Anticybersquatting Consumer Protection Act

January 11, 2022 Cybersquatting

ACPA claim survives because mark was distinctive when domain name was re-registered

ACPA distinctive re-regiistered

Federal law has a statute that prohibits abusive domain name registration. The Anticybersquatting Consumer Protection Act, 15 U.S.C. 1125(d) (ACPA) provides, among other things, that one is prohibited from registering, trafficking in or using, with a bad faith intent to profit, a domain name that is confusingly similar to another’s trademark that was distinctive when the domain name was registered.

In the recent case of Instructure, Inc. v. Canvas Technologies, the court considered whether the ACPA requires the mark to have been distinctive when the domain name was first registered, or whether it can still be protected by being distinctive when the domain name was re-registered. It held that the statute applies to distinctiveness at re-registration.

In this case, the disputed domain name was first registered in 1997, several years before plaintiff obtained trademark rights in its CANVAS mark. Defendant moved to dismiss plaintiff’s cybersquatting claim, arguing that the plaintiff did not have rights to a distinctive mark when the domain name was first registered, and that therefore the statute’s requirement was not met. Plaintiff showed, however, that the ownership of the domain name changed sometime in 2021 (i.e., it was re-registered).

Looking to the statute’s plain language, Congressional intent, public policy, and the trending weight of authority in other federal circuits, the court held that re-registration, or “registration again” is contemplated under the ACPA’s language. It denied defendant’s motion to dismiss the ACPA claim.

Instructure, Inc. v. Canvas Technologies, Inc., 2022 WL 43829 (D.Utah, January 5, 2022)

April 6, 2020 Cybersquatting, Trademarks

Domain disputes under federal law can be inefficient

A recent case from a federal court in Kentucky shows why the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d) – the “ACPA”) can be – compared to the Uniform Domain Name Dispute Resolution Policy (“UDRP”) – a relatively inefficient way of resolving domain name disputes under federal law.

Defendant was an infringer

Here is a quick rundown of the facts. Defendant owned a business directly competitive to plaintiff ServPro. Plaintiff had used its mark and trade dress since the 1960’s. Defendant set up a website using plaintiff’s color scheme, bought Google AdWords triggering ads showing plaintiff’s mark, and registered a domain name identical to plaintiff’s mark – servpro.click. These facts supported the court’s entry of summary judgment in plaintiff’s favor on the question of trademark infringement. But the ACPA claim got the court got hung up because of some hard-to-believe facts the defendant put forward.

What the ACPA requires

The ACPA requires a plaintiff to prove bad faith intent to profit from the disputed domain name. And it gives courts a list of nine things that a court can consider in determining this bad faith. In other words, this list is not the be-all and end-all guide for determining ACPA bad faith. Here are the nine things a court should consider in resolving domain name disputes under federal law:

(I) the trademark or other intellectual property rights of the person, if any, in the domain name;

(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

(III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

(V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;

(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;

(VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;

(VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

(IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of [the Lanham Act].

The court’s decision on cybersquatting

The court found that factors I through IV and IX weighed in plaintiff’s favor. But the court found there to be a genuine issue as to factor V and denied summary judgment. It found that defendant had an intent to divert plaintiff’s customers.

Defendant asserted he did not purchase the servpro.click domain name intending to divert customers from plaintiff for defendant’s gain. Instead, he alleged that he registered the domain name to collect information and perform analytical research for running Google AdWords. He also alleged that the website the domain name pointed to did not advertise that it was ServPro. And the contact information on the website pointed to his personal cellphone. He alleged that when answering calls made to that number, he identified himself as affiliated with his company and never identified himself as affiliated with plaintiff.

The court probably had difficulty denying summary judgment
in a situation where the facts alleged are so hard to believe. A court’s role at the summary judgment stage, however, is not to weigh the evidence, but merely to determine whether there is a factual issue for trial. The time for really ascertaining the truth of defendant’s assertions will come later.

Was the ACPA too cumbersome for this case?

In any event, these flimsy arguments remaining alive far into expensive litigation underscores how domain disputes under federal law are more cumbersome . The marshaling of evidence, briefing and argument in federal court can easily rack up six-figures in attorney’s fees and costs. Even after that effort, the summary judgment standard provides little assurance a party arguing against thin facts will get relief. Had the parties resolved this dispute under the UDRP and not the ACPA, plaintiff’s arguments would have had more success.

ServPro Intellectual Property, Inc. v. Blanton, 2020 WL 1666121 (W.D. Ky. April 3, 2020)

Court orders transfer of domain name at preliminary injunction stage of trademark case

October 23, 2017 Cybersquatting, Litigation, Trademarks

Court orders transfer of domain name at preliminary injunction stage of trademark case

Plaintiff sued a competitor under the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d) (“ACPA”)) and brought other trademark-related claims concerning the competitor’s alleged online scam of selling infringing nutritional supplement products. Plaintiff also sued the domain name privacy protection service Namecheap, which the competitor had used to register the domain name. As part of the order granting plaintiff’s motion for preliminary injunction, the court ordered Namecheap to transfer the domain name to plaintiff.

