Cybersquatting
Monk
******
EXECUTIVE SUMMARY
In addition to traditional trademark actions, two remedies have recently been devised to permit an owner to defend his or her trademark against persons who register a domain name containing that trademark. The Anticybersquatting Consumer Protection Act (ACPA) adds a cause of action to Section 43 of the Lanham Act to protect trademark and famous mark owners against “cybersquatting,” which is the practice of registering an Internet domain name, or other identifier of an online location, with the hopes of profiting due to that name’s association with a trademark owned by someone else.
The ACPA makes it unlawful to register, traffic in, or use in "bad faith" a domain name that is identical, confusingly similar to, or dilutive of another's trademark or personal name, regardless of the goods or services of the parties. Due to the First Amendment implications of the ACPA, the statute also requires that the website be non-commercial in nature in order for the ACPA to apply. Furhtermore, the plaintiff must demonstrate that an appreciable number of ordinarily prudent purchasers are likely to be misled or confused.
Remedies include cancellation or transfer of the domain name, and statutory damages between $1,000 and $100,000 per domain name (as an election in lieu of actual damages and profits). Injunctive relief is available against domain names. Additionally, an in rem action may be brought against the domain name itself if jurisdiction cannot be obtained over the owner.
While the Anticybersquatting Consumer Protection Act has never been applied to prohibit the use of a domain name to criticize a company where the defendant had no intent to profit from the website, corporations and politicians have begun using the new cybersquatting laws to attempt to quash consumer criticism, open dissent and personal expression in violation of the sprit of the First Amendment. Many corporations have obtained preliminary injunctions, forcing consumers and other non-commercial use parties to shut down their websites, quashing their creative works and costing them money.
Under the ACPA, a party may prevail in a trademark infringement action under the cybersquatting theory by satisfying a two-pronged test: (1) the registered domain name must be identical or confusingly similar to the owner's distinctive trademark and (2) the domain name must be registered or used by that person with a bad faith intent to profit from the owner's trademark. Furthermore, Congress limited the application of section 43 of the Lanham Act to cases of commercial speech; Congress included a savings clause explicitly providing that the cybersquatting law would not override either the First Amendment or section 43(c)(4) of the Lanham Act, thus preserving all First Amendment defenses.
The ACPA makes it unlawful to register, traffic in, or use in "bad faith" a domain name that is identical, confusingly similar to, or dilutive of another's trademark or personal name, regardless of the goods or services of the parties. Due to the First Amendment implications of the ACPA, the statute also requires that the website be non-commercial in nature in order for the ACPA to apply. Furhtermore, the plaintiff must demonstrate that an appreciable number of ordinarily prudent purchasers are likely to be misled or confused.
Remedies include cancellation or transfer of the domain name, and statutory damages between $1,000 and $100,000 per domain name (as an election in lieu of actual damages and profits). Injunctive relief is available against domain names. Additionally, an in rem action may be brought against the domain name itself if jurisdiction cannot be obtained over the owner.
While the Anticybersquatting Consumer Protection Act has never been applied to prohibit the use of a domain name to criticize a company where the defendant had no intent to profit from the website, corporations and politicians have begun using the new cybersquatting laws to attempt to quash consumer criticism, open dissent and personal expression in violation of the sprit of the First Amendment. Many corporations have obtained preliminary injunctions, forcing consumers and other non-commercial use parties to shut down their websites, quashing their creative works and costing them money.
Under the ACPA, a party may prevail in a trademark infringement action under the cybersquatting theory by satisfying a two-pronged test: (1) the registered domain name must be identical or confusingly similar to the owner's distinctive trademark and (2) the domain name must be registered or used by that person with a bad faith intent to profit from the owner's trademark. Furthermore, Congress limited the application of section 43 of the Lanham Act to cases of commercial speech; Congress included a savings clause explicitly providing that the cybersquatting law would not override either the First Amendment or section 43(c)(4) of the Lanham Act, thus preserving all First Amendment defenses.
OUTLINE
I. INTRODUCTION
A. “Cybersquatting” is the practice of registering an Internet domain name, or other identifier of an online location, with the hopes of profiting due to that name’s association with a trademark owned by someone else.
1. Closely associated with cybersquatting has been the emergence of parody sites and dissent sites in which “cybergripers” voice consumer commentary and other forms of dissent.
B. In 1999 the Anticybersquatting Consumer Protection Act was passed as a means of dealing with, among other things, the new and growing problem of cybersquatting.
1. The Anti-cybersquatting Consumer Protection Act was designed to prevent private citizens from registering domain names of prominent businesses and then offering to sell them to those businesses.
(a) Holders of trademarks, both consumer and corporate holders, extensively lobbied for passage of this legislation and were well prepared to utilize it from the moment it was signed into law.
(b) However, notwithstanding the ACPA, the First Amendment protects a griper’s use of a trademark party’s name in the text, domain name and meta tags of a web site.
C. While the Anticybersquatting Consumer Protection Act has never been applied to prohibit the use of a domain name to criticize a company where the defendant had no intent to profit from the website, corporations have begun using the new cybersquatting laws to attempt to quash consumer criticism, open dissent and personal expression in violation of the sprit of the First Amendment.
1. For example, several weeks following the passage of the Anticybersquatting Consumer Protection Act:
(a) LucasFilm asked for the domain name rights to MyStarwars.com., an authorized reseller of LucasFilm products. The site decided to give up using its domain name because it was cheaper to start over with fresh sites rather than battling LucasFilm.
(b) Alitalia Airlines obtained a preliminary injunction against a consumer who established the website www.alitaliasucks.com to voice consumer dissent regarding the consumer’s experience flying with Alitalia Airlines.
II. THE ANTICYBERSQUATING CONSUMER PROTECTION ACT
A. On November 29, 1999 the Anticybersquatting Consumer Protection Act thereinafter “ACPA”) was enacted as an amendment to the Lanham Act.
1. ACPA, PL 106-113 Title III, 113 Stat. 1537-537-44(2000)(codified as Lanham Act §43(d), 15 U.S.C. §1125(d)).
B. Under ACPA, a party may prevail in a trademark infringement action under the cybersquatting theory by satisfying a two-pronged test:
1. The registered domain name must be identical or confusingly similar to the owner's distinctive trademark or, in the case of a famous mark, identical, dilutive of, the owner's trademark; and
2. The domain name must be registered or used by that person with a bad faith intent to profit from the owner's trademark. 15 U.S.C. § 1125(d)(1)(A)(i).
C. Courts may consider a number of factors in applying the two-pronged test.
1. The more significant factors used by courts have been commercial use, confusion/diversion of consumers, bad faith intent and the “creative works” exception.
D. Background
1. The ACPA law was passed to meet problems that grew out of the sudden emergence of alphanumeric domain names as a means of locating content on the Internet.
2. Some people had the foresight to reserve domain names that they, themselves, did not intend to use, recognizing that in coming years others might find those names particularly valuable and worth considerable sums of money.
3. As a result, by the time that it occurred to many companies that it would be in their interest to advertise their goods and services on the Internet, they found that others had beaten them to the domain name registrar's door. Such companies found themselves having to pay others who had “squatted” on their cyber names. .
E. Remedies
1. The ACPA provides the traditional trademark infringement remedies of injunctive relief, the defendant’s profits, actual damages and costs.
(a) Additionally, a court, in its discretion, may also award statutory damages, over and above the other damages, in an amount ranging from $1,000 to $100,000 for each infringing domain name.
(b)The injured party may also recover attorney’s fees, in the court’s discretion.
(c) The ACPA can provide the injured party with in rem jurisdiction over the domain name where that party cannot, with due diligence, obtain personal jurisdiction over the defendant.
2. Also, the factors for determining bad faith can be applied by the domain name registrar. The domain name registrar may fill the shoes of a court in determining bad faith and is exempted from liability.
F. Problematic Scope of the ACPA
1. The “reasonable grounds to believe” exclusion provides cybersquatters with an opportunity to create a factual issue as to whether the cybersquatter reasonably believed his or her use was fair or lawful.
1. The ACPA provides the traditional trademark infringement remedies of injunctive relief, the defendant’s profits, actual damages and costs.
(a) Additionally, a court, in its discretion, may also award statutory damages, over and above the other damages, in an amount ranging from $1,000 to $100,000 for each infringing domain name.
(b)The injured party may also recover attorney’s fees, in the court’s discretion.
(c) The ACPA can provide the injured party with in rem jurisdiction over the domain name where that party cannot, with due diligence, obtain personal jurisdiction over the defendant.
2. Also, the factors for determining bad faith can be applied by the domain name registrar. The domain name registrar may fill the shoes of a court in determining bad faith and is exempted from liability.
F. Problematic Scope of the ACPA
1. The “reasonable grounds to believe” exclusion provides cybersquatters with an opportunity to create a factual issue as to whether the cybersquatter reasonably believed his or her use was fair or lawful.
III. FIRST AMENDMENT IMPLICATIONS OF ACPA
A. Corporations began to seek cybersquatting remedies against registered domain names in which average citizens voiced dissent or dissatisfaction with the company or politician.
B. The Alitalia Case
1. This case arose out of a dispute between plaintiff Alitalia Airlines and defendant William Porta, one of its former customers.
2. Porta registered the name www.alitaliasucks.com. The web site was completely non-commercial - it carried no advertising, it sold no goods, and it did not link to any commercial sites. Its sole function was to set forth Porta’s criticisms of Alitalia’s treatment of Porta, as well as documents portraying Alitalia’s attacks on what Porta considered to be his free speech rights.
(a) Alitalia was granted a preliminary injunction, which forced Porta to shut the website down.
(b) At trial, the injunction was reversed and Porta was awarded damages.
3. Enforcement of Alitalia’s claims would have violated the First Amendment. In trademark cases, unlike copyright cases, e.g., Harper & Row v. Nation Enterprises, 471 U.S. 539, 560 (1985), First Amendment considerations routinely receive separate discussion.
(a)Where, as is true in Alitalia, the defendant was engaged in non-commercial speech, the mere application of trademark law may violate the First Amendment, L.L. Bean v. Drake Publishers, 811 F.2d 26, 32-33 (1st Cir. 1987).
(a)Where, as is true in Alitalia, the defendant was engaged in non-commercial speech, the mere application of trademark law may violate the First Amendment, L.L. Bean v. Drake Publishers, 811 F.2d 26, 32-33 (1st Cir. 1987).
IV. APPLICATION OF THE TWO PRONGED TEST AND ITS FACTORS
A. Commercial Use
1. In many cases, the courts have struggled with the question of whether a particular use of trademarks constituted commercial or non-commercial speech.
(a) Commercial speech, although protected by the First Amendment, has a lesser status than non-commercial speech, and thus does not benefit from all of the dctrines developed to protect non-commercial speech. Dun & Bradstreet v. Greenmoss Bldrs., 472 U.S. 749, 762-763 (1985); and
(b) This is because Congress limited the application of section 43 of the Lanham Act to cases of commercial speech.
1. In many cases, the courts have struggled with the question of whether a particular use of trademarks constituted commercial or non-commercial speech.
(a) Commercial speech, although protected by the First Amendment, has a lesser status than non-commercial speech, and thus does not benefit from all of the dctrines developed to protect non-commercial speech. Dun & Bradstreet v. Greenmoss Bldrs., 472 U.S. 749, 762-763 (1985); and
(b) This is because Congress limited the application of section 43 of the Lanham Act to cases of commercial speech.
