Cybersquatting – Page 7 – Attorney Evan Brown

March 3, 2005 Cybersquatting

Court orders truck driver to deliver domain name

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).

February 11, 2005 Cybersquatting, Trademarks

KERACARE trademark diluted by registration of domain name KeraCare.com

The United States District Court for the Northern District of Illinois granted summary judgment in favor of a plaintiff who claimed that the defendant’s registration and use of fifteen domain names incorporating variations of plaintiff’s trademark KERACARE caused dilution of the mark.

Plaintiff Avlon owns the incontestable trademark registration for the mark KeraCare for hair care products. Defendant Robinson is in the hair care products industry as well, and does business under the name Sheldeez Hair Prouducts and Salon. Robinson registered at least fifteen domain names incorporating variations of Avlon’s mark, including www.keracare.com. From these sites, Robinson offered for sale hair care products made by both Avlon and Avlon’s competitors.

Avlon sued Robinson claiming, among other things, that Robinson’s incorporation of Avlon’s mark in his domain names diluted Avlon’s mark, in violation of Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c). (Dilution is defined in Section 45 of the Lanham Act, 15 U.S.C. § 1127 as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception.) Avlon moved for summary judgment on the dilution claim, and the court granted Avlon’s motion.

Robinson first argued that Avlon had failed to show the KeraCare mark is famous. The court disagreed, and found that the mark is famous. The court noted that Robinson’s actions in part betrayed the mark’s fame – if the mark was unfamiliar to the vast majority of shoppers, Robinson would not have registered at least fifteen variants of the word as domain names. The court also gave weight to the fact that Avlon’s mark was incontestable under Section 15 of the Lanham Act, 15 U.S.C. §1065. Finally, the court also gave weight to the fact that Avlon sells millions of dollars of KeraCare products annually, and that Robinson himself testified that the KeraCare line is one of four product lines that are “well known and respected in a marketplace ‘flooded’ with product lines.”

Robinson next argued that Avlon had failed to establish actual dilution of its mark as required by the Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc. et al. 537 U.S. 418 (2003). The court was not persuaded by this argument. It looked to the portion of Moseley which states that “actual dilution can reliably be proved through circumstantial evidence–the obvious case is one where the junior and senior marks are identical.” Because Robinson’s domain names used Avlon’s exact marks, the court found that Avlon had shown actual dilution. The court noted that actual dilution was also supported by the fact that Robinson’s control over all possible variations of Avlon’s marks permitted him to decide what messages and goods are associated with such marks.

Avlon Indus. v. Robinson, 2005 WL 331561 (N.D.Ill. Feb. 8, 2005).