Cybertelecom Federal Internet Law & Policy An Educational Project

AntiCybersquatting Consumer Protection Act

Fan and Gripe Sites

What if you want to gripe about a company? What if some company delivered shoddy service and you believe the world will be better if you share your misery with others. And if in the process of sharing your misery you not only kvetch about the company, but also establish a web presence using that company’s name in the domain name (along the lines of cannonsucks.com). In theory, ACPA clarifies that it does not alter the ability of individuals to make legitimate uses of trademarks including fair use and free speech. [ACPA Sec. 3008]. Where the use of a domain name is a part of such commentary, and where the necessary element "intent to profit from the mark" [15 USC § 1125(d)(I)(A)] is absent, this has been considered by courts as a fair use exception to the ACPA. [Coca-Cola 778] [HER § 1 (where gripe site was in direct commercial competition with plaintiff, and gripe domain direct visitors to defendant's commercial site, gripe-fair-use exception did not apply)] [Jalin D Minn 2013] [See also Is it Legal to Link (discussing use of trademarks in links and metatags)] Merely criticizing a trademark owner, including with intent to harm the trademark owner, is not actionable under the ACPA; an attempt to harm through criticism does not itself add up to bad faith. [Career Agents Network Slip p 15] [Ford Motor Company at 665 (rejecting reasoning of court in Jews for Jesus)] [Hasbro Inc. at 124]

Michelle Gross felt that way. She thought the world would be better if she set up lucasnursery.com to share her story of her experience with Lucas Nursery and Landscaping, Inc. Lucas Nursery did not at the time have its own website; thus it could not be said that Gross was seeking to divert traffic from its website. It was perfectly clear to any visitor that Gross was griping, and was not seeking to mislead consumers that she was the real Lucas Nursery website. Gross did not offer the domain name for sale to Lucas Nursery. She did not attempt to settle with them. After receiving a letter from the nursery directing her to take down the site, she checked and confirmed that Lucas Nursery had not established a trademark for its name. She only registered one domain name (she did not warehouse). [Toronto] In this situation, the court concluded

Perhaps most important to our conclusion are, Grosse’s actions, which seem to have been undertaken in the spirit of informing fellow consumers about the practices of a landscaping company that she believed had performed inferior work on her yard. One of the ACPA’s main objectives is the protection of consumers from slick internet peddlers who trade on the names and reputations of established brands. The practice of informing fellow consumers of one’s experience with a particular service provider is surely not inconsistent with this ideal.

[Lucas] [See also TMI (no ACPA violation where defendant created website to air complaints about plaintiff's salesman)]

Likewise, when Bell Atlantic became Verizon, Verizon apparently sought to stifle critics by registering domain names such as "verizonsucks.com." They also sent out cease and desist letters to anyone using "Verizon" in a domain name. This led to the registration by the hacker magazine 2600 of the domain name "verizonreallysucks.com" which led to another cease and desist letter which led 2600 to register VerizonShouldSpendMoreTimeFixingItsNetworkAndLessMoneyOnLawyers.com. It would be hard to suggest that these critical sites could be confused with the actual mark, nor were they taking away domain names that Verizon might legitimately want to use. Rather, these were within the bounds for First Amendment speech. Verizon withdrew its cease and desist letters from these domain name owners and was quoted as saying that the whole thing was just a “misunderstanding.” [Verizon] See also [Lucent] [Bally] [Falwell]. See Also UDRP.

Many courts hold that the mere creation of a gripe site does not itself constitute use of the trademark in commerce. [Cleary Building] [Mayflower] [Career Agent Networks Slip p 19] According to the Court in Career Agent Networks,

In Bosley, the facts were similar to the facts of this case. As summarized by the Ninth Circuit:

Defendant Michael Kremer was dissatisfied with the hair restoration services provided to him by the Bosley Medical Institute, Inc. In a bald-faced effort to get even, Kremer started a website at www.BosleyMedical.com, which, to put it mildly, was uncomplimentary of the Bosley Medical Institute. The problem is that "Bosley Medical" is the registered trademark of the Bosley Medical Institute, Inc., which brought suit against Kremer for trademark infringement and like claims. Kremer argues that noncommercial use of the mark is not actionable as infringement under the Lanham Act. Bosley responds that Kremer is splitting hairs.