(1) See sections 43(a)(1)(B) and 43(c)(4)(B), 15 U.S.C. §§ 1125(a)(1)(B), 1125(c)(4)(B).
(2) Furthermore, Congress incorporated the ACPA into the Lanham Act as subsection 43(d), 15 U.S.C. § 1125(d), where it is covered by the exclusion of non-commercial and consumer commentary, which applies to everything in “this section.”
a. In addition, Congress included a savings clause explicitly providing that the cybersquatting law would not override either the First Amendment or section 43(c)(4) of the Lanham Act, thus preserving all First Amendment defenses. Public Law 106-113, Section 3008, 113 Stat. 1501A-551.
B. Confusion / Diversion
1. Evidence Of Confusion
(a) A trademark party must show that an “appreciable number of ordinarily prudent” customers would be “misled” or “confused” as to the source of the griper’s web site. Thompson Medical co. , Inc. v. Pfizer, 753 F.2d 208, 213 (2d Cir. 1985).
(1) An “initial belief” is not equivalent to confusion regarding source. See The Network Network v. CBS, 54 U.S.P.Q.2d 1150, 1155 (C.D. Cal. 2000) (“There is a difference between inadvertently landing on a website and being confused.”)
(b) Some courts recognize a brand of consumer confusion called “initial interest confusion” which permits a finding of a likelihood of confusion although the consumer is only initially confused and quickly becomes aware of the source's actual identity. See Planned Parenthood Fed'n of Am. Inc. v. Bucci, 1997 WL 133313, at 12 (S.D.N.Y. Mar.24, 1997), aff'd, 152 F.3d 920 (2d Cir.1998), cert. denied, 525 U.S. 834 (describing initial interest confusion).
C. Bad Faith Intent to Profit
1. A trademark party must also present evidence that a cybergriper used, registered, or trafficked in the trademark party’s domain name with a “bad faith intent to profit” from use of the domain name, to prevail on a claim under the ACPA, 15 U.S.C. § 1125(d)(1)(A)(i).
(a) For the ACPA to apply, the defendant must have “a bad faith intent to profit from that mark” or a personal name as may be applicable. 35 U.S.C. § 43(d)(1)(A)(i). See Harrods Ltd. v. Sixty Internet Domain Names, 110 F. Supp. 2d 420 (E.D. Va. 2000) (dismissing in rem action for failure to plead bad faith).
(b) Further, the ACPA does not apply to a party who is aware of the trademark status of a mark, but registers the mark for a reason other than bad faith intent to profit, even if the domain name is likely to confuse consumers.
2. Some trademark parties have argued that cybergriper websites violate section 1125(d) because it is clear, by the wording or construction of the griper’s site, that the griper’s intent is to divert consumers from the trademark party’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark.
(a) However, ACPA clearly states that a cybergriper must have a “bad faith intent to profit,” and thus a trademark party cannot satisfy the standard by showing only that the griper wished to ”tarnish or disparage” the trademark party. See 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31:148 (4th ed. 1999)(footnotes omitted).
D. Creative Works Exception
1. The use of another’s name in a domain name is analogous to the use of a trademark in the title of a creative work, to which the courts give First Amendment protection because it is part of the author’s expression, calling attention to the content of the work in question.
(a) E.g., Twin Peaks Production v. Publications Int'l, 996 F.2d 1366, 1379 (2dCir. 1993); Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989).
2. In several cases, trademark party’s have cited Planned Parenthood Federation of America v. Bucci, 152 F.3d 920 (2d Cir. 1998), to support the argument that a griper’s use of the trademark party’s name in the domain name is not protected by the First Amendment.
(a) See, e.g., Taubman Co. v. Webfeats, 319 F.3d 770 (6th Cir. 2002) (preliminary injunction granted, where district court cited Planned Parenthood v. Bucci, 42 U.S.P.Q.2d 1430 (S.D.N.Y. 1997), aff'd mem., 152 F.3d 920 (2d Cir. 1998), for the proposition that “[u]sing websites that
incorporate Plaintiff's mark to disparage Plaintiff would likely be an unfair commercial use within the scope of the Lanham Act's protection.”)
(b) However, the Planned Parenthood case supports the argument that use of a trademark party’s name in a domain name is protected speech as long as the griper is clear that the trademark party is not the source of that website.
V. CONCLUSION
A. Websites that proffer consumer commentary and political assent or dissent is exactly what courts, under the First Amendment, should fastidiously protect. A citizen’s criticisms would be wholly mysterious -- indeed, they would be pointless -- if s/he had to omit the name of the company or politician s/he is criticizing. This is core speech that should be fully protected by the First Amendment as non- commercial speech.
INTRODUCTION
The Internet age has created a variety of new means of communicating, making money, and promoting personal and political agendas. One internet scheme which began to emerge in the mid-nineties is “cybersquatting.” Cybersquatting is the practice of registering an Internet domain name[1], or other identifier of an online location, with the hopes of profiting due to that name’s association with a trademark[2] owned by someone else. Profits materialize once the owner of the trademark pays a premium to purchase the Internet domain name or identifier from the cybersquatter[3].
Closely associated with cybersquatting has been the emergence of parody sites and dissent sites in which “cybergripers” - as opposed to cybersquatters- voice consumer commentary and other forms of dissent[4]. With a few limited exceptions, the law did not provide an effective remedy to those injured by cybersquatting, because the conduct did not fit within the traditional definitions of activities that constituted trademark infringement.
In 1999 the Anticybersquatting Consumer Protection Act was passed as a means of dealing with, among other things, the new and growing problem of cybersquatting. Traditional cybersquatting in its profiteering form is certainly objectionable and deserving of the legal remedies afforded under the new cybersquatting law. Still, while the Anticybersquatting Consumer Protecttion Act has never been applied to prohibit the use of a domain name to criticize a company where the defendant had no intent to profit from the website, corporations and politicians have begun using the new cybersquatting laws to attempt to quash consumer criticism, open dissent and personal expression in violation of the sprit of the First Amendment. Holders of trademarks, both consumer and corporate holders, extensively lobbied for passage of this legislation and were well prepared to utilize from the moment it was signed into law. For example, several weeks following the passage of the Anticybersquatting Consumer Protection Act the following article appeared in an industry newsletter:
Recently, two of our clients were asked to cease and desist the use of their domain names, because URLs contained trademarked terms. With the recent trademark laws passed [Anticybersquatting Consumer Protection Act], it has become very difficult for non-trademark holders to argue their case. I have decided to write this article to mostly warn people from choosing domain names that may infringe upon trademarked terms.
A few months ago one of our clients, shadesrus.com, notified me that we should stop optimizing their site at the given URL, and that they had changed their name because Toys-R-Us had threatened to take action. We had worked very hard in getting their site to the number 2 position on AltaVista with the keyword “sunglasses” and now we had to start over.
Then a few weeks ago we heard a similar story from another client, MyStarwars.com. This time LucasFilm was asking for the domain name rights.
Both of our clients have been asked to cease and desist using these domains, even though they both have very good cases for holding on to them. Shadesrus does not sell toys or any toy-like product, and MyStarwars.com is an authorized reseller of LucasFilm products. Unfortunately, both these sites have decided to give up using the domain names because it will be cheaper for them to start over with fresh sites, rather than battling the
giants.
Another similar case is the non-profit community site latinabarbie.com. The site belongs to 21-year-old Michelle Curiel, who has been receiving thousands of hits a week and has about 900 registered email users. She is being asked by Mattel, Inc. to transfer the name back to them and in return they will pay her $70 for her domain registration fee!
I had a chance to speak with Michelle and found out that she has simply chosen her childhood nickname of “latinabarbie” as her domain name. Michelle does not sell or mention any products at her site related to those products made by Mattel. At this point, Michelle is talking to her attorneys and has not yet decided what she will do. She has worked very hard on her site, and I hope that she will be able to keep it. SubmitExpress Newsletter, Dec 15 1999[5].
A cybergriper website created by a consumer, satirist etc. (hereinafter collectively referred to as “griper”) to air his or her frustrations with a business, public figure, etc. (hereinafter collectively referred to as “trademark party”) is not only permissible under trademark law but is speech that should be protected by the First Amendment.
Closely associated with cybersquatting has been the emergence of parody sites and dissent sites in which “cybergripers” - as opposed to cybersquatters- voice consumer commentary and other forms of dissent[4]. With a few limited exceptions, the law did not provide an effective remedy to those injured by cybersquatting, because the conduct did not fit within the traditional definitions of activities that constituted trademark infringement.
In 1999 the Anticybersquatting Consumer Protection Act was passed as a means of dealing with, among other things, the new and growing problem of cybersquatting. Traditional cybersquatting in its profiteering form is certainly objectionable and deserving of the legal remedies afforded under the new cybersquatting law. Still, while the Anticybersquatting Consumer Protecttion Act has never been applied to prohibit the use of a domain name to criticize a company where the defendant had no intent to profit from the website, corporations and politicians have begun using the new cybersquatting laws to attempt to quash consumer criticism, open dissent and personal expression in violation of the sprit of the First Amendment. Holders of trademarks, both consumer and corporate holders, extensively lobbied for passage of this legislation and were well prepared to utilize from the moment it was signed into law. For example, several weeks following the passage of the Anticybersquatting Consumer Protection Act the following article appeared in an industry newsletter:
Recently, two of our clients were asked to cease and desist the use of their domain names, because URLs contained trademarked terms. With the recent trademark laws passed [Anticybersquatting Consumer Protection Act], it has become very difficult for non-trademark holders to argue their case. I have decided to write this article to mostly warn people from choosing domain names that may infringe upon trademarked terms.
A few months ago one of our clients, shadesrus.com, notified me that we should stop optimizing their site at the given URL, and that they had changed their name because Toys-R-Us had threatened to take action. We had worked very hard in getting their site to the number 2 position on AltaVista with the keyword “sunglasses” and now we had to start over.
Then a few weeks ago we heard a similar story from another client, MyStarwars.com. This time LucasFilm was asking for the domain name rights.
Both of our clients have been asked to cease and desist using these domains, even though they both have very good cases for holding on to them. Shadesrus does not sell toys or any toy-like product, and MyStarwars.com is an authorized reseller of LucasFilm products. Unfortunately, both these sites have decided to give up using the domain names because it will be cheaper for them to start over with fresh sites, rather than battling the
giants.
Another similar case is the non-profit community site latinabarbie.com. The site belongs to 21-year-old Michelle Curiel, who has been receiving thousands of hits a week and has about 900 registered email users. She is being asked by Mattel, Inc. to transfer the name back to them and in return they will pay her $70 for her domain registration fee!
I had a chance to speak with Michelle and found out that she has simply chosen her childhood nickname of “latinabarbie” as her domain name. Michelle does not sell or mention any products at her site related to those products made by Mattel. At this point, Michelle is talking to her attorneys and has not yet decided what she will do. She has worked very hard on her site, and I hope that she will be able to keep it. SubmitExpress Newsletter, Dec 15 1999[5].
A cybergriper website created by a consumer, satirist etc. (hereinafter collectively referred to as “griper”) to air his or her frustrations with a business, public figure, etc. (hereinafter collectively referred to as “trademark party”) is not only permissible under trademark law but is speech that should be protected by the First Amendment.
