for use in connection with resort facilities it maintains in Boca Raton, Florida. In 2002, Respondent GNO, Inc. registered bocaresorts.com to develop a website providing links for media, travel, fishing, events and real estate which are “under development”. Complainant asserted that Respondent’s use of the similar domain name was likely to cause confusion, that Respondent had no legitimate rights in the domain name, and that the domain name had been registered in bad faith.

Respondent argued that it did not register the domain name in bad faith because it believed the domain name to be descriptive of resorts in a resort city. Given such descriptiveness, Respondent argued, it had no predatory intent in registering the domain name. In analyzing the element of bad faith, the majority of the Panel concluded that the Respondent “knew, or should have known, about Complainant’s ‘www.bocaresort.com’ website and that he pluralized that name to benefit from web traffic generated by unsuspecting potential users of Complainant’s website.”

The Presiding Panelist, Dennis Foster, disagreed with the majority’s conclusion, and issued a dissent that addressed the issue of bad faith. Foster asserted that the Respondent was “entitled to believe that the phrase ‘Boca Resorts’ is geographically descriptive and means resorts in the city of Boca Raton, Florida, which is primarily a city full of resorts catering to a public seeking leisure.” He compared it to other activities of well-known cities:

“It is comparable to trying to claim to have become ‘the Vegas casino’ in Las Vegas or ‘the Washington, D.C. lobbyist’. These are all common geographically descriptive terms that the public, in good faith, is entitled to believe are free for all to use because they describe goods or services found in abundance from many providers in the named city.”

Panthers BRHC L.L.C. v. Gregg Ostrick/GNO, Inc., Case No. D2005-0681 (September 1, 2005).

Court expresses doubt over personal jurisdiction, likelihood of success on merits.

On July 28, 2005, an employee of the well-known doll maker American Girl accidentally discovered that the domain name amercangirl.com had been registered and was being used for links to pornographic and other adult content. Understandably upset by this act of apparent “typosquatting,” American Girl filed suit in federal court in Wisconsin against the domain name registrar Nameview, and the unknown “John Doe” registrant, alleging violation of the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d). American Girl sought an ex parte temporary restraining order against the use of the domain name, asking that the domain name be disabled and transferred.

The court denied ex parte injunctive relief. It noted first that it was “uncertain whether [it had] personal jurisdiction over either defendant.” Without such jurisdiction, the court could not enter such an in personam restraint against the defendants. The lack of personal jurisdiction was evident: the John Doe defendant’s only contact with the forum was its “passive” website. Nameview’s website was more interactive, but there was nothing in the record to show that it had “purposefully availed” itself to Wisconsin law by registering a domain name for anyone in the state.

Even if American Girl had established that the court could exercise personal jurisdiction over the defendants, it noted that there was no likelihood of success in an action against Nameview. It held that “[a] registrar who simply accepts the registration of a domain name generally is not liable for . . . violations of the ACPA.” By simply registering the domain name, and not engaging in “collusion, or some other affirmative malfeasance,” Nameview would not be liable for unlawful typosquatting.

After denying American Girl’s request for an ex parte restraining order, the court generously offered the advice of filing an in rem proceeding pursuant to 15 U.S.C. §1125(d)(2)(A) in the home district of either Nameview or Verisign, the registry for the .com TLD. The court suggested that such a proceeding might be appropriate in a situation such as this, where there would be apparent difficulty in getting personal jurisdiction over the unknown defendant John Doe.

American Girl, LLC v. Nameview, Inc., — F.Supp.2d —-, 2005 WL 1939834 (E.D.Wis., August 9, 2005).