What is ‘Bad Faith’ Intent to Profit Under the Anticybersquatting Consumer Protection Act?

What is ‘Bad Faith’ Intent to Profit Under the Anticybersquatting Consumer Protection Act?

When companies and individuals take the time and money to register and develop a domain name or trademark, they want to make sure that their intellectual property is being used only by them.  However, there are several other individuals and companies that will try to benefit from the hard work of others by intentionally, and sometimes unknowingly, use the same or similar domain names or trademarks for their own personal and financial gain.  ‘Bad Faith’ is defined by Wikipedia asdouble mindedness or double heartedness in duplicity, fraud, or deception.  It may involve intentional deceit of others, or self-deception.’  

The summary of cases below briefly outline how the Courts were able to find that the bad faith requirement had been met under the ACPA when individuals and companies did intend to profit from other’s domain names and trademarks in registration and/or use.  Some of these bad faith intentions used by the infringers included:  the use of the domain name in conjunction of a “phishing’ scam; no other reason for use of the words or makes other than a desire to capitalize on a strong trademark; intent to profit from poor typing abilities of consumers trying to reach owner’s websites; and a competitor registering the domain name for the express purpose of keeping another corporation from using it, just to name a few.

 

What is “bad Faith” intent to profit under the Anticybersquatting Consumers Protection Act?

Below are synopses of many Bad Faith Cybersquatting cases that cut in favor of the plaintiff.

Although the plaintiffs in Pennsylvania Business Bank v. Biz Bank Corp., failed in their assertion that defendant’s had an affirmative duty to at least investigate third party trademarks before registering the domain, the requisite bad faith element was still met and found in favor of the plaintiffs: “plaintiff has proven . . . that BIZBANK is a distinctive or famous mark so that it is entitled to protection; that defendants’ domain name <http://www.bizbank.com> is identical or confusingly similar to plaintiff’s mark; and that defendants registered the domain name with the bad faith intent to profit from it.” 330 F. Supp. 2d at 526.

Although I was unable to find any authority that supports the notion that there is an affirmative duty not to register domains of third party trademarks, below are many examples of ways that we can assert a claim of bad faith on the part of NCS, regardless of their claim that they’re “doing the best they can.” It seems that, regardless of the defendant’s plain ignorance or seemingly innocent “intent,” if NCS is found to be in violation of the enumerated bad faith factors (provided at the end of this document), then they have met the bad faith requirement under the ACPA.

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Bad Faith Cybersquatting cases:

Internet domain name registrant was acting in bad faith with intent to profit from use of “VOLVO” trademark in his “volvospares.com” website, as required to prevail on claim under the Anticybersquatting Consumer Protection Act (ACPA); registrant intended to divert sales from authorized Volvo dealers, “VOLVO” mark was registered 41 years before registrant began using “volvospares.com” to sell new, used, and reconditioned Volvo parts, and registrant should have known that he was infringing based on distinctiveness of “VOLVO” mark.   Volvo Trademark Holding AB v. Volvospares.com, E.D.Va.2010, 2010 WL 1404175.

Card verification provider, seeking preliminary injunction prohibiting competitor’s use of “MUNICIPAY” trademark and “www.getmunicipay.com” website, had substantial likelihood of success on merits of its claim that competitor had used “www.getmunicipay.com” with a bad faith intent to profit, as element of provider’s cybersquatting claim; competitor, who had previously worked as provider’s sales agent, began routing viewers of its “www.getmunicipay.com” site to a site that sold a competing product right around the time that provider terminated its sales agreement with competitor.   Nationwide Payment Solutions, LLC v. Plunkett, D.Me.2010, 697 F.Supp.2d 165.

Bad faith intent on part of seller of triathlon equipment to profit from triathlon’s trademarks supported triathlon’s cybersquatting claim under the Anticybersquatting Consumer Protection Act (ACPA), where seller had no intellectual property rights in the domain name, since it had not used the name in commerce prior to registration, it did not make fair use or noncommercial use of the mark at its site, and seller took triathlon’s distinctive and famous name with intent to divert consumers from triathlon’s site and harm triathlon’s goodwill for its own commercial gain by creating confusion as to source and sponsorship.   New York City Triathlon, LLC v. NYC Triathlon Club, Inc., S.D.N.Y.2010, 2010 WL 808885 , motion to vacate denied.

Service mark owner’s allegations, that eleven separate domain names registered by domain name registrar were substantially similar to service mark, were sufficient at pleading stage to satisfy bad faith prong of Anticybersquatting Consumer Protection Act (ACPA) claim by creating inference that registrar, owner of registrar and registrants intended to profit from misuse of marks as well as marks of others.   Transamerica Corp. v. Moniker Online Services, LLC, S.D.Fla.2009, 672 F.Supp.2d 1353.