Often, when such a website is established the trademark party seeks a preliminary injunction to prevent a griper from posting criticism on the Internet. The injunction is often sought to prohibit the griper from using the trademark party’s name in the domain name, meta-tags[6] or anywhere in the text of any Internet site, and is based fully or in part on the Anti-cybersquatting Consumer Protection Act.
The Anti-cybersquatting Consumer Protection Act was designed to prevent private citizens from registering domain names of prominent businesses and then offering to sell them to those businesses. Any attempt to sell the domain name back to the business or to profit from it any way violates the anti-cybersquatting law.
However, the First Amendment protects a griper’s use of a trademark party’s name in the text, domain name and meta tags of a web site. The domain name is similar to the title of a creative work in that it uses the trademarked party’s name to draw attention to the content of the site; such use of a trademark party’s name is permissible under federal trademark law and constitutes the type of consumer commentary that has long been protected by the First Amendment. Still, trademark parties, in attempting to procure permanent injunctions, have begun arguing that griper sights are commercial in nature, thus not protected by the First Amendment. Trademark parties have further argued that, even if the griper’s sight is a non-commercial, creative work, tend to confuse and/or divert consumers and were established with a bad faith intent to profit, which is prohibited by the Anti-cybersquatting Consumer Protection Act.
Nevertheless, as long as a griper’s website in no way attempts to confuse users or mislead them to believe that it was the trademarked party’s official site, includes prominent disclaimers explaining that the site is not sponsored by or affiliated with the trademarked party, and uses the trademarked party’s name merely to identify it as the subject of the criticism, the web site is protected by the First Amendment.
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THE ANTICYBERSQUATING CONSUMER PROTECTION ACT
On November 29, 1999, as part of the Omnibus Budget Bill, President Bill Clinton signed into law the “Anticybersquatting Consumer Protection Act” (hereinafter “ACPA”) as an amendment to the Lanham Act. ACPA, PL 106-113 Title III, 113 Stat. 1537-537-44(2000)(codified as Lanham Act §43(d), 15 U.S.C. §1125(d)). Under ACPA, a party may prevail in a trademark infringement action under the cybersquatting theory by satisfying a two-pronged test:
1. The registered domain name must be identical or confusingly similar to the owner's distinctive trademark or, in the case of a famous mark, identical, confusingly similar to, or dilutive of, the owner's trademark; and The domain name must be registered or used by that person with a bad faith intent to profit from the owner's trademark.[7]
15 U.S.C. § 1125(d)(1)(A)(i).
The statute provides that a court may consider the following factors in determining whether a person alleged to have violated ACPA has acted in bad faith, the first four factors counting against a finding of bad faith and the remaining factors weighing in favor of finding bad faith:
If the registrant has any trademark or other intellectual property rights in the name.
If this is the legal or nickname of the registrant.
The registrant’s prior use of the domain name in connection with the good faith offering of goods
and services[8].
Intent to divert to a site that could harm the trademark owner’s goodwill – either for commercial gain or with intent to tarnish by creating likelihood of confusion as to source, sponsorship or affiliation, or endorsement of the site.
Offer to sell the domain name without having used, or having an intent to use, it in the bona fide offering of goods and services, or a prior pattern of such conduct.
Intentional provision of misleading contact information in the domain name registration application or the history of such conduct.
Warehousing of multiple domain names known to be identical or confusingly similar to distinctive marks or dilutive of famous marks, without regard to the goods or services of the parties.
The extent to which a mark is distinctive or famous. 15 U.S.C.A. §1125 (d)(B)(i)(I)-(IX).
These factors are not exclusive. In addition, a court may consider other factors or evidence that it deems relevant to the issue of bad faith. Nevertheless, the ACPA does specifically provide that, where a person believed or had reasonable grounds to believe that the use of a domain name was a fair or otherwise lawful use, a court cannot find bad faith intent, and therefore, there can be no violation of the ACPA. 15 U.S.C.A. §1125 (d)(B)(ii).
Furthermore, while there a number of factors that a court may consider, most courts that have placed particular emphasis on the factors codified in the ACPA which, prior to its passage, were traditionally considered in the analysis of trademark infringement actions. The more significant factors, as can be seen by their emphasis in the above listed factors, have traditionally been confusion/diversion of consumers, bad faith intent, commercial use and the “creative works” exception.
Background of the ACPA
The “cybersquatting law was passed to meet problems that grew out of the sudden emergence of alphanumeric domain names as a means of locating content on the Internet. Originally, each site on the Internet was identified only by a series of four number sets, such as 156.121.20.201. In the late 1980's, the concept of the alphanumeric domain name was invented, allowing the operator of a web site to use an address that expressed something about the site. See, 51 F. Supp.2d 389, 391-392 (S.D.N.Y. 1999), 202 F.3d 573 (2d Cir. 2000). Domain names may either denote the topic of the web page, or it may identify the person who sponsors the web page.
Some people had the foresight to reserve domain names that they, themselves, did not intend to use, recognizing that in coming years others might find those names particularly valuable and worth considerable sums of money[9]. The system for assigning domain names is that the first person to register a name can keep it, to the exclusion of anybody else, as long as s/he pays annual renewal fees for each such name. Consequently, there was a veritable land rush as individuals and companies snapped up as many domain names as they could, intending to market names to those who might want them. As a result, by the time that it occurred to many companies that it would be in their interest to advertise their goods and services on the Internet, they found that others had beaten them to the domain name registrar's door. Such companies found themselves having to pay others who had “squatted” on their cybernames. House Report 106-412, 106th Cong. 1st Sess. (1999), at 5-6.
The Committee Reports identify a series of ways in which cybersquatters unfairly used the trademarks of others. Senate Report 106-140, 106th Cong. 1st Sess. (1999), at 5-7. Some actually registered the trademark itself as the domain name[10]. Others would register the trademark name with minor spelling errors, intending to catch a careless consumer who mistyped the trademark as part of the domain name[11]. Still others would register a domain name combining the domain name with some other word that made it appear to be part of the company[12]. But there is not the slightest hint in the reports, or anywhere else in the legislative history, that Congress intended to prevent the registration of domain names that plainly implied hostility to the trademark holder, such as “verizonsucks.com.” To the contrary, both the Senate and the House Committees repeatedly insisted that companies would not be able to bring lawsuits against people who established web sites using trade names for the purpose of commenting upon or criticizing companies to which those trademarks belonged. House Report at 10, 11; Senate Report at 14.
Even before the amendment, companies brought lawsuits based on their trademark rights. But some courts refused to grant relief against cybersquatters who did no more than register domain names, reasoning that mere registration of a domain name is not "commercial use" as required for trademark liability. 189 F.3d 868, 879-880 (9th Cir. 1999); Senate Report 106-140, at 7. The cybersquatting law has made it possible to sue based solely on the registration of a “cybersquatted” name, so long as it was done, in theory, with intent to profit from another's good will.
Remedies Under the ACPA
The ACPA provides the traditional trademark infringement remedies of injunctive relief, the defendant’s profits, actual damages and costs. Additionally, a court, in its discretion, may also award statutory damages, over and above the other damages, in an amount ranging from $1,000 to $100,000 for each infringing domain name. The injured party may also recover attorney’s fees, in the court’s discretion.
Of crucial importance, the ACPA can provide the injured party with in rem jurisdiction over the domain name where that party cannot with due diligence obtain personal jurisdiction over the defendant. In rem jurisdiction is no mere legal technicality; it permits the trademark owner to obtain forfeiture, cancellation or transfer of the infringing domain name simply by filing the action against the domain named, as opposed to the cybersquatter himself. In rem jurisdiction is an important time and cost effective mechanism where the cybersquatter is either a “fly-by-night” that cannot be found or a foreign entity. The trademark owner can file a lawsuit against a variety of infringing domain names (whether or not owned by different parties) and, if successful, can obtain an immediate transfer of those domain names from the cybersquatter to the trademark owner. An in rem proceeding can be brought in the judicial district where the domain name register, registry or other domain name authority is located or where documents sufficient to establish control and authority regarding the disposition of the registration are deposited with the court. 15 U.S.C.A. §1125 (d)(2)(A)
In addition, another important aspect of the legislation is hidden in the legislative history. The way the bill is currently written, the factors for determining bad faith can be applied by the domain name registrar. Thus, in an effort to provide less expensive and timely legal remedies, the legislation allows the registrar to fill the shoes of a court in determining bad faith and exempts them from liability if they so do. If the registrar decides against the domain name holder, the domain name holder will have no recourse against the registrar, who is not liable for bad faith. 15 U.S.C.A. §1125 (D)(ii)
In concept, then, the ACPA offers significant additional protection to trademark owners which did not exist prior to its passing. Trademark owners have taken immediate advantage of the new law. Less than two weeks after the bill was signed into law, three lawsuits were filed under the Act. In California, New Zealand’s “America’s Cup” obtained a temporary injunction under the ACPA, which prevented the defendants who registered the “AmericasCup.com” domain name from using it for a website. Harvard University filed a suit against two defendants who attempted to auction off a number of domain names containing Harvard marks. In New York, the National Football League sued an alleged cybersquatter for his registration and use of the domain names “NFLtoday.com”, “NFLtoday.net”, and “NFLtoday.org”. See National Football League v. Miller, 200 W.L. 33566, 54 .S.P.Q. 2d 1574 (S.D.N.Y. 1999).
Problematic Scope of the ACPA
There are several issues that could arise as to the scope of the new law's protection. To begin with, ACPA requires that the cybersquatter act with “bad faith intent”. ACPA states that a party who has "reasonable grounds to believe" that its use was fair or otherwise lawful does not act in bad faith. This exclusion provides cybersquatters with an opportunity to create a factual issue as to whether it reasonably believed its use was fair or lawful.
To the contrary, if a person innocently attempts to register with the Patent and Trademark Office a trademark which is identical or confusingly similar to an existing party's trademark, the existing trademark's owner can oppose and foreclose the new registration, even though it was made in good faith.
However, while an innocent infringement of a trademark can be permanently enjoined under a traditional trademark action, it appears from the statutory language that a trademark owner whose mark has been registered as part of a domain name, if done in good faith (or the infringing party had reasonable grounds to believe the use was lawful), cannot bring a successful claim under ACPA. Instead, due to the ACPA’s two-pronged test and the factors which the court must use to evaluate the case, the trademark owner must wait until the domain name owner actually makes commercial use of the name on the Internet or until there is an attempt by the domain name owner to sell the trademark.
While ACPA broadens the application of the law to cybersquatting in general, it also applies to a person who registers or traffics in a domain name that is identical or confusingly similar to a protected mark, but also to an individual who merely uses a domain name that is identical or confusingly similar to a protected mark. See Edward T. Dartley, Pulling the Plug on Cybersquatters, 161 N.J. L.J. 270, 270 note 33 (2000).
First Amendment Implications of ACPA
Until now, the Lanham Act only protected against infringement when a commercial use was involved. Several trademark owners had commenced lawsuits against traditional cybersquatters under the Lanham Act, but a number of courts held that, because the defendants in those cases merely registered domain names and nothing more, there had been no requisite commercial use of the marks in the sale or advertising of goods or services under the Lanham Act, and therefore, no infringement.