Id. at 674. The court held that "the noncommercial use of a trademark as the domain name of a website-the subject of which is consumer commentary about the products and services represented by the mark-does not constitute infringement under the Lanham Act." Id. In concluding that the defendant's use was noncommercial, the court found relevant that the defendant's site did not contain any commercial links but rather contained links to a discussion group, which in turn contained advertising. Id. at 678. The court stated that "[t]his roundabout path to the advertising of others is too attenuated to render Kremer's site commercial. At no time did Kremer's BosleyMedical.com site offer for sale any product or service or contain paid advertisements from any other commercial entity." Id.

Why yes, we did just have to include that rendition of the Bosley case (judges can have literary fun sometimes).

Courts frequently recognize there there is no likelihood of confusion between the plaintif's website and the gripe site.

Smith NDGa 2008 (granting domain name owners Motion for Summary Judgment, concluding that there was no likelihood of confusion between Smith's Wal-Mart gripe site, and Wal-Mart)

Where the gripe site uses a domain name that is identical to the trademark owner's mark, however, court's have been inclined to find bad faith .

PETA 920 4th Cir. 2001 (The court in Doughney based its finding of liability in part on the fact that the defendant had "registered other internet domain names which are identical or similar to either marks or names of famous people or organizations he opposes." )

E&J Gallo 1046 SDTX 2001 ("The ACPA singles out this type of behavior as indicative of bad faith.")

Legislative History

S. Rep. No. 106-140, 1999 WL 594571, at *14. "Under the bill, the use of a domain name for purposes of comparative advertising, comment, criticism, parody, news reporting, etc., even where done for profit, would not alone satisfy the bad-faith intent requirement. The fact that a person may use a mark in a site in such a lawful manner may be an appropriate indication that the person's registration or use of the domain name lacked the required element of bad-faith."

Cases

Lamparello v. Falwell, 420 F.3d 309, 320 (4th Cir. 2005) "[t]hese factors attempt `to balance the property interests of trademark owners with the legitimate interests of Internet users and others who seek to make lawful uses of other's marks, including for purposes such as comparative advertising, comment, criticism, parody, news reporting, fair use, etc.'"(quoting H.R. Rep. No. 106-412, 1999 WL 970519, at *10)

Mayflower Transit, L.L.C. v. Prince, 314 F. Supp. 2d 362, 370-71 (D.N.J. 2004),

Lewittes v. Cohen, No. 03 Civ. 189, 2004 WL 1171261, at *8 (S.D.N.Y. May 26, 2004) ("[O]n the whole, the allegations set forth in the Complaint do not even remotely suggest that defendants perpetrated the core activities that threaten to result in the paradigmatic harm that the ACPA was enacted to eradicate." (quotation marks and citations omitted))

TMI, Inc. v. Maxwell, 368 F.3d 433, 438-40 (5th Cir. 2004) ("[T]he site's purpose as a method to inform potential customers about a negative experience with the company is key.")

AVIVA USA CORPORATION v. Vazirani, Dist. Court, D. Arizona 2012

Defenses

Disclaimers: The presence of disclaimers on domain name owners site might support a finding of no bad faith. Taubman v. Webfeats, 319 F3d 770 (6th Cir. 2003). However, the absence of disclaims does not mandate a finding of bad faith. The presence of disclaimers is more important in cases where "the content of the website could have created confusion as to the source of the website." [Career Agents Network Slip at 11]

Other "Courts have concluded that the use of a disclaimer does not save a domain name from cybersquatting liability as the internet user must access the site before seeing the disclaimer." [Coca Cola 783 ("material on site is not relevant to whether the domain name and mark are confusingly similar")] [Anlin Slip 10] [Trump EDNY 2013] McCarthy, supra, § 25:78

See also Fair Use Defense.

Remedy / Damages

If a plaintiff succeeds in establishing a violation of the ACPA, the court may

order injunctive relief (prohibit the domain name owner from using the domain name), 15 U.S.C. § 1116

[Doctors Assoc (D Minn 2010) (granting permanent injunction - " In the face of defendant's unrelenting efforts to use and derive benefit from plaintiff's trademarks, the Court concludes a permanent injunction is necessary to protect plaintiff from ongoing harm.")]

[Anlin Slip 14]

order the forfeiture or cancellation of the domain name,

[Anlin Slip 15]

order the transfer of the domain name to the owner of the mark, 15 U.S.C. § 1125(d)(1)(C)

Skydive Arizona (D Ar July 28, 2010) Order Defendant to reacquire expired domain name in order to effectuate previously ordered transfer

Mattel v. Adventure Apparel, (SDNY Sept. 19, 2001) (Ordering defendant to transfer "barbiesbeachwear.com" and "barbiesclothing.com" to plaintiff),

Actual or Statutory Damages

Actual Damages

15 USC § 1117(a) "Profits; damages and costs; attorney fees When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125 (a) or (d) of this title, or a willful violation under section 1125 (c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover

"(1) defendant's profits,

"(2) any damages sustained by the plaintiff, and

"(3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party."

