Notes & Comment
Volume 2005, No. 3
(View Archives)
Trademarks
"Dome-Mane Names": When Do Domain Names Infringe Trademarks?
The more we see of the internet, the more we see of lawsuits trying to regulate its use. A practice that draws courts' frequent attention -- one at the junction of free speech and intellectual property rights -- is the use of "trademarked" domain names to criticize the trademark owner's business. We have discussed this topic before (Please see our Notes and Comment, "Cybersquatting and the First Amendment"), but the decisions keep coming, it's an important issue and lessons continue to be learned.
The latest such case is Bosley Medical Institute, Inc. v. Kremer, Civ. No. 04-55962 (U.S. Court of Appeals for the Ninth Circuit, April 4, 2005), a tale of woe pitting an unhappy hair transplant patient against his former doctors.
Splitting Hairs; Splitting Results
Michael Kremer ("Kremer") was dissatisfied with hair restoration services provided to him by the Bosley Medical Institute ("Bosley"). He registered at least two domain names, including "BosleyMedical.com", that provided access to multiple internet forums he set up to criticize Bosley's business. "Bosley Medical" is a registered trademark of Bosley. Having no sense of humor and little tolerance for such things, the hair restoration company filed a lawsuit against Kremer for trademark infringement and dilution under the federal Lanham Act, 15 U.S.C §1051, et seq., and "cybersquatting" under the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. §1125(d).
The trial court granted summary judgment for Kremer on all claims, but the Ninth Circuit's ruling was a bit of win-win for everyone. The Court affirmed the trial court's finding of non-infringement by Kremer under the Lanham Act, but sent the matter back to the trial court for more work on the ACPA claim. It reversed the trial court's decision against Bosley on a state law issue that we do not now consider.
When Does a Domain Name Not Infringe a Trademark?
The essence of Bosley's trademark infringement and dilution claim against Kremer was that the hostile "BosleyMedical.com" domain name was used in commerce and infringed Bosley's registered trademark. The Court of Appeals found that while the trial court employed the wrong legal standard for infringement, it had reached the correct result. Bosley's infringement lawsuit needed to establish that Kremer had used the offending domain name "in connection with the sale…of goods or services…" The record showed that Kremer's use of "BosleyMedical.com" was "non-commercial" consumer commentary protected by the constitution. The gist of the Court's finding was that unless an otherwise "infringing" mark used on a website, or included in a domain name, is used in connection with the sale of someone's goods and services, a trademark infringement and dilution claim could not succeed.
Bosley argued that providing links from a "noncommercial" website to a commercial website can constitute use "in connection with the sale of goods or services." The Ninth Circuit agreed that this was possible but concluded that Kremer's site did not contain links to commercial websites, nor did he advertise anyone's goods or services (his own or a third party's). In other words, the record showed that Kremer's site was used for purely non-commercial consumer commentary. Providing links to other non-commercial sites that advertised was not enough.
Bosley next asserted that Kremer had developed his site to extort Bosley by creating incentive to buy the infringing domain name from Kremer to silence him. The Court acknowledged that such activity could establish the "in connection with the sale of goods or services" element of trademark infringement, but found no evidence that Kremer sought to sell the domain name to Bosley or anyone else.
Finally, Bosley maintained that Kremer's site drove customers away from the Bosley websites, and that its goods and services were "connected" to Kremer's use of the infringing domain name. The Court acknowledged that there is authority in other circuits for this proposition, but rejected such authority because it failed to focus on whether the defendant was using the infringing mark in connection with the defendant's own goods and services.
The Cybersquatting Claim
The ACPA seeks to prevent bad faith use for profit of a domain name that is confusingly similar to a distinctive trademark or is confusingly similar to or dilutes a famous trademark. This extension of the federal trademark statute was designed, among other things, to prevent profiteering in domain names at the expense of the legitimate trademark owners. The law also seeks to stop use of others' trademarks in domain names that take advantage of the good will in those marks to divert internet users elsewhere. Key to bringing a claim under the ACPA is the defendant's bad faith intent to profit from the domain name. Courts focus on whether the defendant's domain name is confusingly similar to the plaintiff's trademark.
Under the ACPA, the Court held, the inquiry does not stop when there is a finding of "no commercial use" by a hostile domain name. Here, the trial court incorrectly cut off consideration of the ACPA issue once it found Kremer's use of "Bosley Medical" was "non-commercial" consumer commentary. Since even "non-commercial" use of another's mark can amount to a violation of the ACPA if the statutory elements otherwise exist, the trial court needed to do more work. The Ninth Circuit sent the case back for further consideration based upon additional fact finding.
Summary and Conclusion
Because the Ninth Circuit's decision in Bosley Medical Institute v. Kremer supervised specific rulings by the trial court below, the case is not a comprehensive discussion of when hostile "infringing" domain names might always or might never constitute trademark infringement. It involves a smaller piece of the domain name-free speech-trademark infringement puzzle.
Bosley's real value is that it adds to the growing body of case law wrestling with hostile use of domain names that "infringe" another's registered trademarks. Different courts continue to have different approaches to these very same issues. One common thread running throughout all of them, however, may be that trademark law and the constitutional right to free speech sometimes clash and are often reconciled -- or not -- based upon the nature of the facts and, yes, the behavior of the parties.
© Matthew Joseph 2005. Law Offices of Matthew Joseph, San Mateo, California, practices in the areas of intellectual property licensing, commercial real estate leasing, and corporate and business transactions. No legal advice is intended by the information provided herein and recipients should independently consult counsel before taking any action related to this subject matter.