However, as stated supra, corporations and politicians began to seek cybersquatting remedies against registered domain names in which average citizens voiced dissent or dissatisfaction with the company or politician. One of the first cases in which a plaintiff sought to utilize the ACPA to enjoin a private citizen from using its mark on a website was Alitala-Linee Aeree Italiane S.P.S. v. William Porta, 00 Civ. 9731 (S.D.N.Y. 2000).
The Alitalia Case
This case arose out of a dispute between plaintiff Alitalia and defendant William Porta, one of its former customers. Porta flew on Alitalia to India to be the best man at a friend's multi-day wedding. Porta’s luggage, containing formal clothing that he needed for the wedding, was lost in transit. Porta was repeatedly promised, by Alitalia, that he would receive recompense, in various forms, and these promises were not kept. In addition, because he was initially told that his baggage had been found and would be sent to him promptly, he postponed buying new formal clothing and hence had to attend wedding ceremonies in the inappropriate attire in which he had traveled. Porta ultimately wrote a letter to Alitalia, dated October 26, 2000, detailing his concerns. Id.
Porta registered the name www.alitaliasucks.com on December 10, 2000, and used it to publish his October 26 letter. The web site, according to the facts as set forth in the hearing for the temporary injunction, was non-commercial - it carried no advertising, sold no goods, and it did not link to any commercial sites. Id. Alitalia learned of the site on December 12 and subsequently proposed to pay Porta a small portion of what he thought he had been promised, with payment to be sent in another month. Alitalia explained its small payment by invoking the Warsaw Convention[13], but it made no excuse for failing to honor its alleged prior promises of higher and immediate payment. When Porta refused to remove his web site for this new promise of smaller payment at a later date, Alitalia filed a suit seeking to enjoin Porta from continuing to publish his criticisms on the Internet. Alitalia was granted a preliminary injunction, which forced Porta to shut down his website. Id.
Alitalia’s theory was that, because “alitaliasucks” contains “alitalia,” consumers would be misled into visiting and staying at Porta’s web site because they may believe that it was sponsored by Alitalia. Porta’s position was that, to be sure, consumers sometimes try to find a company’s site on the Internet by typing the sequence “www.companyname.com” into their web browsers; however, few people, if any, look for a company by going to “www.companynamesucks.com.” Although the use of the word “alitalia” on his web page and as part of the domain name might draw consumers through a search engine, that is because consumers use search engines to look for a variety of information about companies, and not simply in order to do business with them. Any consumer finding Porta’s web site in a search engine’s list of relevant sites would see a description sufficient to inform him or her that his was a critical site, and not one sponsored by Alitalia. Id.
After months of litigation following the airline’s suit for, inter alia, trademark infringement, Alitalia dropped the suit shortly after a judge demanded that a top company official, such as the President, come to court to explain why the company brought the case.
Enforcement of Alitalia’s claims would have violated the First Amendment. In trademark cases, unlike copyright cases where fair use is co-extensive with the First Amendment, e.g., Harper & Row v. Nation Enterprises, 471 U.S. 539, 560 (1985), First Amendment considerations routinely receive separate discussion, although they also inform statutory interpretation. Where, as is true in Alitalia, the defendant was engaged in non-commercial speech, the mere application of trademark law may violate the First Amendment, L.L. Bean v. Drake Publishers, 811 F.2d 26, 32-33 (1st Cir. 1987). Even if a trademark has been used in a commercial context, courts are required to construe the trademark laws narrowly to avoid impingement on First Amendment rights, e.g., Cliffs Notes v. Bantam Doubleday, 886 F.2d 490, 494 (2d Cir. 1989); First Amendment interests are weighed as a factor in deciding whether a trademark violation should be found, e.g., Anheuser-Busch v. Balducci Publications, 28 F.3d 769, 776 (8th Cir. 1994); and injunctions must be narrowly crafted to comply with the general and virtually absolute rule against prior restraints of speech. Id. at 778; Better Business Bureau v. Medical Directors, 681 F.2d 397, 404-405 (5th Cir. 1982). The new cybersquatting law contained a savings clause that expressly preserves all defenses under the First Amendment. Public Law 106-113, Section 3008, 113 STAT. 1501A-551. Thus, despite the general principle that requires a court to consider statutory issues first, thus avoiding the need to decide constitutional issues, the locus in quo of these type of cases is the First Amendment. In an action against a cybergriper, the action to enforce a trademark implicates the First Amendment even though plaintiff is not a government actor. An injunction sought by private parties is still government action by a court, which is therefore subject to scrutiny under the First Amendment. Shelly v. Kraemer, 334 U.S. 1, 14-15 (1948); see also, Proctor and Gamble Co. v. Banker’s Trust Co., 78 F.3d 219, 224-225 (6th Cir. 1996).
These factors are not exclusive. In addition, a court may consider other factors or evidence that it deems relevant to the issue of bad faith. Nevertheless, the ACPA does specifically provide that, where a person believed or had reasonable grounds to believe that the use of a domain name was a fair or otherwise lawful use, a court cannot find bad faith intent, and therefore, there can be no violation of the ACPA. 15 U.S.C.A. §1125 (d)(B)(ii).
Furthermore, while there a number of factors that a court may consider, most courts that have placed particular emphasis on the factors codified in the ACPA which, prior to its passage, were traditionally considered in the analysis of trademark infringement actions. The more significant factors, as can be seen by their emphasis in the above listed factors, have traditionally been confusion/diversion of consumers, bad faith intent, commercial use and the “creative works” exception.
Background of the ACPA
The “cybersquatting law was passed to meet problems that grew out of the sudden emergence of alphanumeric domain names as a means of locating content on the Internet. Originally, each site on the Internet was identified only by a series of four number sets, such as 156.121.20.201. In the late 1980's, the concept of the alphanumeric domain name was invented, allowing the operator of a web site to use an address that expressed something about the site. See, 51 F. Supp.2d 389, 391-392 (S.D.N.Y. 1999), 202 F.3d 573 (2d Cir. 2000). Domain names may either denote the topic of the web page, or it may identify the person who sponsors the web page.
Some people had the foresight to reserve domain names that they, themselves, did not intend to use, recognizing that in coming years others might find those names particularly valuable and worth considerable sums of money[9]. The system for assigning domain names is that the first person to register a name can keep it, to the exclusion of anybody else, as long as s/he pays annual renewal fees for each such name. Consequently, there was a veritable land rush as individuals and companies snapped up as many domain names as they could, intending to market names to those who might want them. As a result, by the time that it occurred to many companies that it would be in their interest to advertise their goods and services on the Internet, they found that others had beaten them to the domain name registrar's door. Such companies found themselves having to pay others who had “squatted” on their cybernames. House Report 106-412, 106th Cong. 1st Sess. (1999), at 5-6.
The Committee Reports identify a series of ways in which cybersquatters unfairly used the trademarks of others. Senate Report 106-140, 106th Cong. 1st Sess. (1999), at 5-7. Some actually registered the trademark itself as the domain name[10]. Others would register the trademark name with minor spelling errors, intending to catch a careless consumer who mistyped the trademark as part of the domain name[11]. Still others would register a domain name combining the domain name with some other word that made it appear to be part of the company[12]. But there is not the slightest hint in the reports, or anywhere else in the legislative history, that Congress intended to prevent the registration of domain names that plainly implied hostility to the trademark holder, such as “verizonsucks.com.” To the contrary, both the Senate and the House Committees repeatedly insisted that companies would not be able to bring lawsuits against people who established web sites using trade names for the purpose of commenting upon or criticizing companies to which those trademarks belonged. House Report at 10, 11; Senate Report at 14.
Even before the amendment, companies brought lawsuits based on their trademark rights. But some courts refused to grant relief against cybersquatters who did no more than register domain names, reasoning that mere registration of a domain name is not "commercial use" as required for trademark liability. 189 F.3d 868, 879-880 (9th Cir. 1999); Senate Report 106-140, at 7. The cybersquatting law has made it possible to sue based solely on the registration of a “cybersquatted” name, so long as it was done, in theory, with intent to profit from another's good will.
Remedies Under the ACPA
The ACPA provides the traditional trademark infringement remedies of injunctive relief, the defendant’s profits, actual damages and costs. Additionally, a court, in its discretion, may also award statutory damages, over and above the other damages, in an amount ranging from $1,000 to $100,000 for each infringing domain name. The injured party may also recover attorney’s fees, in the court’s discretion.
Of crucial importance, the ACPA can provide the injured party with in rem jurisdiction over the domain name where that party cannot with due diligence obtain personal jurisdiction over the defendant. In rem jurisdiction is no mere legal technicality; it permits the trademark owner to obtain forfeiture, cancellation or transfer of the infringing domain name simply by filing the action against the domain named, as opposed to the cybersquatter himself. In rem jurisdiction is an important time and cost effective mechanism where the cybersquatter is either a “fly-by-night” that cannot be found or a foreign entity. The trademark owner can file a lawsuit against a variety of infringing domain names (whether or not owned by different parties) and, if successful, can obtain an immediate transfer of those domain names from the cybersquatter to the trademark owner. An in rem proceeding can be brought in the judicial district where the domain name register, registry or other domain name authority is located or where documents sufficient to establish control and authority regarding the disposition of the registration are deposited with the court. 15 U.S.C.A. §1125 (d)(2)(A)
In addition, another important aspect of the legislation is hidden in the legislative history. The way the bill is currently written, the factors for determining bad faith can be applied by the domain name registrar. Thus, in an effort to provide less expensive and timely legal remedies, the legislation allows the registrar to fill the shoes of a court in determining bad faith and exempts them from liability if they so do. If the registrar decides against the domain name holder, the domain name holder will have no recourse against the registrar, who is not liable for bad faith. 15 U.S.C.A. §1125 (D)(ii)
In concept, then, the ACPA offers significant additional protection to trademark owners which did not exist prior to its passing. Trademark owners have taken immediate advantage of the new law. Less than two weeks after the bill was signed into law, three lawsuits were filed under the Act. In California, New Zealand’s “America’s Cup” obtained a temporary injunction under the ACPA, which prevented the defendants who registered the “AmericasCup.com” domain name from using it for a website. Harvard University filed a suit against two defendants who attempted to auction off a number of domain names containing Harvard marks. In New York, the National Football League sued an alleged cybersquatter for his registration and use of the domain names “NFLtoday.com”, “NFLtoday.net”, and “NFLtoday.org”. See National Football League v. Miller, 200 W.L. 33566, 54 .S.P.Q. 2d 1574 (S.D.N.Y. 1999).
Problematic Scope of the ACPA
There are several issues that could arise as to the scope of the new law's protection. To begin with, ACPA requires that the cybersquatter act with “bad faith intent”. ACPA states that a party who has "reasonable grounds to believe" that its use was fair or otherwise lawful does not act in bad faith. This exclusion provides cybersquatters with an opportunity to create a factual issue as to whether it reasonably believed its use was fair or lawful.
To the contrary, if a person innocently attempts to register with the Patent and Trademark Office a trademark which is identical or confusingly similar to an existing party's trademark, the existing trademark's owner can oppose and foreclose the new registration, even though it was made in good faith.
