Court shuts down unauthorized “e-Certificate” site

Ex parte temporary restraining order issued against operator of northwestdiscountcoupons.com

Northwest Airlines gives away “e-Certificates” to passengers who experience flight delays, cancellations, or other inconveniences. These e-Certificates are redeemable for significant discounts on future ticket purchases. Passengers redeem e-Certificates by visiting Northwest’s website and entering the unique coupon number appearing on the face of each e-Certificate. Until recently, passengers were allowed to give away their e-Certificates to others, but were not permitted to sell them.

In the course of investigating the unauthorized sale of e-Certificates on sites like eBay and Craigslist, a Northwest employee discovered the site northwestdiscountcoupons.com, allegedly operated by one Mike Bauer. To confirm its suspicions, Northwest had one of its interns purchase a number of e-Certificates from the site.

Northwest filed suit against Bauer alleging a number of causes of action, including false advertising, tortious interference, cybersquatting, and trademark infringement. It sought an ex parte temporary restraining order against Bauer. The U.S. District Court for the District of North Dakota granted the motion.

Northwest asserted that two independent causes of action entitled it to injunctive relief. First, it argued that Bauer’s misleading use of the NORTHWEST mark violated the Lanham Act and caused continual and irreparable damage to the value and trust Northwest had cultivated in its name and mark. Second, Northwest argued that Bauer’s alleged illegal and fraudulent sale of e-Certificates to unknown and unsuspecting customers was a violation of public trust that could not be permitted to continue under North Dakota law.

The court went no further than analyzing the alleged violations of the Lanham Act to determine that the temporary retraining order was warranted.

It held that Northwest was likely to succeed on its trademark infringement claim, where, among other things, the defendant was alleged to have registered a domain name that was identical or confusingly similar to Northwest’s distinctive mark. On this point, the court cited to Green Products Co. v. Independence Corn By-Products Co., 992 F.Supp. 1070, 1076-77 (8th Cir.1997) and Faegre & Benson, LLP, v. Purdy, No. Civ. 03-6472 (MJD/JGL), 2004 WL 167570 (Jan. 5, 2004, D.Minn).

Further, citing to Coca-Cola Co. v. Purdy, [No. 02-1782 ADM/JGL, 2005 WL 212797 (Jan. 28, 2005, D.Minn)] the court found that “the nature of the Internet makes if unlikely that consumers can avoid confusion through the exercise of due care.”

Northwest Airlines, Inc. v. Bauer, (Slip Op.) 2006 WL 3733295 (D.N.D., December 15, 2006)