Domain name case under ACPA failed because trademark was not distinctive

Federal appeals court holds that plaintiff failed to satisfy all elements of the Anticybersquatting Consumer Protection Act in action against competing airline

The federal Anticybersquatting Consumer Protection Act (ACPA) [15 U.S.C. 1125(d)] is a provision in U.S. law that gives trademark owners a cause of action against one who has wrongfully registered a domain name. In general, the ACPA gives rights to owners of trademarks that are either distinctive or famous at the time the defendant registered the offending domain name.

The Eleventh Circuit Court of Appeals recently affirmed the decision of a lower court that dismissed an ACPA claim, holding that the plaintiff failed to plead that its mark was distinctive at the time of the domain name registration.

Plaintiff sued its competitor, who registered the domain name tropicoceanairways.com. Defendant moved to dismiss, and the lower court granted the motion, finding that plaintiff failed to plead that its mark TROPIC OCEAN AIRWAYS was distinctive and thus protected under the ACPA. On appeal, the Eleventh Circuit affirmed the dismissal, holding that plaintiff’s complaint failed to allege that the mark was either suggestive or had acquired secondary meaning as an indicator of source for plaintiff’s services.

Suggestive marks are considered distinctive because they require “a leap of the imagination to get from the mark to the product.” (The court provided the example of a penguin used as a mark for refrigerators.) In this case, the court found the term “tropic ocean airways” was not suggestive, as it merely “inform[ed] consumers about the service [plaintiff provided]: flying planes across the ocean to tropical locations.”

The court rejected plaintiff’s argument that a pending application at the United States Patent and Trademark Office to register the mark proved that it was suggestive. While a certificate of registration may establish a rebuttable presumption that a mark is distinctive, the court held plaintiff was not entitled to such a presumption here, where the application remained pending. Moreover, the court observed in a footnote that the presumption of distinctiveness will generally only go back to the date the application was filed. In this case, the trademark application was not filed until about a year after the domain name was registered.

As for the argument the mark had acquired secondary meaning, the court found plaintiff’s allegations to be insufficient. The complaint instead made conclusory allegations about secondary meaning that were insufficient to survive a motion to dismiss. The court held that plaintiff failed to allege the nature and extent of its advertising and promotion, and, more importantly, did not allege any facts about the extent to which the public identified the mark with plaintiff’s services.

Tropic Ocean Airways, Inc. v. Floyd, — Fed.Appx. —, 2014 WL 7373625 (11th Cir., Dec. 30, 2014)

Evan Brown is an attorney in Chicago helping clients with domain name, trademark, and other matters involving technology and intellectual property.

Domain name owner gets swift relief against impostor website

Starcom Mediavest Group v. Mediavestw.com, No. 10-4025, 2010 WL 3564845 (September 13, 2010)

In rem actions over domain names are powerful tools. A trademark owner can undertake these actions when it identifies an infringing domain name but cannot locate the owner of that domain name. In a sense, the domain name itself is the defendant.

The Anticybersquatting Consumer Protection Act (which is a part of the federal trademark statute dealing with the unauthorized registration of domain names) says that a court can enter ex parte orders requiring a domain name to be turned over when: (1) the plaintiff owns a registered trademark, (2) the domain name registry is located in the judicial district in which the action is being brought, (3) the domain name violates the plaintiff’s trademark rights, and (4) the plaintiff cannot locate the owner of the domain name even though it has diligently tried.

An “impostor” registered mediavestw.com, and “tricked” at least one of plaintiff’s business partners into signing up for advertising services. Plaintiff owns a trademark for MEDIAVEST and operates a website at mediavestww.com. Plaintiff filed an in rem action and sought a temporary restraining order (TRO).

The court granted the motion for TRO. It found that plaintiff had met its burden for a temporary restraining order in that it had shown that it was likely to succeed on the merits and that it would suffer irreparable harm in the absence of preliminary relief. As for the showing of harm to its trademark rights, the court noted the efforts on the part of the domain name registrant to fraudulently enter into business arrangements with plaintiffs’ business partners.

The court found that the TRO would serve the public interest because such interest favors elimination of consumer confusion. (Consider whether there really was any consumer harm that took place here if the alleged fraud was on a business-to-business level. Compare the findings in this case with the finding of no consumer nexus in the recent Reit v. Yelp case.)

The court found that plaintiff had made such a strong showing of the likelihood of success that it did not require plaintiff to post a bond. It ordered the domain name transferred into the court’s control immediately. Behold the power of in rem actions.

Cybersquatter hit with maximum penalty

Citigroup, Inc. v. Shui, 2009 WL 483145 (E.D. Va. Feb. 24, 2009)

Court enjoins use of citybank.org, orders defendant to pay $100,000 in statutory damages and to pay Citibank’s attorneys’ fees.