However, while an innocent infringement of a trademark can be permanently enjoined under a traditional trademark action, it appears from the statutory language that a trademark owner whose mark has been registered as part of a domain name, if done in good faith (or the infringing party had reasonable grounds to believe the use was lawful), cannot bring a successful claim under ACPA. Instead, due to the ACPA’s two-pronged test and the factors which the court must use to evaluate the case, the trademark owner must wait until the domain name owner actually makes commercial use of the name on the Internet or until there is an attempt by the domain name owner to sell the trademark.
While ACPA broadens the application of the law to cybersquatting in general, it also applies to a person who registers or traffics in a domain name that is identical or confusingly similar to a protected mark, but also to an individual who merely uses a domain name that is identical or confusingly similar to a protected mark. See Edward T. Dartley, Pulling the Plug on Cybersquatters, 161 N.J. L.J. 270, 270 note 33 (2000).
First Amendment Implications of ACPA
Until now, the Lanham Act only protected against infringement when a commercial use was involved. Several trademark owners had commenced lawsuits against traditional cybersquatters under the Lanham Act, but a number of courts held that, because the defendants in those cases merely registered domain names and nothing more, there had been no requisite commercial use of the marks in the sale or advertising of goods or services under the Lanham Act, and therefore, no infringement.
However, as stated supra, corporations and politicians began to seek cybersquatting remedies against registered domain names in which average citizens voiced dissent or dissatisfaction with the company or politician. One of the first cases in which a plaintiff sought to utilize the ACPA to enjoin a private citizen from using its mark on a website was Alitala-Linee Aeree Italiane S.P.S. v. William Porta, 00 Civ. 9731 (S.D.N.Y. 2000).
The Alitalia Case
This case arose out of a dispute between plaintiff Alitalia and defendant William Porta, one of its former customers. Porta flew on Alitalia to India to be the best man at a friend's multi-day wedding. Porta’s luggage, containing formal clothing that he needed for the wedding, was lost in transit. Porta was repeatedly promised, by Alitalia, that he would receive recompense, in various forms, and these promises were not kept. In addition, because he was initially told that his baggage had been found and would be sent to him promptly, he postponed buying new formal clothing and hence had to attend wedding ceremonies in the inappropriate attire in which he had traveled. Porta ultimately wrote a letter to Alitalia, dated October 26, 2000, detailing his concerns. Id.
Porta registered the name www.alitaliasucks.com on December 10, 2000, and used it to publish his October 26 letter. The web site, according to the facts as set forth in the hearing for the temporary injunction, was non-commercial - it carried no advertising, sold no goods, and it did not link to any commercial sites. Id. Alitalia learned of the site on December 12 and subsequently proposed to pay Porta a small portion of what he thought he had been promised, with payment to be sent in another month. Alitalia explained its small payment by invoking the Warsaw Convention[13], but it made no excuse for failing to honor its alleged prior promises of higher and immediate payment. When Porta refused to remove his web site for this new promise of smaller payment at a later date, Alitalia filed a suit seeking to enjoin Porta from continuing to publish his criticisms on the Internet. Alitalia was granted a preliminary injunction, which forced Porta to shut down his website. Id.
Alitalia’s theory was that, because “alitaliasucks” contains “alitalia,” consumers would be misled into visiting and staying at Porta’s web site because they may believe that it was sponsored by Alitalia. Porta’s position was that, to be sure, consumers sometimes try to find a company’s site on the Internet by typing the sequence “www.companyname.com” into their web browsers; however, few people, if any, look for a company by going to “www.companynamesucks.com.” Although the use of the word “alitalia” on his web page and as part of the domain name might draw consumers through a search engine, that is because consumers use search engines to look for a variety of information about companies, and not simply in order to do business with them. Any consumer finding Porta’s web site in a search engine’s list of relevant sites would see a description sufficient to inform him or her that his was a critical site, and not one sponsored by Alitalia. Id.
After months of litigation following the airline’s suit for, inter alia, trademark infringement, Alitalia dropped the suit shortly after a judge demanded that a top company official, such as the President, come to court to explain why the company brought the case.
Enforcement of Alitalia’s claims would have violated the First Amendment. In trademark cases, unlike copyright cases where fair use is co-extensive with the First Amendment, e.g., Harper & Row v. Nation Enterprises, 471 U.S. 539, 560 (1985), First Amendment considerations routinely receive separate discussion, although they also inform statutory interpretation. Where, as is true in Alitalia, the defendant was engaged in non-commercial speech, the mere application of trademark law may violate the First Amendment, L.L. Bean v. Drake Publishers, 811 F.2d 26, 32-33 (1st Cir. 1987). Even if a trademark has been used in a commercial context, courts are required to construe the trademark laws narrowly to avoid impingement on First Amendment rights, e.g., Cliffs Notes v. Bantam Doubleday, 886 F.2d 490, 494 (2d Cir. 1989); First Amendment interests are weighed as a factor in deciding whether a trademark violation should be found, e.g., Anheuser-Busch v. Balducci Publications, 28 F.3d 769, 776 (8th Cir. 1994); and injunctions must be narrowly crafted to comply with the general and virtually absolute rule against prior restraints of speech. Id. at 778; Better Business Bureau v. Medical Directors, 681 F.2d 397, 404-405 (5th Cir. 1982). The new cybersquatting law contained a savings clause that expressly preserves all defenses under the First Amendment. Public Law 106-113, Section 3008, 113 STAT. 1501A-551. Thus, despite the general principle that requires a court to consider statutory issues first, thus avoiding the need to decide constitutional issues, the locus in quo of these type of cases is the First Amendment. In an action against a cybergriper, the action to enforce a trademark implicates the First Amendment even though plaintiff is not a government actor. An injunction sought by private parties is still government action by a court, which is therefore subject to scrutiny under the First Amendment. Shelly v. Kraemer, 334 U.S. 1, 14-15 (1948); see also, Proctor and Gamble Co. v. Banker’s Trust Co., 78 F.3d 219, 224-225 (6th Cir. 1996).
APPLICATION OF THE TWO PRONGED TEST AND ITS FACTORS
Given the ACPA’s two-pronged test, clearly a “bad faith intent to profit” and use of a “confusing mark” are the most prominent elements for analysis in an ACPA action. However, as will be discussed infra, since the Lanham Act preserves all First Amendment defenses in trademark cases, including those litigated pursuant to the ACPA, commercial use will be addressed first.
Commercial Use
In many cases, the courts have struggled with the question of whether a particular use of trademarks constituted commercial or non-commercial speech. This question is significant not only because Congress limited the application of section 43 of the Lanham Act to cases of commercial speech, see sections 43(a)(1)(B) and 43(c)(4)(B), 15 U.S.C. §§ 1125(a)(1)(B), 1125(c)(4)(B), but also because commercial speech, although protected by the First Amendment, has a lesser status than non-commercial speech, and thus does not benefit from all of the doctrines developed to protect non-commercial speech. Dun & Bradstreet v. Greenmoss Bldrs., 472 U.S. 749, 762-763 (1985). Indeed, recognition that the First Amendment would bar claims for false statements in non-commercial speech underlay Congress' establishment of the "commercial" requirement in section 43. Semco v. Amcast, 52 F.3d 108, 111-112 (6th Cir. 1995) (quoting extensively from the legislative history).
Commercial Use
In many cases, the courts have struggled with the question of whether a particular use of trademarks constituted commercial or non-commercial speech. This question is significant not only because Congress limited the application of section 43 of the Lanham Act to cases of commercial speech, see sections 43(a)(1)(B) and 43(c)(4)(B), 15 U.S.C. §§ 1125(a)(1)(B), 1125(c)(4)(B), but also because commercial speech, although protected by the First Amendment, has a lesser status than non-commercial speech, and thus does not benefit from all of the doctrines developed to protect non-commercial speech. Dun & Bradstreet v. Greenmoss Bldrs., 472 U.S. 749, 762-763 (1985). Indeed, recognition that the First Amendment would bar claims for false statements in non-commercial speech underlay Congress' establishment of the "commercial" requirement in section 43. Semco v. Amcast, 52 F.3d 108, 111-112 (6th Cir. 1995) (quoting extensively from the legislative history).
Thus, when one company has, in the course of an advertising campaign, made statements about another company's products, the courts in cases like Semco have hammered out a multi-factor test to determine when the statements are non-commercial, and thus entitled to full First Amendment protection, or commercial, and thus entitled only to have their First Amendment interests weighed as part of a fair use or fair commentary defense. Similarly, when a seller of T-shirts or some other commercial product spoofs a trademark or uses a trademark to denounce a political position, the courts have had to decide whether the alleged infringer or diluter is predominantly engaged in commentary, thus obtaining greater protection under the First Amendment, or mainly making use of a trademark to sell its own product[14]. However, when an action is brought against a plainly non-commercial use of a trademark for either political or consumer commentary, the courts have not hesitated to afford full First Amendment protection against the trademark holder's claim, either by holding that First Amendment principles bar application of the federal statute, or by holding that the state law in question is unconstitutional on its face or as applied to the particular case[15].
“Section 1125”
Section 1125 applies only if the griper made use of the trademark party’s name “in commerce” and specifically exempts all “noncommercial use of a mark” from the ambit of section 1125. Section 1125(c)(4)(B)[16]. Specifically, Congress expressly shielded non-commercial and consumer criticism from the coverage of the entire Lanham Act. Section 43(c)(4) of the Lanham Act, 15 U.S.C. § 1125(c), provides, “The following shall not be actionable under this section: . . . (B) Noncommercial use of the mark (C) All forms of news reporting and news commentary.” The House Judiciary Committee explained that its purpose was to ensure that non-commercial speech would not be affected:
“Section 1125”
Section 1125 applies only if the griper made use of the trademark party’s name “in commerce” and specifically exempts all “noncommercial use of a mark” from the ambit of section 1125. Section 1125(c)(4)(B)[16]. Specifically, Congress expressly shielded non-commercial and consumer criticism from the coverage of the entire Lanham Act. Section 43(c)(4) of the Lanham Act, 15 U.S.C. § 1125(c), provides, “The following shall not be actionable under this section: . . . (B) Noncommercial use of the mark (C) All forms of news reporting and news commentary.” The House Judiciary Committee explained that its purpose was to ensure that non-commercial speech would not be affected:
[T]he proposed change in Section 43(a) should not be read in any way to limit political speech, consumer or editorial comment, parodies, satires, or other constitutionally protected material. . . . The section is narrowly drafted to encompass only clearly false and misleading commercial speech. 135 Cong. Rec. H1207, H1217 (daily ed., April 13, 1989)).
Similarly, when Congress enacted the cybersquatting law to address the problem of domain names that abuse the rights of trademark holders, it incorporated that law into the Lanham Act as subsection 43(d), 15 U.S.C. § 1125(d), where it is covered by the exclusion of noncommercial and consumer commentary, which applies to everything in “this section.” Further, Congress included a savings clause explicitly providing that the cybersquatting law would not override either the First Amendment or section 43(c)(4) of the Lanham Act, thus preserving all First Amendment defenses. Public Law 106-113, Section 3008, 113 Stat. 1501A-551. The sponsors of the cybersquatting law specifically disclaimed any intention to provide a cause of action against persons who registered domain names for the purpose of delivering comment or criticisms of trademark owners by identifying the owners with their marks. See House Report 106-412, 106th Cong. 1st Sess. (1999), at 10.
