Category: Cybersquatting

A recent decision by a federal court in Virginia illustrates some interesting legal issues that arise from the global nature of the domain name system. It also highlights a powerful mechanism under the Anticybersquatting Consumer Protection Act (“ACPA”) by which a plaintiff can proceed with a legal action to recover a domain name without regard to the court’s personal jurisdiction over the registrant.

In June of 2003, Junak Kwon registered the domain name nbcuniversal.com through a registrar in Korea. NBC Universal, Inc. filed suit in the U.S. District Court for the Eastern District of Virginia – the district in which the registry for the .COM TLD is located – to recover the domain name. NBC Universal alleged violation of the ACPA (15 U.S.C. §1125(d)), and alleged other claims under federal trademark law, namely, that Kwon’s registration of the domain name diluted NBC Universal’s mark.

NBC Universal’s lawsuit was an in rem action, a type of action provided for under 15 U.S.C. §1125(d)(2) which allows, under certain circumstances, a plaintiff to proceed directly against a domain name to enforce ownership rights in it. The court had allowed NBC Universal to proceed in this manner because it would not have been possible for the court to obtain personal jurisdiction over the registrant.

Kwon filed a motion to dismiss which presented three arguments, each of which the court rejected. First, Kwon argued that the court was without subject matter jurisdiction over the case. He contended that by filing a prior proceeding with the World Intellectual Property Organization (“WIPO”) pursuant to the Uniform Domain Name Dispute Resolution Policy (“UDRP”), NBC Universal had submitted to the jurisdiction of the legal system in Korea, where the domain name was registered.

In rejecting Kwon’s argument based on lack of subject matter jurisdiction, the court cited the case of Barcelona.com, Inc. v. Excelenstisimo Avuntamiento de Barcelona, 330 F.3d 617 (4th Cir. 2003), which held that arbitrating a dispute pursuant to the UDRP does not preclude a plaintiff form filing a civil suit, either before or after the arbitral proceeding. The court further noted that a plaintiff is not limited to bringing such an action in the jurisdiction to which it submits for purposes of the WIPO proceeding. Accordingly, the previous WIPO proceeding did not deprive the court of subject matter jurisdiction.

Kwon’s second argument was that the U.S. court should abstain from exercising jurisdiction over the matter, because Kwon had already filed an action in Korea challenging the WIPO panel’s ruling that was adverse to him. The court observed that abstention is only warranted in “extremely rare circumstances,” and concluded that such circumstances were not present in this situation. The court found that principles of international comity would not require the court to abstain, because the Korean court action had “not been initiated in any meaningful sense.” The defendant had not yet been served with process, and the Korean action was an in personam action against NBC Universal (as opposed to an in rem action against the domain name itself, as this case was).

Kwon’s third argument was that the in rem provisions found at 15 U.S.C. §1125(c)(2) provided for such an action only over cybersquatting claims. Therefore, Kwon argued, adjudication of NBC Universal’s dilution claim would require the court to acquire personal jurisdiction over him, and both sides had agreed that the court could not acquire personal jurisdiction. The court quickly dispensed with this argument, however, citing to the case of Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214 (4th Cir. 2002), which held that “the in rem provision [of the Lanham Act] not only covers bad faith claims under §1125(d)(2), but also covers . . . dilution claims under §1125(c).”

NBC Universal, Inc. v. NBCUNIVERSAL.COM, — F.Supp.2d —, 2005 WL 1712887 (July 14, 2005).

Perhaps Morgan Freeman never learned about the high profile domain name disputes involving celebrity names (e.g., Madonna, Bruce Springsteen and Julia Roberts), because he didn’t register morganfreeman.com before it was snatched up by Mighty LLC in April 2003. After learning about Mighty LLC’s cybersquatting, Freeman filed a complaint before a WIPO arbitration panel under the Uniform Domain Name Dispute Resolution Policy.

Mighty LLC didn’t respond to Freeman’s complaint, so the decision never had the opportunity to be very instructive. Prior to the filing of the complaint, Freeman’s attorneys contacted Mighty LLC, to which Mighty LLC responded: “Your client isn’t the only Morgan Freeman. Why do you think he/she is entitled to the domain name?”

The panel found that Freeman’s long and successful career made his name distinctive for use in connection with movies and entertainment services. The panel also recognized Freeman’s rights in the domain name based on a pending United States trademark application for MORGAN FREEMAN [Serial No. 78/531,828]. The panel further held that the circumstances indicated Mighty LLC had no rights or legitimate interests in the domain name, and that it was registered in bad faith.

A regular reader of this weblog (or listener to the podcast) will recognize that Mighty LLC is no stranger to domain name disputes.