Architectural firm’s website designer acted in bad faith when he registered domain name “www.hamptonlocations.com” for firm, and thus designer was liable to corporation that used domain name “www.hamptonslocations.com” under Anticybersquatting Consumer Protection Act (ACPA); designer had prior knowledge of corporation’s mark, lacked any intellectual property rights in offending domain name at time he registered it, and designer never used domain name for purported real estate venture, but rather used domain name to redirect visitors to firm’s website for commercial gain.   Hamptons Locations, Inc. v. Rubens, E.D.N.Y.2009, 640 F.Supp.2d 208.

Registrant used disputed citybank.org Internet domain name in bad faith effort to profit from CITI and CITIBANK trademarks of provider of financial services, in violation of Anticybersquatting Consumer Protection Act (ACPA), where, among other things, registrant did not have any trademark or other intellectual property rights in domain name, registrant had not engaged in prior use of disputed domain name in connection with bona fide offering of any goods or services prior to registering domain name, and use of domain name was commercial in nature.   Citigroup, Inc. v. Chen Bao Shui, E.D.Va.2009, 611 F.Supp.2d 507.

Alleged bad faith of defendant promoter in its subsequent use of registered www.moscowcatstheatre.com domain name in its promotion of accused performance was sufficient to support cybersquatting claim under Lanham Act, although promoter previously had not registered domain name in good faith.   Kuklachev v. Gelfman, E.D.N.Y.2009, 600 F.Supp.2d 437.

Competitor registered and/or used numerous Internet domain names that were confusingly similar to trademarks of owner with bad faith intent to profit, as required for claim under Anticybersquatting Consumer Protection Act (ACPA), where, among other things, competitor did not have any intellectual property rights in any of domain names, intent of competitor was to profit from poor typing abilities of consumers trying to reach owner’s websites, and competitor acquired thousands of domain names that were confusingly similar to any number of famous marks.   Verizon California Inc. v. Navigation Catalyst Systems, Inc., C.D.Cal.2008, 568 F.Supp.2d 1088, 88 U.S.P.Q.2d 1771.

Competitor of Canadian corporation engaged in the business of designing, manufacturing, and selling “fine jewelry quality” finger splints, had a bad faith intent to profit from use of Canadian corporation’s mark in its internet domain name, as required under cybersquatting statute, even though statutory factors were more or less evenly balanced, in light of competitor registering the domain name for the express purpose of keeping Canadian corporation from using that domain name.   Silver Ring Splint Co. v. Digisplint, Inc., W.D.Va.2008, 567 F.Supp.2d 847, 88 U.S.P.Q.2d 1932 , subsequent determination 2008 WL 2967458.

Use of “ATLASCOPCOIRAN.COM” and other similarly named Internet domain names in conjunction with a “phishing” scam established a bad faith intent to profit from “ATLAS COPCO” trademark, as element of in rem cyberpiracy claim brought by owners of “ATLAS COPCO” trademark pursuant to Anticybersquatting Consumer Protection (ACPA).   Atlas Copco AB v. Atlascopcoiran.com, E.D.Va.2008, 533 F.Supp.2d 610.

Owner of Internet domain names satisfied bad faith intent to profit requirement, for liability under Anticybersquatting Consumer Protection Act (ACPA), by selecting names incorporating trademark “FAEGRE,” used by law firm; none of the domain names included any name by which owner was known, owner did not previously use names in connection with sale of any goods or services, presence of names diluted law firm’s goodwill, and owner sought to profit from names by offering to discontinue sites, if law firm would withdraw financial support from organizations supporting legalized abortion.   Faegre & Benson, LLP v. Purdy, D.Minn.2006, 447 F.Supp.2d 1008, 82 U.S.P.Q.2d 1923.

Owner of famous “Foxwoods” mark for casino operation established cybersquatting by owner of “foxwood.com” website domain name;  accused name was confusingly similar to mark, and website owner had adopted name with bad faith intent to profit from mark.   Mashantucket Pequot Tribe v. Redican, D.Conn.2005, 403 F.Supp.2d 184.

Internet domain names “VenetianGold.com” and “VenetianGoldCasino.com,” among others, for international gambling websites were registered with bad faith intent to profit from casino’s “VENETIAN” and related marks, for purpose of determining whether their registration violated Anti-Cybersquatting Consumer Protection Act (ACPA);  registrant had no intellectual property rights in names at the time of registration, and his conduct demonstrated intent to divert United States customers from casino’s online location for commercial gain.  Venetian Casino Resort, LLC v. Venetiangold.Com, E.D.Va.2005, 380 F.Supp.2d 737, 76 U.S.P.Q.2d 1609.

French corporation selling spinal surgery products under trademark ARGOS satisfied requirement for stating cybersquatting claim under Lanham Act, that registrant of domain name “www.argos-u.s.com” have bad faith intent to profit from appropriated trademark, through allegation that registrant attempted to trade upon goodwill associated with ARGOS mark, even though registrant did not offer to sell domain site to corporation.   Argos v. Orthotec LLC, D.Del.2004, 304 F.Supp.2d 591, 71 U.S.P.Q.2d 1203.