Similarly, when Congress enacted the cybersquatting law to address the problem of domain names that abuse the rights of trademark holders, it incorporated that law into the Lanham Act as subsection 43(d), 15 U.S.C. § 1125(d), where it is covered by the exclusion of noncommercial and consumer commentary, which applies to everything in “this section.” Further, Congress included a savings clause explicitly providing that the cybersquatting law would not override either the First Amendment or section 43(c)(4) of the Lanham Act, thus preserving all First Amendment defenses. Public Law 106-113, Section 3008, 113 Stat. 1501A-551. The sponsors of the cybersquatting law specifically disclaimed any intention to provide a cause of action against persons who registered domain names for the purpose of delivering comment or criticisms of trademark owners by identifying the owners with their marks. See House Report 106-412, 106th Cong. 1st Sess. (1999), at 10.
Thus, to prevail on an infringement claim under section 1125, a trademark party must demonstrate that a griper’s website was commercial. If a griper’s website does not sell any goods or services and it expressly states that it is a noncommercial site intended to educate consumers about the trademark party then the website is not commercial.
But in several cases trademark parties have argued that the Internet itself is sufficiently “in commerce” to permit Congress to regulate a griper’s website pursuant to its Commerce Clause power. (site Crown case). Indeed, the Internet generally, and individual websites specifically, could be regulated by Congress pursuant to its Commerce Clause power.
However, the only relevant question is whether Congress intended section 1125 to reach any and all activity on which it is constitutionally empowered to legislate. Congress clearly did not. Section 1125(c)(4)(B)’s noncommercial-use exception ensures that “’parody, satire, editorial and other forms of expression that are not part of a commercial transaction’” and thus are not subject to suit under that provision. Dr. Suess Enterprises v. Penguin Books USA, 924 F. Supp. 1559, 1574 (S.D. Cal. 1996), aff’d, 109 F.3d 1394 (9th Cir. 1997) (quoting statement of Senator Hatch, 141 Cong. Rec. S19310 (daily ed. Dec. 29, 1995)). As the court in Dr. Suess Enterprises explained, “an expressive use is not rendered commercial by the impact of use on sales.” Id.
Moreover, in 1988, Congress defined the phrase “use in commerce” with the express purpose of limiting its scope to use in the ordinary course of trade. As Congress explained, “Amendment of the definition of ‘use in commerce’ [in Section 45 of the Lanham Act] is one of the most far-reaching changes the legislation contains . . . . The committee intends that the revised definition of ‘use in commerce’ be interpreted to mean commercial use which is typical in a particular industry.” Sen. Rep. 100-515, 100th Cong., 2d Sess. 44 (1988). Congress could not have been clearer in stating that section 1125 applies only to commercial use of another’s mark, and not to any use that Congress could conceivably regulate pursuant to its Commerce Clause power. See, e.g., Licata & Co. v. Goldberg, 812 F. Supp. 403, 409 (S.D.N.Y. 1993) (holding that the Lanham Act “does not extend to the full outer limits of the commerce power”). Because Congress did not intend section 1125 to apply to non-commercial activities such as a griper’s site, a trademark party should not prevail on its claim that a griper infringed its name in the griper’s site.
“Section 1114”
Trademark infringement cases often include claims under section 1114 of the Lanham Act because, notwithstanding its jurisdictional “in commerce” requirement, Section 1114 contains no commercial activity requirement; rather, it prohibits any person from, without consent of the registrant of a mark, using the mark “in connection with the sale, offering for sale, distribution, or advertising of any good or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.” The question the Court must decide, then, is whether defendant’s use of plaintiff’s mark is properly viewed as in connection with the distribution or advertising of goods or services. Generally speaking, a website that would be found to be connected with the advertising of goods or services would most likely be found to be a commercial site. Furthermore, if such a site were not found to be commercial, Section 1114 is limited to federally registered trademarks.
Confusion / Diversion
“Evidence Of Confusion”
If a court finds a griper’s website is commercial in nature, to prevail in an infringement action, a trademark party must show that an “appreciable number of ordinarily prudent” customers would be “misled” or “confused” as to the source of the griper’s web site. Thompson Medical co. , Inc. v. Pfizer, 753 F.2d 208, 213 (2d Cir. 1985). Furthermore, even if some customers initially believed” that a griper’s site was the trademark party’s official site, an “initial belief” is not equivalent to confusion regarding source. See The Network Network v. CBS, 54 U.S.P.Q.2d 1150, 1155 (C.D. Cal. 2000) (“There is a difference between inadvertently landing on a website and being confused.”); Choice Hotels International v. Kaushik, 147 F. Supp.2d 1242, 1254-1255 (M.D. Ala. 2000) (finding no confusion where the only evidence was “vague” testimony about unnamed customers” confusion).
Some courts recognize a brand of consumer confusion called “initial interest confusion” which permits a finding of a likelihood of confusion although the consumer is only initially confused and quickly becomes aware of the source's actual identity. See Planned Parenthood Fed'n of Am. Inc. v. Bucci, 1997 WL 133313, at 12 (S.D.N.Y. Mar.24, 1997), aff'd, 152 F.3d 920 (2d Cir.1998), cert. denied, 525 U.S. 834 (describing initial interest confusion). But see Teletech Customer Care Management, Inc. v. Tele-Tech Co., 977 F.Supp. 1407, 1414 (C.D.Cal.1997) (finding no likelihood of confusion existed when plaintiff “only demonstrated an initial confusion on the part of web browsers using the [plaintiff's] domain name ... but [instead] finding the Defendant's website. This brief confusion is not cognizable under the trademark laws.”).
This “initial interest confusion” has been described as a “bait” and “switch” by infringing producers to impact the “buying decisions of consumers in the market for the goods, effectively allowing the competitor to get its foot in the door by confusing consumers.” Dorr-Oliver Inc. v. Fluid-Quip Inc., 94 F.3d 376, 382 (7th Cir.1996).The court finds plaintiff's argument here unpersuasive. However, in the instances where courts have found “initial interest confusion” as an indicator of the “likelihood of confusion” element of trademark infringement, the courts have also found that the defendant had a commercial incentive or motive in using plaintiff's mark to attract “initial interest.” For example, in Name.Space, Inc. v. Network Solutions, Inc.,202 F.3d 573, (2d Cir. 2000) the plaintiff relied heavily on the Planned Parenthood case to support its argument that “initial interest” confusion is sufficient to demonstrate a likelihood of confusion.
In several cases, trademark party’s have, as did the plaintiff in Name.Space, Inc., cited Planned Parenthood Federation of America v. Bucci, 1997 U.S. Dist. LEXIS 3338 (S.D.N.Y. Mar. 24, 1997), to support the argument that a griper’s use of the trademark party’s name in the domain name is not protected by the First Amendment. In Planned Parenthood[17] the court found that the defendant stood to benefit commercially on two bases: (1) defendant was using the “bogus” web site to further sales of a book; and (2) defendant’s nonprofit anti-abortion group stood to commercially benefit through the solicitation of funds by diverting users from plaintiff’s site. Planned Parenthood, 1997 WL 133313, at 5. In addition, there was evidence in the record to demonstrate that Internet users were being diverted from visiting Planned Parenthood’s web site. Id. at 4. Based on that evidence, the court determined that defendant’s actions were commercially harming plaintiff. Id. at 4.
But in several cases trademark parties have argued that the Internet itself is sufficiently “in commerce” to permit Congress to regulate a griper’s website pursuant to its Commerce Clause power. (site Crown case). Indeed, the Internet generally, and individual websites specifically, could be regulated by Congress pursuant to its Commerce Clause power.
However, the only relevant question is whether Congress intended section 1125 to reach any and all activity on which it is constitutionally empowered to legislate. Congress clearly did not. Section 1125(c)(4)(B)’s noncommercial-use exception ensures that “’parody, satire, editorial and other forms of expression that are not part of a commercial transaction’” and thus are not subject to suit under that provision. Dr. Suess Enterprises v. Penguin Books USA, 924 F. Supp. 1559, 1574 (S.D. Cal. 1996), aff’d, 109 F.3d 1394 (9th Cir. 1997) (quoting statement of Senator Hatch, 141 Cong. Rec. S19310 (daily ed. Dec. 29, 1995)). As the court in Dr. Suess Enterprises explained, “an expressive use is not rendered commercial by the impact of use on sales.” Id.
Moreover, in 1988, Congress defined the phrase “use in commerce” with the express purpose of limiting its scope to use in the ordinary course of trade. As Congress explained, “Amendment of the definition of ‘use in commerce’ [in Section 45 of the Lanham Act] is one of the most far-reaching changes the legislation contains . . . . The committee intends that the revised definition of ‘use in commerce’ be interpreted to mean commercial use which is typical in a particular industry.” Sen. Rep. 100-515, 100th Cong., 2d Sess. 44 (1988). Congress could not have been clearer in stating that section 1125 applies only to commercial use of another’s mark, and not to any use that Congress could conceivably regulate pursuant to its Commerce Clause power. See, e.g., Licata & Co. v. Goldberg, 812 F. Supp. 403, 409 (S.D.N.Y. 1993) (holding that the Lanham Act “does not extend to the full outer limits of the commerce power”). Because Congress did not intend section 1125 to apply to non-commercial activities such as a griper’s site, a trademark party should not prevail on its claim that a griper infringed its name in the griper’s site.
“Section 1114”
Trademark infringement cases often include claims under section 1114 of the Lanham Act because, notwithstanding its jurisdictional “in commerce” requirement, Section 1114 contains no commercial activity requirement; rather, it prohibits any person from, without consent of the registrant of a mark, using the mark “in connection with the sale, offering for sale, distribution, or advertising of any good or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.” The question the Court must decide, then, is whether defendant’s use of plaintiff’s mark is properly viewed as in connection with the distribution or advertising of goods or services. Generally speaking, a website that would be found to be connected with the advertising of goods or services would most likely be found to be a commercial site. Furthermore, if such a site were not found to be commercial, Section 1114 is limited to federally registered trademarks.
Confusion / Diversion
“Evidence Of Confusion”
If a court finds a griper’s website is commercial in nature, to prevail in an infringement action, a trademark party must show that an “appreciable number of ordinarily prudent” customers would be “misled” or “confused” as to the source of the griper’s web site. Thompson Medical co. , Inc. v. Pfizer, 753 F.2d 208, 213 (2d Cir. 1985). Furthermore, even if some customers initially believed” that a griper’s site was the trademark party’s official site, an “initial belief” is not equivalent to confusion regarding source. See The Network Network v. CBS, 54 U.S.P.Q.2d 1150, 1155 (C.D. Cal. 2000) (“There is a difference between inadvertently landing on a website and being confused.”); Choice Hotels International v. Kaushik, 147 F. Supp.2d 1242, 1254-1255 (M.D. Ala. 2000) (finding no confusion where the only evidence was “vague” testimony about unnamed customers” confusion).