Freeman v. Mighty LLC, Case No. D2005-0263 (April 28, 2005).

WIPO arbitration panel orders transfer of walmartfacts.biz.

Wal-Mart seems to have been particularly vigilant lately about protecting itself from third parties setting up websites critiquing Wal-Mart and its practices. See, for example, recent blog postings by Eric Goldman, Kevin Heller, and an article from SiliconValley.com.

Wal-Mart recently scored a victory in an arbitration proceeding under the Uniform Domain Name Dispute Resolution Policy (“UDRP”) before the World Intellectual Property Organization (“WIPO”) against Jeff Milchen, a self-proclaimed critic of Wal-Mart from Bozeman, Montana who registered the domain name “walmartfacts.biz”.

The arbitration panel took great liberty with the factors set forth in the UDRP to determine that Milchen registered the domain name in bad faith. The panel found that Wal-Mart had “not adduced sufficient facts to show the existence of one of the bad faith elements under paragraph 4(b) [of the UDRP].” Instead, the panel noted that the 4(b) elements are not exclusive, and looked at “the totality of the circumstances surrounding the registration and use of the Domain Name” to determine that bad faith existed.

In taking this “totality of the circumstances” approach, the panel considered four factors to find that the domain name was registered in bad faith. First, the respondent had not used the domain name to post content constituting fair use or any other legitimate purpose. Second, the respondent knew of Wal-Mart’s trademark rights when he registered the domain name in January of 2005. Third, the respondent’s “admitted animus” was an indication of actual malice and ill will toward Wal-Mart. Fourth, the use of the entire Wal-Mart trademark in the domain name made it difficult for users of the Internet to infer a legitimate use of the domain name by the respondent.

Wal-Mart Stores, Inc. v. Milchen, Case No. D2005-0130 (April 10, 2005).

Here’s a twist on the typical cybersquatting fact pattern: What can a company do if someone registers a domain name using the company’s trademark, but instead of setting up a gripe site or otherwise acting mischievously, the cybersquatter promotes the company’s goods and services? Deutsche Telekom recently faced this question when it initiated a WIPO arbitration proceeding against an individual who had registered “tmobil.com”. Nothwithstanding the apparent good intentions of the registrant, Deutsche Telekom won a transfer of the domain name.

The respondent Mighty LLC/Domain Admin developed a site at tmobil.com which had as its only links various “sponsored links” that when clicked on, led to sites of authorized distributors of T-Mobile products. Deutche Telekom, the owner of trademark registrations for “T-MOBILE” and “T-MOBIL” sought a transfer of the domain name under the Uniform Domain Name Dispute Resolution Policy (“UDRP”).

For a domain name be transferred under the UDRP, the complainant must demonstrate that (1) the domain name is identical or confusingly similar to a trademark in which the complainant has rights, (2) the respondent has no rights or legitimate interests in the domain name, and (3) the domain name was registered and is being used in bad faith.

In this case, the parties agreed that the domain name was identical or confusingly similar to Deutsche Telekom’s T-MOBILE mark. The difficult issues for the panel were whether the respondent had any right or legitimate interests, and whether there was the requisite bad faith to warrant a transfer.

No Rights or Legitimate Interests

Under the UDRP, a respondent can demonstrate rights or legitimate interests in the domain name by, among other things, using the domain name in connection with a bona fide offering of goods or services. In this case, the respondent argued that “under the [UDRP] the sale of products associated with a trademark contained in a domain name constitutes the bona fide offering of goods and services, where competitive products are not being promoted and where the Respondent has done nothing to confuse users into believing the site is endorsed by or associated with the Complainant.”

The panel rejected this argument, applying the four-factor test set forth in the decision of Oki Data Americas, Inc v. ASD, Inc. WIPO Case No. D2001-0903. Among the Oki Data factors for bona fide offering are that the respondent (a) actually be offering the goods or services at issue for sale, (b) that the site be used to sell only the trademarked goods, and (c) that the site accurately disclose the site owner’s relationship with the trademark owner. In this situation, the respondent “ran afoul” of all of these factors. No goods were sold from the site, the links led to distributors not only of T-Mobile products and services but of competitors, and a copyright notice at the bottom of the page reading “© Copyright 2005 tmobil.com. All Rights Reserved.” would mislead visitors as to the relationship between the respondent and Deutsche Telekom.

Bad Faith

To find that the respondent had registered and used the domain name in bad faith, the panel invoked a provision of the UDRP which states that bad faith arises where a respondent intentionally attempts to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the complainant’s trademark. In this situation, the respondent did not make it clear it was not associated with Deutsche Telekom, gave a false impression by using the copyright notice as it read, and sought commercial gain through the pay-per-click links featured on the site.