Defendant Shui registered the domain name citybank.org and established a site there promoting financial services, sometimes using the mark CITIBANK. The real Citibank, armed with its trademark registrations in over 200 countries and over 50 years of use of its CITIBANK mark, filed suit against Shui under the Anticybersquatting and Consumer Protection Act, 15 USC 1125(d) (“ACPA”).

Citibank moved for summary judgment on its ACPA claim and also asked the court to enter an injunction against Shui. Citibank also sought $100,000 — the maximum amount of statutory damages available under the ACPA, plus payment of Citibank’s attorneys’ fees. The court granted all of Citibank’s requested relief.

To prevail on the ACPA claim, Citibank had to show that (1) Shui had a bad faith intent to profit from using the domain name, and (2) that the domain name at issue was identical or confusingly similar to, or dilutive of, Citibank’s distinctive or famous mark.

Finding of bad faith

The court found Shui registered the domain name in bad faith because:

  • Shui did not have any trademark or other intellectual property rights in the domain name, and the registration of the domain name was not sufficient to establish any rights.
  • The domain name consisted of the legal name of Citibank (with one letter difference) and not the legal name of, nor any name that was otherwise used to identify Shui.
  • Shui had not engaged in prior use of the disputed domain name in connection with the bona fide offering of any goods or services prior to registering the domain name.
  • Shui’s use of the domain name was commercial in nature. Notably, some of the advertisements on Shui’s site were exact replicas of the marks CITIBANK and CITI. Each clickthrough provided Shui with advertising revenue, even though clicking on a link with Citibank in the title did not redirect the user to any website affiliated with the real Citibank.
  • Shui clearly intended to confuse, mislead and divert internet traffic from Citibank’s official website to his own in order to garner more clickthrough revenue from the misleading “citibank” advertisements.
  • Subsequent to the filing of the complaint, Shui sold the domain name for financial gain to a third-party in an apparent effort to avoid liability.
  • Shui registered other internet domain names which were identical or similar to Citibank’s marks, and the CITIBANK mark was distinctive and famous at the time Defendant registered the disputed domain name.

Confusing similarity

On the issue of confusing similarity, the court observed the strength of Citibank’s mark and the fact that the parties both offered financial services. Taking those facts in combination with the bad faith demonstrated by Shui, the court found the disputed domain name to be confusingly similar to Citibank’s marks.

The remedy

Accordingly, the court found in favor of Citibank on the ACPA claim. The court was stern in its remedy. It found that Shui’s registration of the confusingly similar domain name was “sufficiently willful, deliberate, and performed in bad faith to merit the maximum statutory award of $100,000 and an award of attorney’s fees.”

$100K photo courtesy Flickr user Ricardo (Kadinho) Villela under this Creative Commons license.

Verizon obtains damages, injunction against regsitrar under ACPA

[This is a guest post by contributor Brian Beckham]

Plaintiff Verizon California, Inc. (Verizon) recently obtained a default judgment in the U.S. District Court for the Northern District of California, San Jose Division, in its favor against Defendant, the registrar OnlineNIC, Inc. (press release).

Despite repeated attempts, Verizon was not able to serve notice on OnlineNIC; the court ultimately approved Verizon’s application to serve process with the California Secretary of State. OnlineNIC was alleged to have engaged in the bad faith registration of 663 identical or confusingly similar domain names incorporating one of Verizon’s family of marks (e.g., <bestverizon.net>, <myprepaidverizon.com>, <verizonflios.com>, <vzwactivate.com>, etc.) inter alia, in violation of the ACPA. Verizon’s unchallenged, well-pleaded allegations were accepted by the court as true; OnlineNIC’s liability was thus established.

In addition to OnlineNIC’s default, significantly, the court noted that OnlineNIC had refused to alter its behavior (presumably after a cease & desist letter) and had purposefully attempted to avoid detection (e.g., by providing false contact information). However, given the default, the court was reluctant to impose the full statutory damages provided for under the ACPA ($100,000 per infringement), but imposed damages of $50,000 per violation (totaling $33.15 million). It remains to be seen whether Verizon will successfully collect, nonetheless, Verizon obtained a transfer order in its favor for all of the 663 infringing domain names. OnlineNIC (including any related entity) was further enjoined from directly or indirectly (i) registering, trafficking in or using any domain name that is identical or confusingly similar to the Verizon marks and (ii) assisting, aiding or abetting any other person or business entity in engaging in or performing and of the said activities.

This injunction seems to leaves open the question of whether the seemingly common registrar practice of actively suggesting alternate domain names available for registration (e.g., those that add alphanumerical strings, e.g., <new____4u.com>, <buy____.net>, <your____.org>, <my____pro.com>, <best____.com>, etc.) would be covered by the “assisting, aiding or abetting” language in the injunction.

Case is: 2008 U.S. Dist. LEXIS 104516

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