Some courts recognize a brand of consumer confusion called “initial interest confusion” which permits a finding of a likelihood of confusion although the consumer is only initially confused and quickly becomes aware of the source's actual identity. See Planned Parenthood Fed'n of Am. Inc. v. Bucci, 1997 WL 133313, at 12 (S.D.N.Y. Mar.24, 1997), aff'd, 152 F.3d 920 (2d Cir.1998), cert. denied, 525 U.S. 834 (describing initial interest confusion). But see Teletech Customer Care Management, Inc. v. Tele-Tech Co., 977 F.Supp. 1407, 1414 (C.D.Cal.1997) (finding no likelihood of confusion existed when plaintiff “only demonstrated an initial confusion on the part of web browsers using the [plaintiff's] domain name ... but [instead] finding the Defendant's website. This brief confusion is not cognizable under the trademark laws.”).
This “initial interest confusion” has been described as a “bait” and “switch” by infringing producers to impact the “buying decisions of consumers in the market for the goods, effectively allowing the competitor to get its foot in the door by confusing consumers.” Dorr-Oliver Inc. v. Fluid-Quip Inc., 94 F.3d 376, 382 (7th Cir.1996).The court finds plaintiff's argument here unpersuasive. However, in the instances where courts have found “initial interest confusion” as an indicator of the “likelihood of confusion” element of trademark infringement, the courts have also found that the defendant had a commercial incentive or motive in using plaintiff's mark to attract “initial interest.” For example, in Name.Space, Inc. v. Network Solutions, Inc.,202 F.3d 573, (2d Cir. 2000) the plaintiff relied heavily on the Planned Parenthood case to support its argument that “initial interest” confusion is sufficient to demonstrate a likelihood of confusion.
In several cases, trademark party’s have, as did the plaintiff in Name.Space, Inc., cited Planned Parenthood Federation of America v. Bucci, 1997 U.S. Dist. LEXIS 3338 (S.D.N.Y. Mar. 24, 1997), to support the argument that a griper’s use of the trademark party’s name in the domain name is not protected by the First Amendment. In Planned Parenthood[17] the court found that the defendant stood to benefit commercially on two bases: (1) defendant was using the “bogus” web site to further sales of a book; and (2) defendant’s nonprofit anti-abortion group stood to commercially benefit through the solicitation of funds by diverting users from plaintiff’s site. Planned Parenthood, 1997 WL 133313, at 5. In addition, there was evidence in the record to demonstrate that Internet users were being diverted from visiting Planned Parenthood’s web site. Id. at 4. Based on that evidence, the court determined that defendant’s actions were commercially harming plaintiff. Id. at 4.
Nevertheless, Planned Parenthood supports the argument that use of a trademark party’s name in a domain name is protected speech as long as the griper is clear that the trademark party is not the source of that website. The court explained that the defendant’s use of www.plannedparenthood.com was a violation of the Lanham Act because the defendant was not engaging in First Amendment protected speech, such as parody or criticism, but rather was using the name to create confusion about the source of the site. The court stated:
Defendant’s use of another entity’s mark is entitled to First Amendment protection when his use of that mark is part of a communicative message, not when it is used to identify the source of a product. By using the mark as a domain name and home page address and by welcoming Internet users to the home page with the message “Welcome to the Planned Parenthood Home Page!” defendant identifies the web site and home page as being the product, or forum, of plaintiff. I therefore determine that, because defendant’s use of the term “planned parenthood” is not part of a communicative message, his infringement on plaintiff’s mark is not protected by the First Amendment.
Id. at 35-36.
Thus, it is important to note that in Planned Parenthood the court held that the defendant’s particular use of the domain name “plannedparenthood.com” was as a “source identifier” rather than a “communicative message,” while leaving open the possibility that a domain name could constitute such a message under other circumstances[18]. Id.
Bad Faith Intent To Profit.
As stated supra, a trademark party must present evidence that a griper used, registered, or trafficked in the trademark party’s domain name with a “bad faith intent to profit” from use of the domain name, to prevail on a claim under the ACPA, 15 U.S.C. § 1125(d)(1)(A)(i). The Anticybersquatting Act targets individuals who register “’well-known brand names as Internet domain names’ in order to force the rightful owners of the marks ‘to pay for the right to engage in electronic commerce under their own brand name.’” Virtual Works, Inc. v. Volkswagon of America, Inc., 238 F.3d 264, 267 (4th Cir. 2001) (quoting S.Rep. No.106-140, at 5 (1999)).
For example, the defendant in E. & J. Gallo Winery v. Spider Webs Ltd., 286F.3d 270 (5th Cir. 2002), admitted to owning hundreds of domain names associated with existing businesses which he attempted to sell back to those businesses for upwards of $10,000 a piece. See also Virtual Works, 238, F.3d at 267 (Virtual Works informed Volkswagon that it would sell www.vw.net to the highest bidder).
This element is of critical importance, because for the ACPA to apply the defendant must have “a bad faith intent to profit from that mark” or a personal name as may be applicable. 35 U.S.C. § 43(d)(1)(A)(i)(emphasis added). See Harrods Ltd. v. Sixty Internet Domain Names, 110 F. Supp. 2d 420 (E.D. Va. 2000) (dismissing in rem action for failure to plead bad faith). Further, the Act does not apply to a party who is aware of the trademark status of a mark, but registers the mark for a reason other than bad faith intent to profit, even if the domain name is likely to confuse consumers. Id. (emphasis added)
The Act specifically states that courts may not find bad faith “in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.” Further, the Act enumerates nine factors to be considered by courts in determining if bad faith exists. The factors are not exclusive and none alone is dispositive: 1. The intellectual property rights of the registrant in the domain name; 2. The extent to which the domain name is the same as the registrant's own name or nickname;3. The registrant's prior use of the domain name in connection with offering goods and services;4. The registrant's noncommercial or fair use of the mark in a web site accessible under the domain name[19];5. The registrant's intent to divert customers away from the trademark owner's web site to a web site that could harm the goodwill of the owner's mark[20];6. The registrant's intent to sell the domain name rather than using it for any bona fide purpose, or a prior pattern of such conduct[21];7. The registrant's provision of material and misleading false contact information when applying for the domain name, or a prior pattern of such conduct;8. The registrant's acquisition of multiple domain names which the registrant knows are identical or confusingly similar to, or dilutive of, other's mark9. The extent to which the mark incorporated in the domain name is distinctive and famous
15 U.S.C. § 1125(c)(1).
“Diversion of Consumers through Bad Faith”
Some trademark parties have argued that that griper websites violate section 1125(d) because it is clear, by the wording or construction of the griper’s site, that the griper’s intent is to divert consumers from the trademark party’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 source, sponsorship, affiliation, or endorsement of the site[22].
This argument is quoting from one of the nine factors in section 1125(d) that a court “may consider” in making a determination about whether the defendant had a “bad faith intent to profit” in selecting its domain name. 15 U.S.C. § 1125(d)(1)(B)(i)(V). Some articles have argued that if a trademark party can show that a griper intended to tarnish or disparage its name, then it will have demonstrated that the griper violated the Anticybersquatting Act. [need cite] However, this is incorrect for three reasons.
First, as a threshold matter, the Cybersquatting Act clearly states that a griper must have a “bad faith intent to profit,” and thus a trademark party cannot satisfy the standard by showing only that the griper wished to ”tarnish or disparage” the trademark party. Second, although a griper may certainly intended to criticize a trademark party, to violate the Act the griper must do so “by creating a likelihood of confusion as to source, sponsorship, affiliation, or endorsement of the site as section 1125(d)(1)(B)(i)(V) requires. Thus, as this commentary has previously stated, if a griper goes to great effort to display prominent disclaimers throughout his site and distinguishes his site from the trademark party’s official site, then this statutory element is not met. Third, the mere fact that criticism has a tendency to make the public think less of the target of the criticism is not sufficient to make out a trademark violation. Professor McCarthy, a noted expert on trademark, makes this point in his treatise:
Criticism of a company or product
In terms of traditional free speech policy, use of a mark in a purely communicative,non-trademark setting should be permitted or else trademark law could be used as atool to stifle unwelcome discussion. For example, a newsmagazine article which criticizes a firm’s policies should be permitted to use the firm’s logo as a familiar symbol of that firm. A political cartoonist should be allowed some room to use a caricature of a character or design mark in order to make a social point about the firm that owns the mark. If the trademark is “tarnished” in such commentary, it is the result of the content of the ideas being conveyed. The main remedy of the trademark owner is not an injunction to suppress the message. As Justice Brandeis long ago stated, “If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the process of education, the remedy to be applied is more speech, not enforced silence.”
The Restatement [of Unfair Competition] takes the position that in cases where the trademark owner alleges injury to reputation from a non-trademark purely communicative use of its mark, trademark law, whether in the form of traditional infringement or dilution, should not apply. Speaking in the context of anti-dilution law, the Restatement remarks that:
The commercial value of a highly distinctive trade symbol results from the strong association of the symbol with the goods, services or business of a particular user.
When that symbol is used by others to identify a different source, the power of the mark to evoke its original association is diluted. Non-trademark uses, which do not involve a use to identify another’s goods, service or business, however, are unlikely to have this diluting effect. In most instances such uses are intended to refer back to the original trademark owner and serve to confirm rather than undermine the associational significance of the mark. The Restatement recognizes the tarnishment impact that can flow from an unfavorable communicative statement about a product or its maker, using the trademark as an identifier of the product or company. But it cautions against use of an anti-dilution law to squelch such “tarnishment,” for this raises “significant free speech concerns and duplicates existing remedies better suited to balance the relevant interests.”
J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31:148 (4th ed. 1999)(footnotes omitted).
As Professor McCarthy’s explanation makes clear, not only is a griper’s website
permissible under trademark law, it also constitutes speech protected by the First Amendment.
Creative Works Exception
In many cases, trademark parties argue that the First Amendment applies only to a griper’s use of its name in the text of a website, and does not apply to the use of its name in the domain name or meta tags of the griper’s website. See (the Crown Ballock case). That is incorrect. The use of another’s name in a domain name is analogous to the use of a trademark in the title of a creative work, to which the courts give First Amendment protection because it is part of the author’s expression, calling attention to the content of the work in question. E.g., Twin Peaks Production v. Publications Int'l, 996 F.2d 1366, 1379 (2dCir. 1993); Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989). Such speech in a website is protected so long as the griper’s website does not masquerade as the trademark party’s official website, contains prominent disclaimers, and is so clearly critical of the trademark party that no reasonable viewer of the site could believe that it is the trademark party’s official site. Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp.2d 1161, 1163-64 (D.C. Cal. 1998) (concluding that “no reasonable consumer” would believe that a website critical of plaintiff was sponsored by plaintiff).
permissible under trademark law, it also constitutes speech protected by the First Amendment.
Creative Works Exception
In many cases, trademark parties argue that the First Amendment applies only to a griper’s use of its name in the text of a website, and does not apply to the use of its name in the domain name or meta tags of the griper’s website. See (the Crown Ballock case). That is incorrect. The use of another’s name in a domain name is analogous to the use of a trademark in the title of a creative work, to which the courts give First Amendment protection because it is part of the author’s expression, calling attention to the content of the work in question. E.g., Twin Peaks Production v. Publications Int'l, 996 F.2d 1366, 1379 (2dCir. 1993); Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989). Such speech in a website is protected so long as the griper’s website does not masquerade as the trademark party’s official website, contains prominent disclaimers, and is so clearly critical of the trademark party that no reasonable viewer of the site could believe that it is the trademark party’s official site. Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp.2d 1161, 1163-64 (D.C. Cal. 1998) (concluding that “no reasonable consumer” would believe that a website critical of plaintiff was sponsored by plaintiff).