The court noted that a preliminary injunction “is an extraordinary remedy never awarded as of right,” and that the “traditional purpose of a preliminary injunction is to protect the status quo and to prevent irreparable harm during the pendency of the lawsuit.” Given these parameters, one may be reasonably surprised that the court went so far as to transfer the domain name before the case could be taken all the way through trial. Usually the transfer of the domain name is part of the final remedy awarded in a cybersquatting case, whether under the ACPA or the Uniform Domain Name Dispute Resolution Policy.

The opinion did not address the issue of whether the domain name transfer prior to trial might go further than to “protect the status quo”. It would seem the court could have just as easily protected the status quo by ordering the domain name not be used. The court apparently found the evidence to be drastically in favor of plaintiff. And since the defendant-competitor did not show up for the hearing, plaintiff’s evidence went unrebutted.

Nutramax Laboratories, Inc. v. Nutra Max Labs, Inc., 2017 WL 4707447 (D.S.C. October 20, 2017)

Court stops former dealer and company spokesperson from using trademark in domain name

Plaintiff likely to succeed on merits of claim under Anticybersquatting Consumer Protection Act (ACPA).

Defendant worked as a dealer, spokesperson and consultant to plaintiff. About the time she ended her relationship with plaintiff, defendant and another woman formed a competing business and registered several domain names comprised of plaintiff’s trademark or otherwise mimicking the domain name of plaintiff’s legitimate site. They used those domain names to redirect web users to the new company’s website.

Plaintiff sued under the ACPA and sought a temporary restraining order against the use of the domain names. In entering the TRO, the court found plaintiff was likely to succeed on the merits of its ACPA claim.

The court easily found the domain names were confusingly similar to plaintiff’s registered trademarks.

On the issue of bad faith use or registration, the court looked to the prior relationship between the parties, the electronic mail correspondence between them, and the undisputed fact that the parties were competitors. The court concluded that common sense suggested that the direction of traffic with the use of the disputed domain names to defendants’ website was for the purpose of commercial gain. Therefore, the court concluded that plaintiff had established a likelihood of success on the merits as to the cybersquatting claim.

Ball Dynamics Int’l LLC v. Saunders, 2016 WL 7034974 (D. Colo. December 1, 2016)

January 5, 2015 Cybersquatting, Trademarks

Domain name case under ACPA failed because trademark was not distinctive

Federal appeals court holds that plaintiff failed to satisfy all elements of the Anticybersquatting Consumer Protection Act in action against competing airline

The federal Anticybersquatting Consumer Protection Act (ACPA) [15 U.S.C. 1125(d)] is a provision in U.S. law that gives trademark owners a cause of action against one who has wrongfully registered a domain name. In general, the ACPA gives rights to owners of trademarks that are either distinctive or famous at the time the defendant registered the offending domain name.

The Eleventh Circuit Court of Appeals recently affirmed the decision of a lower court that dismissed an ACPA claim, holding that the plaintiff failed to plead that its mark was distinctive at the time of the domain name registration.

Plaintiff sued its competitor, who registered the domain name tropicoceanairways.com. Defendant moved to dismiss, and the lower court granted the motion, finding that plaintiff failed to plead that its mark TROPIC OCEAN AIRWAYS was distinctive and thus protected under the ACPA. On appeal, the Eleventh Circuit affirmed the dismissal, holding that plaintiff’s complaint failed to allege that the mark was either suggestive or had acquired secondary meaning as an indicator of source for plaintiff’s services.

Suggestive marks are considered distinctive because they require “a leap of the imagination to get from the mark to the product.” (The court provided the example of a penguin used as a mark for refrigerators.) In this case, the court found the term “tropic ocean airways” was not suggestive, as it merely “inform[ed] consumers about the service [plaintiff provided]: flying planes across the ocean to tropical locations.”

The court rejected plaintiff’s argument that a pending application at the United States Patent and Trademark Office to register the mark proved that it was suggestive. While a certificate of registration may establish a rebuttable presumption that a mark is distinctive, the court held plaintiff was not entitled to such a presumption here, where the application remained pending. Moreover, the court observed in a footnote that the presumption of distinctiveness will generally only go back to the date the application was filed. In this case, the trademark application was not filed until about a year after the domain name was registered.

As for the argument the mark had acquired secondary meaning, the court found plaintiff’s allegations to be insufficient. The complaint instead made conclusory allegations about secondary meaning that were insufficient to survive a motion to dismiss. The court held that plaintiff failed to allege the nature and extent of its advertising and promotion, and, more importantly, did not allege any facts about the extent to which the public identified the mark with plaintiff’s services.

Tropic Ocean Airways, Inc. v. Floyd, — Fed.Appx. —, 2014 WL 7373625 (11th Cir., Dec. 30, 2014)

Evan Brown is an attorney in Chicago helping clients with domain name, trademark, and other matters involving technology and intellectual property.