Damages

DSPT p 14 9th Cir. 2010 (affirming award of $152,000 in case of intentional infringment

Attorneys Fees: " Reasonable attorneys' fees are allowed for violations of the ACPA under Section 1117(a) in "exceptional cases." The Fifth Circuit described an exceptional case as one that "involves acts that can be called `malicious,' `fraudulent,' `deliberate,' or `willful.'" Schlotzsky's, Ltd. v. Sterling Purchasing & Nat'l Distrib. Co., Inc., 520 F.3d 393, 402 (5th Cir. 2008) (citing Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir. 1996) ). "

Gharbi WDTX 2011: upon finding that "Defendant's conduct renders this an exceptional," awarding attorneys fees.

Silpada (awarding attorney's fees)

Anlin Slip 15 (declining motion for attorney's fees)

Doctors Assoc (D Minn 2010) (awarding attorney's fees pursuant to 15 USC § 1117(a))

Statutory damage of not less than $1,000 and not more than $100,000. [15 U.S.C. § 1117(a)&(d)]

15 USC § 1117(d): "Statutory damages for violation of section 1125 (d)(1) In a case involving a violation of section 1125 (d)(1) of this title, the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits, an award of statutory damages in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just."

"The Fifth Circuit has stated that the statutory damage provisions of ACPA are akin to the statutory damages provisions of the copyright laws, which the Supreme Court has said "not merely compel[] restitution of profit and reparation for injury but also [are] designed to discourage wrongful conduct." E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 278 (5th Cir. 2002) (quoting F.W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 233 (1952) ). The Ninth Circuit has stated that the policy behind Section 1117 damages is to "take all economic incentive out of trademark infringement." Harry and David v. Pathak, 2010 WL 4955780, *5 (D.Or. Oct. 29, 2010) (quoting Intel Corp. v. Terabyte Int'l Inc., 6 F.3d 614, 621 (9th Cir. 1993) ). A District Court in California discussed several factors to take into consideration when determining the amount to award a plaintiff under § 1117(d). Verizon California Inc. v. Onlinenic, Inc., 2009 WL 2706393 (N.D.Cal. August 25, 2009). Those factors include the egregiousness or willfulness of the cybersquatting conduct, the use of false contact information to conceal its infringing activities, the patterns of infringing conduct by the defendant, and other behavior by the defendant showing an attitude of contempt towards the court or the proceedings. Id. at *3-6." [Gharbi WDTX 2011]

Kiva Kitchen & Bath Inc. p 320-21 5th Cir. 2009: "The Fifth Circuit, in upholding an award for the statutory maximum determined that $100,000 per violation was warranted "in light of [defendant's] bad faith intent to divert potential customers to [defendant's] website and because [plaintiff] is a direct competitor of [defendant] in Dallas," and because "the [defendants] had refused to stop forwarding the infringing domain names or to transfer them to [plaintiff] until just a few weeks before trial." "

E & J Gallo Winery, 286 F.3d at 278 (upholding the district court's award of $25,000 in statutory damages when the plaintiff in the case did not present any evidence that it lost any business due to the defendant's actions, but was at risk of losing business and of having its reputation tarnished)

Gharbi WDTX 2011: awarding damages of $25,000 per ACPA violation for three domain names, for total of $75,000, stating " While clearly wrong and intentional, the Court does not believe that Defendant's conduct rises to the level to warrant an award of the statutory maximum. "

Silpada (affirming statutory damages where domain name was registered after cease and desist letter was received)

Anlin Slip 14 EDCA 2007 (awarding damages of $2500 per domain name for five domain names where plaintiff made no showing that it suffered damages)

Doctors Assoc (D Minn 2010) (awarding $25k in statutory damages)

Shileds p 487 3rd Cir 2001 (court has wide discretion to award statutory damages that it "considers just." )

Carnivale DDel 2010 (awarding damages of $25K)

Mattel p. 5 SDNY Sept 7, 2011: "The District Court for the Southern District of New York awarded a plaintiff the statutory minimum of $1,000 per violation under § 1117(d), stating that "[t]he need for deterrence is not exceptional in this case since little if any actual harm has been done to [plaintiff], considering the miniscule number of web hits and the solitary sale of a pair of stockings." "

Electronics Boutique Holding Corp., p 8 EDPa Oct. 30, 2000: "the Eastern District of Pennsylvania awarded a plaintiff the statutory maximum of $100,000 per violation because the defendant had been previously enjoined from similar cybersquatting conduct and stated that the defendant "boldly thumbs his nose at the rulings of this court and the laws of our country. Therefore I find that justice in this case requires that damages be assessed against [defendant] in the amount of $100,000 per infringing domain name...""