RECENT APPLICATION OF THE ACPA
Crown Pontiac, Inc. v. Ballock, 287 F.Supp.2d 1256 ( N.D.Ala.,2003) B’ham star July 10, 2002
The Preliminary Injunction was lifted in its entirety by this Court's Order of July 16, 2002, following briefs and a hearing on Ballock's Motion to Dissolve the Preliminary Injunction. By this time, Ballock had secured highly competent representation. There was no evidence that Ballock was motivated by profit, or any other commercial motive in creating his website. Moreover, there was no evidence that Crown suffered damages as a result of the website. Thus, the Preliminary Injunction never should have been issued.On September 4, 2002, the arbitrator ruled in favor of the Ballocks on all disputed issues. Based on the arbitrator's decision: (1) the Ballocks were permitted to revoke their purchase of the vehicle; (2) Crown was required to reimburse the Ballocks for all the car payments they had made; (3) Crown was required to pay off the vehicle loan in its entirety; and (4) Crown was required to pay the Ballocks $7,500 for their expenses and time.Automobile dealership sued disgruntled customer to enjoin his use of dealership's name in domain name of website created and maintained by customer to express his dissatisfaction with dealership. The District Court issued preliminary injunction contingent on dealership's posting of $10,000 bond. Following dissolution of injunction, customer moved for damages from bond. The District Court, Clemon, J., held that: (1) customer was entitled to $766.45 in out-of-pocket expenses; (2) $4,000 in mental anguish damages; and (3) $2,000 for deprivation of First Amendment rights.Motion granted. Disgruntled customer was entitled to $4,000 in mental anguish damages resulting from wrongfully issued preliminary injunction enjoining his use of automobile dealership's name in domain name of website created and maintained by customer to express his dissatisfaction with dealership from bond posted by dealership, based on dealership's attorney's threats to have customer "jailed or fined for contempt of court" for any violation of injunction.Disgruntled customer was entitled to $2,000 in damages for deprivation of First Amendment rights resulting from wrongfully issued preliminary injunction enjoining his use of automobile dealership's name in domain name of website created and maintained by customer to express his dissatisfaction with dealership from bond posted by dealership.
Pursuant to a Settlement Agreement between the parties, this case was dismissed, with prejudice, on February 13, 2003. Ballock suffered $766.45 in out-of-pocket costs to defend against the Preliminary Injunction. He suffered $4,000 in mental anguish damages. Finally, the deprivation of his First Amendment rights flowing from the wrongful issuance of the Preliminary Injunction is valued at $2,000.00.
CONCLUSION
Unlike patents and copyrights, the principle purpose behind the trademark law was—until recently—to protect consumers from confusion. Trademarks were not primarily designed to reward the intellectual property owner with an exclusive right to enjoy the financial fruits of their ingenuity. They were designed to protect individual and commercial consumers from accidentally buying a computer made by Incredibly Boorish Manufacturers on the basis of an IBM sticker on the tower case. This distinction – that trademarks are supposed to protect consumers—is important when considering cybersquatting and the emerging law that covers this concept.
Websites that proffer consumer commentary and political assent or dissent is exactly what courts, under the First Amendment, should fastidiously protect. A citizen’s criticisms would be wholly mysterious -- indeed, they would be pointless -- if s/he had to omit the name of the company or politician s/he is criticizing. This is core speech that should be fully protected by the First Amendment as non-commercial speech. If a user is trying to get to, for example, the Verizon website, if the user incorrectly inputs the domain name, they will not arrive at the Verizon website whether the incorrect spelling is a registered domain or not. In addition, while I have no supporting empirical data, common experience suggests that most people input a company or product name into a search engine, and then discern from the list of websites that appear in the search results which website is the one they are in fact seeking. Thus, to label what would be considered, in the traditional sense, non-commercial dissent as an unfair trademark use, simply because the dissent is published over the internet via a domain name that is similar to a trademark, is disingenuous of the spirit of ACPA and of the intelligence of Internet users.
Where a griper uses a trademark party’s name in a domain name and meta tags, as well as the text, to communicate the subject of the griper’s criticism, and not to create any confusion about the source of the website, the use of the trademark party’s name in the domain name and meta tags of the griper’s site, like the use of the trademark party’s name in the text of that site, constitutes First Amendment protected speech and should not be subject to the restraint of an injunction.
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NOTES
[1] A domain name is simply a website’s “address,” specifically the address one would type into the URL window to go directly to a specific website. For example, Faulkner University’s official website has a domain name of www.faulkner.edu.
[2] A trademark is any word, name, symbol, or device or any combination thereof-- used by a person to identify and distinguish his or her goods from those manufactured or sold by others and to indicate the source of those goods. See 15 U.S.C. § 1127.
[3] For example, a person named John Doe creates a website with a registered domain name of “www.disney.com.” Doe’s purpose, though, is not creative expression but rather to hold sole right to the domain name and attempt to sell the name to the Disney Company when it attempts to establish an official Disney website at www.Disney.com.
[4] Such as “www.verizonsucks.com”, where dissatisfied customers voice their dissatisfaction with Verizon Communications - the new telecommunications giant formed by the merger of Bell Atlantic and GTE- and “gwbush.com”, where citizens voice what they think are totalitarian, anti-American actions perpetrated by the Bush administration.
[5] SubmitExpress is a search engine optimization firm which helps companies increase their web site productivity through a combination of web site optimization and search engine submissions and specializes in advanced search engine marketing. Its on-line member company newsletters are one of several complimentary services it provides to consumers and its members. Its website may be found at www.submitexpress.com
[6] Meta tags are hidden text placed in the “head” section of a html page. They are used by most major search engines to index websites based on the keywords and descriptions the website’s creator chooses for the website. It is very important to use Meta tags as well as a good title for a website if one expects to be found in most search engines. Meta tags are not the only thing search engines will look at when ranking a website. Also, some search engines will ignore Meta tags completely. However, most search engines will rank and index websites by a combination of the Meta tags, the website title and the website’s body text.
[7] The act also provides a cause of action where an individual’s name is used within a domain name by a cubersquatter, such as “www.georgebush.com.”
[8] According to the legislative history fair use includes comparative advertising, comment, criticism, or parody – even where done for profit. However, simply establishing a website with a fair use, if the actual intent is to sell, will not allow a cybersquatter to avoid a bad faith determination. Id.
[9] For example, a local California comedienne registered “www.usamabinladen.com”, and every variation thereof, in late September of 2001.
[10] For example “www.porsche.com”
[11] To continue with the same example, “www.porcshe.com” or “www.prosche.com.”
[12] An example given in the committee reports is “911porsche.com.”
[13] The Warsaw Convention is a unification of certain rules relating to international carriage by air.
[14] E.g., Cardtoons v. Major League Baseball Players Ass'n, 95 F.3d 959, 968-970 (10th Cir. 1996); Rogers v. Grimaldi, 875 F.2d 994, 997-999 (2d Cir. 1989); Mutual of Omaha Ins. Co. v. Novak, 836 F.2d 397, 402-403 (8th Cir. 1987).
[15] L.L. Bean v. Drake Publishers, 811 F.2d 26, 33 (1st Cir. 1987); ACLU of Georgia v. Miller, 977 F. Supp. 1228, 1233 (N.D. Ga. 1997); Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 1161, 1167 (C.D. Cal. 1998); Lighthawk v. Robertson, 812 F. Supp. 1095, 1097-1101 (W.D. Wash. 1993); Stop the Olympic Prison v. United States Olympic Comm., 489 F. Supp. 1112, 1124-1125 (S.D.N.Y. 1980); see also Lucasfilm v. High Frontier, 622 F. Supp. 931 (D.D.C. 1985) (ruling on non-constitutional grounds).
[16] This section of the Act, as amended by the ACPA, is applicable to federally registered trademarks as well as unregistered trade names and other marks.
[17] Planned Parenthood Federation of America, Inc. (PPFA) has sued several anti-choice activists who unlawfully registered domain names that infringe on PPFA’s famous service marks, to include “Planned Parenthood®” and “teenwire®,” which is used in connection with PPFA’s award-winning Web site that provides teens with information about reproductive and sexual health and relationships.
The defendants in these cases collectively registered nine domain names, including ‘”wwwplannedparenthood.com” and “teenswire.com,” all of which are identical to or close variations of PPFA’s marks and point Internet users to graphic anti-choice Web sites such as www.abortionismurder.org and www.abortioncams.com. Once Internet users are initially misdirected, websites such as the abortionismurder.org site employs further technical and software devices to keep the consumer from finding PPFA’s legitimate Web sites.
[18] In reaching this conclusion, the Planned Parenthood court conducted a particularistic, context-sensitive analysis, including analyses of the domain name itself, the way the domain name is being used, the motivations of the author of the website in question, the contents of the website, and so on.
[19] Uses that are for commentary, comparative advertising, criticism, parody, or news reporting are not covered by the ACPA. However, if that site is registered with the intent to sell it back to the owner, then the registrant is not using it for comment, but for commercial gain and may be liable in an ACPA action. Compare Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161 (C.D. Cal. 1998) (holding that criticism site is not a commercial use and therefore not dilutive); with Lucent Techs. v. Johnson, 2000 WL 1604055, 56 U.S.P.Q. 2d 1637 (C.D. Cal. Sept. 12, 2000) (allowed claim under ACPA where defendant used lucentsucks.com for a pornographic Web site); Shields v. Zuccarini, 2000 U.S. Dist. LEXIS 3350 (E.D. Pa. Mar. 22, 2000) (finding bad faith where the defendant changed the nature of the challenged Web sites to political protests hours after he was served with the complaint); and Northland Ins. Cos. v. Blaylock, 115 F. Supp. 2d 1108 (D. Minn. 2000) (used to express dissatisfaction with Northland Insurance after the company refused a claim filed with it).
[20] Typically, this entails using a famous trademark to link to a site that offers competing products or sexually explicit material. This also includes activities such as "typo-squatting," e.g., www.pannasonic.com (extra "n") or wwwpainewebber.com (missing the period after www). See also Electronics Boutique Holdings Corp. v. Zuccarini, 2001 U.S. Dist. LEXIS 765 (E.D. Pa. Jan. 25, 2001) (entering default judgment where the defendant registered five domain names with slight misspellings of the plaintiff's mark); Ford Motor Co. v. Lapertosa, 126 F. Supp. 2d 463 (E.D. Mich. 2001) (granting preliminary injunction against registrant of www.fordrecalls.com being used for hard core pornography site).
[21] This factor is often demonstrated by the registrant's attempts to sell the domain name to the plaintiff in the particular case, or through a prior pattern of such conduct. See Northern Light Tech. v. Northern Lights Club, 236 F.3d 57 (1st Cir. 2001) (finding that registration of multiple domain names was evidence of bad faith under ACPA).Even if the registrant's intent was only partially to profit from a protected mark, the registrant can be found to have violated the Act. See Virtual Works, Inc. v. Volkswagen of Am., 238 F.3d 264 (4th Cir. 2001).
[22] As was discussed supra, this was one of the arguments made by the plaintiff in Alitala-Linee Aeree Italiane S.P.S. v. William Porta, 00 Civ. 9731 (S.D.N.Y. 2000).
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