Some time in the next few days President Bush is expected to sign the Trademark Dilution Revision Act of 2006. [Full text of the Act] Among other things, the Act essentially overrules a significant portion of the Supreme Court’s 2003 Moseley decision, which held that in order to be successful, a dilution plaintiff must allege and prove actual dilution of its mark. The Act provides that a plaintiff must show a mere likelihood of dilution to sustain a claim.

Inasmuch as lowering the standard to “likelihood of dilution” may assist plaintiffs with part of their case, the Act makes another aspect more difficult. Certain circuits (including the Seventh) currently hold that a plaintiff need only show that its mark is well-known among a defined segment of the population (e.g., Star Trek fans) in order to be famous for trademark dilution purposes. This is known as “niche market fame.” The Act does away with niche market fame by providing that “a mark is famous if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.”

Hat tip to John Welch for picking up on this legislation.

In the case of Dedvukaj v. Maloney, the U.S. District Court for the Eastern District of Michigan has held that it can exercise personal jurisdiction over a New York eBay seller accused of breach of contract, fraud and misrepresentation in connection with an auction that went sour.

Plaintiff Maloney, a Michigan resident, won two eBay auctions for paintings from defendant Dedvukaj, a seller based in Syracuse, New York. The auctions advertised the paintings as being originals, and the defendant apparently verified the authenticity of the paintings over the phone. After the auctions closed, the plaintiff sought to collect the art works, but the defendant never shipped them. (There appears to be a dispute over whether the defendant was selling original paintings or copies.) The plaintiff refused a refund and demanded either the original paintings or their fair market value.

The plaintiff filed a lawsuit in his home state of Michigan alleging breach of contract, fraud and misrepresentation. The defendant moved to dismiss for lack of personal jurisdiction, or alternatively to transfer venue to the Northern District of New York.

The defendant argued that the Michigan court did not have personal jurisdiction over him because he sold items through eBay, and bids are “random” and “fortuitous,” as sellers cannot control who bids on a given item. The defendant also argued that because he did not target or specifically market his auctions to Michigan residents, his contacts were too attenuated for the court to find personal jurisdiction.

The court first looked to whether the Michigan long arm statute would support the exercise of personal jurisdiction. It held that by communicating with the Michigan plaintiff by telephone and e-mail, accepting the winning bids, and confirming shipping charges to Michigan, the defendant transacted business in Michigan. Because the dispute arose out of that business transaction, the defendant satisfied the requirements of the long arm statute.

The court next looked to whether the exercise of personal jurisdiction would pass muster under a constitutional due process analysis. It discussed a number of analogous cases, eventually holding that the defendant’s auction clearly supported personal jurisdiction in Michigan through purposeful availment.

For example, in First Tennessee Nat. Corp. v. Horizon Nat. Bank a court found personal jurisdiction existed where the defendant’s website stated the bank could lend in “[all] 50 States.” 225 F.Supp.2d 816, 820-21. In another case, a court found purposeful availment where a website stated it would do business “for any parent in any state,” specifically including Michigan. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 891 (2002).

Using these cases as precedent, the court noted that the defendant’s auction listing stated he would ship anywhere in the United States. Additionally, defendant listed a toll-free telephone number and e-mail address in the auction. In part because the defendant did not limit buyers from Michigan from participating in his auction, and because he displayed a willingness to communicate with buyers from any state, the court found that the defendant had purposefully availed himself to the benefits of conducting business in Michigan.

Some other factors the court considered in finding purposeful availment: the number of e-mails and phone calls between the plaintiff and the defendant, the intentional and misleading nature of the communications between the parties, and the defendant’s acceptance of payment from Michigan.

Accordingly, the court denied the defendant’s motion to dismiss for lack of personal jurisdiction, and also denied the alternate motion for transfer of venue. It presented an essential fact underlying the analysis of personal jurisdiction arising from web-based transactions: “Sellers cannot expect to avail themselves of the benefits of the internet-created world market that they purposefully exploit and profit from without accepting the concomitant legal responsibilities that such an expanded market may bring with it.”

Dedvukaj v. Maloney, 2006 WL 2520347 (E.D. Mich., August 31, 2006).

Gregory Smith, a second year law student at Chicago-Kent College of Law, has agreed to be a contributor to InternetCases.com. Greg has a strong background and interest in both law and technology, which is demonstrated by his creation of the law blog aggregator Juris Novus. He also created the popular bicycling social networking site velospace. Before starting law school, Greg received a bachelor’s degree in network technology from DePaul University. He has worked for the Illinois Attorney General’s High Tech Crimes Bureau as a law clerk, and is an avid bicyclist and gin rummy player.

Greg’s ability and enthusiasm is sure to add to the quality of material you can find at InternetCases.com. Check out his first contribution — a summary of the recent case of Dedvukaj v. Maloney.

Contact Greg by e-mail at greg [at] metanovus dot com.

And by the way, I’ve given myself a bit of a promotion as well. I will now call myself the “Editor & Publisher” of this site.

In the case of Lands’ End, Inc. v. Remy, the defendant website owners were accused of crafting a clever scheme to get some extra commissions from their affiliate relationship with landsend.com. It looks like the scheme has backfired, however, as Lands’ End’s claim against the defendants under the Anticybersquatting Consumer Protection Act, [15 U.S.C. §1125(d)] (”ACPA”) has survived a summary judgment motion and the case is heading for trial.

Lands’ End operates an affiliate program that allows owners of approved websites to put up links to landsend.com. If a visitor to one of those approved websites clicks on the link and ends up buying something at the Lands’ End site, the affiliate website owner gets a 5% commission. The defendants in this case signed their websites up to be affiliates, and were approved.

In the process of signing up to become affiliates, however, the defendants only disclosed the URLs of their legitimate websites, e.g., savingsfinder.com. They did not tell Lands’ End that they also owned other domains like lnadsend.com and landswnd.com.

The defendants set up these other domain names so that if an Internet user accidentally typed one of them into a web browser, he or she would be automatically and invisibly redirected to the Lands’ End site. If one of those typosquatting victims purchased something at landsend.com, the defendants would pick up a commission.

The redirect only worked the first time a user would mistype the domain name. Perhaps to avoid detection, the defendants set up the redirect so that if a user typed the wrong domain name again, a 404 error would appear. (”Oh, I guess it was just a fluke.”)

After it noticed the defendants’ setup, Lands’ End filed suit alleging, among other things, violation of the ACPA. The defendants moved for summary judgment, arguing that there was no showing of bad faith. After all, the defendants argued, their scheme had sent visitors to the Lands’ End site, not diverted them away.

The court rejected the defendants’ argument and denied the motion for summary judgment as to the ACPA claim. It held that Lands’ End adduced substantial evidence to show that the defendants exploited the Lands’ End trademark to get commissions to which they were not entitled. Accordingly, the question of bad faith should ultimately be left up to the finder of fact.

Lands’ End, Inc. v. Remy, — F.Supp.2d —-, 2006 WL 2521321 (W.D. Wis., September 1, 2006).

This entry originally posted by Evan Brown at InternetCases.com.