Noncommercial use of BOSLEY MEDICAL trademark as domain name does not constitute infringement

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

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

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

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

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

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

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

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

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

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