Bankruptcy

IN RE BARLOW, 478 BR 320 - Bankr. Court, SD Ohio 2012 (award of statutory damanges pursuant to ACPA are not dischargable in bankruptcy (trial was HER, Inc. v. RE/MAX First Choice, LLC, No. 2:06-CV-492, slip op. at 3 (S.D.Ohio Dec. 1, 2011))

In Rem:

The ACPA includes provisions covering situations where the true owner of the domain name is unknown or is not within the reach of US jurisdiction. In these cases, the plaintiff can initiate an in rem proceeding against the domain name itself. In Rem authority was intended "to provide a last resort where in personam jurisdiction is impossible, because of the domain name registrant is foreign or anonymous." [Lucent Techs. 534 bEDVA 2000]. See also [Heathmount 868 EDVA 2000] Notice of the action to the domain name owner must be attempted by sending a notice of the alleged violation to the postal and email address of the owner (this type of information is maintained in the WHOIS database). 15 U.S.C. § 1125(d)(2)(A)(ii)(II) . [See CNF] [Majestic Star DNV 2010 service sufficient by email and physical mail along with disabling domain name]

Plaintiff's in In Rem cases must establish bad faith.

"The requirement that bad faith be proven as a prerequisite for in rem relief under 15 U.S.C. § 1125(d) was discussed in BroadBridge Media, L.L.C. v. Hypercd.com, 106 F.Supp.2d 505, 511 (2000) ; and in Harrods Limited v. Sixty Internet Domain Names, supra, 110 F.Supp.2d 420 (E.D.Va.2000) . As the court found in Harrods, "[B]ecause Congress chose to include in the in rem action in paragraph (2) [of the ACPA] the definition of potential defendants used in paragraph (1), we must therefore conclude that Congress intended for the "bad faith intent to profit" element to be part of any in rem action." 110 F.Supp.2d at 426 ; see also Northern Light Technology v. Northern Lights Club, supra . Therefore, plaintiff must prove that Bürgin acted in bad faith when he registered the domain names before it may obtain transfer of the names through an in rem judgment under paragraph 2 of the ACPA." [Hartog 539-40 EDVA 2001]

In these cases, the court's authority is limited to the disposition of the domain name itself (forfeiture, cancellation, or transfer) and does not include monetary awards (consider that there is no person from which to receive the award). 15 U.S.C. § 1125(d)(2). [But See Agri-Supply Co. (attorneys fees)]

According to the Legislative History,

As amended, the bill provides for in rem jurisdiction, which allows a mark owner to seek the forfeiture, cancellation, or transfer of an infringing domain name by filing an in rem action against the name itself, provided the domain name itself violates substantive Federal trademark law, where the mark owner has satisfied the court that it has exercised due diligence in trying to locate the owner of the domain name but is unable to do so. A significant problem faced by trademark owners in the fight against cybersquatting is the fact that many cybersquatters register domain names under aliases or otherwise provide false information in their registration applications in order to avoid identification and service of process by the mark owner. The bill, as amended, will alleviate this difficulty, while protecting the notions of fair play and substantial justice, by enabling a mark owner to seek an injunction against the infringing property in those cases where, after due diligence, a mark owner is unable to proceed against the domain name registrant because the registrant has provided false contact information and is otherwise not to be found.

Additionally, some have suggested that dissidents and others who are online incognito for legitimate reasons might give false information to protect themselves and have suggested the need to preserve a degree of anonymity on the Internet particularly for this reason. Allowing a trademark owner to proceed against the domain names themselves, provided they are, in fact, infringing or diluting under the Trademark Act, decreases the need for trademark owners to join the hunt to chase down and root out these dissidents or others seeking anonymity on the Net. The approach in the amended bill is a good compromise, which provides meaningful protection to trademark owners while balancing the interests of privacy and anonymity on the Internet. [Senate Report page 10]

Registry & Registrar Immunity

Many ISPs and Internet ventures have now revised their business plans to include becoming domain name registries. There was a time when NSI, the former sole .com registry, spent a significant amount of legal resources attempting to not get caught in the middle of any domain name litigations. The policy of NSI was that it just registered domain names – it did not nor was it responsible for ensuring that the domain names registered did not infringe on the rights of any third party (a task that would be insurmountable). [Rony The DNS Handbook]