Competitor, who registered chemical injection valve manufacturer’s trademark as Internet domain name in order to force manufacturer to remove competitor’s mark metatags from manufacturer’s website, had “bad faith intent” needed to establish manufacturer’s cybersquatting claim;competitor registered domain name to improve its bargaining position in commercial dispute, and used it to attract potential customers to its website.   Flow Control Industries Inc. v. AMHI Inc., W.D.Wash.2003, 278 F.Supp.2d 1193, 67 U.S.P.Q.2d 1452.

Internet domain name registrant violated Anticybersquatting Consumer Protection Act (ACPA) by registering names “Pinehurstresort.com” and “Pinehurstresorts.com,” which were similar to trademark “Pinehurst Resort and Country Club” used by famous golf club; registrant showed bad faith, through lack of any previous use of Pinehurst name, failure of argument that use of name was for parody purposes, intent to divert web searchers from golf club to their site, to be exposed to anticapitalist message, willingness to sell rights to names, and warehousing of thousands of domain names of large corporations and law firms.   Pinehurst, Inc. v. Wick, M.D.N.C.2003, 256 F.Supp.2d 424, 66 U.S.P.Q.2d 1610.

Website operator acquired “cosmos.com” and related domain names in bad faith, for purpose of determining whether it violated anticybersquatting statute; operator’s failure to conduct trademark search prevented it from discovering senior user’s incontestable trademarks, domain names were unrelated to operator’s common name, and operator was not engaged in any protected, non-commercial conduct.   Eurotech, Inc. v. Cosmos European Travels Aktiengesellschaft, E.D.Va.2002, 213 F.Supp.2d 612.

Operators of Internet websites, advertising online gambling, violated Anticybersquatting Consumer Protection Act (ACPA) by registering numerous domain names incorporating trademarked phrase “Casino de Monte Carlo,” used by competitor in advertising its casinos; use of names created confusion, and bad faith was shown through literal copying of well-established mark, evidence of intent to divert customers, and lack of independent reasons for adopting names.   International Bancorp, L.L.C. v. Societe Des Baines De Mer Et Du Cercle Des Etrangers A Monaco, E.D.Va.2002, 192 F.Supp.2d 467, 62 U.S.P.Q.2d 1621, affirmed on other grounds 329 F.3d 359, 66 U.S.P.Q.2d 1705, certiorari denied 124 S.Ct. 1052, 540 U.S. 1106, 157 L.Ed.2d 891.

Registrant of Internet domain names “victoriasexsecret.com,” “victoriassexsecret.com,” “victoriasexysecret.com” and “victoriassexysecret.com,” showed bad faith intent to profit from strong lingerie trademark “VICTORIA’S SECRET,” as required for violation of Anticybersquatting Consumer Protection Act (ACPA); there was no connection between domain names and their proposed use with adult entertainment websites that were never established, domain name owners once offered to transfer names, there was no reason for use of word “secret” in names other than desire to capitalize on strong trademark, and rationale for “Victoria,” that model of that name was to be associated with sites, ended when model disassociated herself from name owner.   Victoria’s Cyber Secret Ltd. Partnership v. V Secret Catalogue, Inc., S.D.Fla.2001, 161 F.Supp.2d 1339.

Defendant registered and used ERNESTANDJULIOGALLO.COM domain name with bad faith intent to profit from its sale, within meaning of Anti-Cybersquatting Consumer Protection Act (ACPA); defendant had no intellectual property interest in name aside from domain name registration, and had registered it in hopes of selling it.   E. & J. Gallo Winery v. Spider Webs Ltd., S.D.Tex.2001, 129 F.Supp.2d 1033, 96 A.L.R.5th 575, affirmed 286 F.3d 270, 62 U.S.P.Q.2d 1404.

Evidence supported finding that second-level Internet domain names identical or confusingly similar to the mark of Harrods Limited of the United Kingdom (Harrods UK) were registered by Harrods of Argentina with a bad faith intent to profit, in violation of the Anticybersquatting Consumer Protection Act (ACPA), though both companies had legitimate rights to use the “Harrods” name in different geographical regions, as Harrods of Argentina had registered almost 300 Harrods-related domain names, containing large numbers of English words but generally not their Spanish counterparts, covering a wide variety of goods and services offered by Harrods UK but not by Harrods of Argentina, and made use of a consultant’s report indicating an intent to use the names to market its goods and services to non-South American consumers in a manner calculated to divert and deceive consumers seeking to do business with Harrods UK.   Harrods Ltd. v. Sixty Internet Domain Names, C.A.4 (Va.) 2002, 302 F.3d 214, 64 U.S.P.Q.2d 1225.

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ACPA: Bad Faith provisions:

(B)(i) In determining whether a person has a bad faith intent described under subparagraph (a), a court may consider factors such as, but not limited to

(I) the trademark or other intellectual property rights of the person, if any, in the domain name;

(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

(III) the person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

(IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

(V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;

(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;

(VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;

(VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

(IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of subsection (c) of this section.

15 U.S.C.A. § 1125 (West)