Deutsche Telekom AG v. Mighty LLC/Domain Admin, Case No. D2005-0027

The law firm of Faegre & Benson (“Faegre”) brought suit against defendant Purdy and related defendants for trademark infringement, cybersquatting and various state law claims resulting from the defendants’ registration of several domain names incorporating variations of Faegre’s firm name. The district court entered a preliminary injunction against the defendants on January 5, 2004.

The district court had enjoined the defendants from: (1) using domain names identical to or confusingly similar to Faegre’s marks unless the protest or critical commentary nature of the attached website was apparent from the domain name itself, (2) from using marks identical to or confusingly similar to Faegre’s marks, (3) from displaying any website whose appearance is identical or confusingly similar to the trade dress of Faegre’s website; and (4) from illegally appropriating Faegre names.

On appeal, the defendants argued that (1) the injunction was overbroad, (2) the websites were noncommercial and used to make critical comments about Faegre, (3) use of the domain names was not likely to cause confusion as to the sponsor of the sites, and (4) that the use of the domain names was protected by the First Amendment.

The court rejected each of these arguments by the defendants, and affirmed the district court’s entry of a temporary injunction. It held that defendants had not shown the district court abused its discretion in issuing the preliminary injunction.

Faegre & Benson, LLP v. Purdy, 2005 WL 742732 (8th Cir., April 4, 2005).

In a decision released April 4, 2005, the Ninth Circuit has affirmed the district court’s determination in Bosley Medical Institute, Inc. v. Kremer that the registration by defendant of the domain name bosleymedical.com did not constitute infringement of plaintiff’s BOSLEY MEDICAL trademark. The court remanded the matter for further proceedings, however, on plaintiff’s Anticybersquatting Consumer Protection Act (ACPA) claim, as the district court improperly required a showing of commercial use of the domain name as necessary to sustain an anticybersquatting claim.

Defendant Kremer was unhappy with the hair replacement services he received from Plaintiff Bosley, and registered the domain name bosleymedical.com in 2000. In 2001, he developed a site at that address which was critical of Bosley’s services, and included information about an investigation of Bosley that took place in 1996. The site linked to a “sister site,” bosleymedicalviolations.com, which contained links to a newsgroup, which in turn linked to certain of Bosley’s competitors. Kremer earned no revenue from the bosleymedical.com site.

Bosley filed suit alleging trademark infringement, dilution, and violations of the ACPA. The district court granted summary judgment on these claims, holding that Kremer’s use of the mark and the domain name were noncommercial in nature, thus there could be no recovery for either trademark infringement, dilution or cybersquatting. On appeal, the Ninth Circuit affirmed as to the claims for trademark infringement and dilution, but reversed and remanded as to the ACPA claim.

Bosley presented three arguments in support of its claim that Kremer’s use of the trademark in the domain name was commercial in nature, thus susceptible to liability for infringement and dilution.

First, it argued that the links on Kremer’s site leading to commercial sites made it commercial in nature. The court disagreed, noting that the only links from Kremer’s site led to other noncommercial sites which in turn linked to commercial sites. Such a “roundabout path to the advertising of others [was] too attenuated to render Kremer’s site commercial.”

Second, Bosley argued that Kremer had created his site as part of an extortion scheme in an attempt to profit from registering the domain name. The court rejected this argument as well. It determined that there was no evidence that Kremer had tried to sell the domain name itself.

Third, Bosley argued that Kremer’s use of the Bosley trademark was in connection with Bosley’s goods and services, inasmuch as Kremer prevented visitors to the website from obtaining Bosley’s goods and services. The court rejected this argument by holding that Kremer’s use of the Bosley mark was not in connection with the sale of goods or services, but was in connection with the expression of his opinion about Bosley’s goods or services. “Kremer’s use of the Bosley Medical Mark simply cannot mislead consumers into buying a competing product – no customer will mistakenly purchase a hair replacement service from Kremer under the belief that the service is being offered by Bosley.”

As for the ACPA claim, the court held that the lower court erred in granting summary judgment for Kremer, by improperly including the requirement that the domain name be used for commercial purposes. The court cited to the 2004 Eighth Circuit decision of Coca-Cola v. Purdy, 382 F.3d 774, noting that “the use of a domain name in connection with a site that makes a noncommercial or fair use of the mark does not necessarily mean that the domain name registrant lacked bad faith.” Because the district court in this case had granted summary judgment without allowing discovery on the issue of whether Kremer’s registration was made in bad faith, the Ninth Circuit sent it back to the district court for further proceedings.