Learning from experience, Congress included a provision in the ACPA attempting to make clear that domain name registries and registrars are not liable for the infringement of trademark owners rights by domain name holders. [Lockheed Martin NDTX 2001 (finding no liability for NSI)] According to the Legislative History

This section amends section 32(2) of the Trademark Act to extend the Trademark Act's existing limitations on liability to the cybersquatting context. This section also creates a new subparagraph (D) in section 32(2) to encourage domain name registrars and registries to work with trademark owners to prevent cybersquatting through a limited exemption from liability for domain name registrars and registries that suspend, cancel, or transfer domain names pursuant to a court order or in the implementation of a reasonable policy prohibiting cybersquatting. The bill anticipates a reasonable policy against cybersquatting will apply only to marks registered on the Principal Register of the Patent and Trademark Office in order to promote objective criteria and predictability in the dispute resolution process.

This section also protects the rights of domain name registrants against overreaching trademark owners. Under a new section subparagraph (D)(iv) in section 32(2), a trademarkowner who knowingly and materially misrepresents to the domain name registrar or registry that a domain name is infringing shall be liable to the domain name registrant for damages resulting from the suspension, cancellation, or transfer of the domain name. In addition, the court may grant injunctive relief to the domain name registrant by ordering the reactivation of the domain name or the transfer of the domain name back to the domain name registrant. Finally, in creating a new subparagraph (D)(iii) of section 32(2), this section codifies current case law limiting the secondary liability of domain name registrars and registries for the act of registration of a domain name, absent bad-faith on the part of the registrar and registry. [Senate Report p 17] 

A domain name registry or registrar who removes, disables, cancels, or refuses to register a domain name is not liable if the registrar or registry (a) acts in accordance with a court order or (b) implements a policy of refusing to register domain names that are identical to, similar to, or violate the trademark of a trademark owner (regardless of intent of registrant). 15 USC § 1114(D)(i).

If, however, the registry or registrar fails to act, it can be subject to injunctive relief. 15 U.S.C. § 1114(D)(ii).

If, however, the registry or registrar acts with a bad faith intent to profit from such registrations, then it can be liable for damages. 15 U.S.C. § 1114(D)(iii).

Rights of Domain Name Holders

So does the domain name holder have any rights?

Liability: If the registry or registrar acts based on a knowing and material misrepresentation, the person making the misrepresentation can be liable to the domain name holder for monetary damages including attorney’s fees. The court can order the transfer or reactivation of the domain name. 15 U.S.C. § 1114(D)(iv).

Reactivation: Domain name holders who have had their domain names affected by the ACPA may go to court to get a ruling that their domain is “not unlawful” and to have their domain name reactivated. 15 U.S.C. § 1114(D)(v).

Rights Preserved: The ACPA states that it does not alter the ability of individuals to make legitimate uses of trademarks including fair use and free speech. ACPA Sec. 3008.

Historic Preservation: The ACPA also amends the National Historic Preservation Act to include language that buildings and properties

on or eligible to be on the National Register of Historic Places;

designated as individual landmarks; or

that contribute to historic districts

may retain their names. ACPA Sec. 3007 codified at 16 U.S.C. § 470a(a)(1)(A).

Personal Names

Individual seeking to gain control of domain name: Individuals also receive some protection under the ACPA for personal names. However, this protection is far more limited. The ACPA protects personal names where the domain name holder has the specific intent to profit from the sale of the domain name. 15 U.S.C. § 1129 (ACPA Sec. 3002(b)) (See exceptions in ACPA Sec. 3002(b)(1)(B) including domain names related to literary works. Also note that personal names themselves can also be trademarks and receive the rights and protections as trademarks). There are numerous exceptions to this provision, not the least of these is that the domain name holder registers the name but does not attempt to sell it, the ACPA creates no cause of action. [See also Falwell]

An example of this has been the gwbush.com domain name which was not owned by the Gov. George Bush presidential campaign. gwbush.com is a parody site offering opinion and commentary on then presidential candidate George W Bush. Gov. Bush does not have trademark rights to his name and the domain name holder was not attempting to sell the domain name. Furthermore, as the gwbush.com website is a political parody site, it is exactly the type of political discourse that should be protected under the First Amendment. The campaign was unable to stop the use of this domain. For more on this controversy, see Content Regulation: Federal Election Commission.

Damages here include injunctive relief, forfeiture, monetary damages, and attorneys fees. ACPA Sec. 3002(b)(2).

See Individual seeking to retain control of domain name, Bad Faith factor 2..