Bosley Medical Institute, Inc. v. Kremer, No. 04-55962 (April 4, 2005).

Update: Professor Eric Goldman has reported on this case at the Technology & Marketing Law Blog.

An administrative panel of the World Intellectual Property Organization (“WIPO”) has ordered the transfer of the domain name “nyjets.com” to the owner of the New York Jets football team. The panel determined, among other things, that the registrant’s unsupported assertions of plans to use the name for an aircraft leasing business did not prove it had rights or legitimate interests in the name.

NFL Properties LLC and New York Jets LLC brought this WIPO action under the Uniform Domain Name Dispute Resolution Policy, seeking a transfer of nyjets.com from Link Commercial Corp., a company located in the Bahamas. The Complainants argued that (1) the domain name was confusingly similar to the NEW YORK JETS and NY JETS trademarks, (2) the registrant had no rights or legitimate interests with respect to the domain name, and (3) the domain name had been registered and used in bad faith.

The panel awarded a transfer of the domain name. The transfer was ordered, however, only to the New York Jets and not NFL Properties, because the record showed that NFL Properties was merely a representative of the New York Jets regarding licensing and protection of trademark rights. The panel held that “[a]ppointment as a representative to exploit property does not necessarily confer rights in that property on the representative.”

The panel determined that the domain name was confusingly similar to the registered mark NEW YORK JETS. If further determined that Link had not proven it had rights or legitimate interests to use the domain name for an aircraft leasing business. The first mention of one “Norman Yacopino Jets” at nyjets.com came after the NFL and the New York Jets had challenged Link’s ownership of the name. Link had made “unsubstantiated assertions” that its preparation to use the name for this business pre-dated being contacted by the Complainants. The panel determined, however, that such assertions “[did] not constitute evidence of demonstrable preparations.”

In determining that Link had registered and used the name in bad faith, the panel looked to the elevated price Link at which it had offered the name for sale (no less than $2,000), and the fact that Link had a history of registering other domain names in bad faith.

NFL Prop. LLC v. Link Commercial Corp., Case No. D2004-1087 (March 10, 2005).

The U.S. District Court for the District of Massachusetts has determined that the registration of the domain name leasecomm.org by a disgruntled former customer was made in bad faith, thus violating the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. §1125(d). The court placed special emphasis on the fact that the registrant had offered to sell the domain name to the rightful owner of the LEASECOMM mark without having used the domain name in connection with a bona fide offering for sale of goods or services.

The procedural alignment of the parties in this case was a bit unique. Plaintiff Harrison, a retired truck driver, had lost a dispute with Defendant Microfinancial over the domain name leasecomm.org. The dispute had been submitted to arbitration pursuant to the Uniform Domain Name Dispute Resolution Policy before an administrative panel of the World Intellectual Property Organization (“WIPO”). Microfinancial, Inc. v. Harrison, Case No. D2003-0396. Before the domain name could be transferred as ordered by the WIPO panel, Harrison filed suit to enjoin the transfer. Microfinancial counterclaimed under the ACPA, and both parties moved for summary judgment. The court granted Microfinancial’s motion, holding that Harrison had a bad faith intent to profit from the use of the LEASECOMM mark.

Leasecomm, Inc. (“Leasecomm”) is a wholly-owned subsidiary of Microfinancial, and owns the mark LEASECOMM. The mark has been used in commerce since 1985 and is the subject of pending applications with the United States Patent and Trademark Office. Leasecomm also owns the domain names leasecomm.com and leasecomm.net.

Harrison had become unhappy with the terms of a business arrangement he had made with Leasecomm, and in retaliation, registered the domain name leasecomm.org. He established a site at leasecomm.org critical of Microfinancial and Leasecomm’s conduct. Harrison offered to “give” the leasecomm.org domain name to Microfinancial in return for compliance with various demands, including refunding money Microfinancial had allegedly “stolen” from “victims” and writing letters of apology.

Harrison claimed that his offer to transfer the domain name in exchange for compliance with his demands was merely “rhetorical and polemical” and thus did not evidence a serious offer to make a deal. The court rejected Harrison’s argument and found that “the undisputed evidence is clear that Harrison sought to use the offered transfer of the domain name to Microfinancial as leverage to obtain financial benefit for himself and others (whom he described as victims.)”

The court considered several other bad faith factors under the ACPA (e.g., Harrison had registered multiple domain names with were identical or confusingly similar to Microfinancial’s trademarks) to determine that the Harrison registered the domain name in bad faith. It concluded that no reasonable jury could have found that Harrison did not have a bad faith intent to profit from his use of the domain name.

Harrison v. Microfinancial, Inc., 2005 WL 435255 (D.Mass., February 24, 2005).