Notes & Comment
Vol. 2004, No. 8
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Cybersquatting and the First Amendment
A byproduct of the internet's vast potential is the ability of some to sow mischief at the expense of others. One example of this is "cybersquatting", the controversial practice of registering and using in bad faith a domain name that is confusingly similar to another's famous trademark. But do anti-cybersquatting laws conflict with the First Amendment? Can't "cybersquatters", for instance, use domain names that include others' trademarks to engage in a discussion of important public issues over the internet? That was one of the primary issues before the U.S. Court of Appeals for the Eighth Circuit in Coca-Cola Company v. Purdy, Nos. 02-2894, 03-1795 and 03-1929 (September 1, 2004), available at www.ca8.uscourts.gov (search Case Information, Opinions tab, Opinions by month/year tab).
Coca-Cola Company v. Purdy
The defendant in Purdy was a pro-life activist who had registered domain names that included famous and distinctive trademarks of several major U.S. corporations, including Coca-Cola Company, The Washington Post Company, McDonalds Corporation and PepsiCo, Inc. The domain names had variants of the plaintiffs' registered trademarks, such as "drinkcoke.com", "mymcdonalds.com", "mypepsi.org", and "my-washingtonpost.com". The defendant typically linked these domain names to one or more websites that he maintained which included pro-life commentary and graphic pictures of aborted fetuses. At least one of his websites sold merchandise with pro-life themes. At first, the defendant's websites did not refer to the plaintiff companies, their products or their purported positions on abortion. But once litigation began, his websites did link the plaintiffs to the abortion issue by name.
In 1999, Congress passed the Anticybersquatting Consumer Protection Act (ACPA) 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. See, 15 U.S.C. §1125(d). 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, a practice that was prevalent at the time. The law also sought to stop the use of others' trademarks in domain names that took 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.
Asking for emergency relief under the ACPA, including an injunction, the plaintiffs in Purdy sought to stop use of their trademarks in the defendant's domain names and websites, and they requested an order transferring all such domain names to the respective plaintiff companies. The trial court issued several orders against the defendant and eventually transferred the domain names to the plaintiffs. But that didn't deter the defendant, who registered new domain names and continued to use the plaintiffs' trademarks in domain names that linked to his advocacy websites. This resulted in contempt of court proceedings against the defendant. He then appealed the trial court's orders, claiming various defenses under the ACPA and asserting that his use of the subject domain names was protected by the First Amendment.
The ACPA Issues
The ACPA's threshold language is as follows:
"(1)(A) A person shall be liable…if…that person (i) has a bad faith intent to profit from [the plaintiff's] mark…; and (ii) registers, traffics in, or uses a domain name that -- (I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark; [or] (II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; …" (15 U.S.C. §1125(d)).
The statute sets forth nine nonexclusive factors used to determine whether a defendant has a bad faith intent to profit from use of the plaintiff's mark. (15 U.S.C. §1125(d)(1)(B)(i)(I-IX)). The ACPA also includes a "safe harbor" provision that says "[B]ad faith intent …shall not be found in any case in which the court determines that the [defendant] believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful." (15 U.S.C. §1125(d)(1)(B)(ii)).
The trial court held, and the Court of Appeals affirmed, that the plaintiffs had made a sufficient case of cybersquatting under the statute to warrant entry of a preliminary injunction. While the statute suggests that some monetary motive is required, and evidence of that was present here, the Court made clear that an expansive interpretation of the "intent to profit" requirement is appropriate to achieve the ACPA's goals.
In analyzing the nine nonexclusive indices of "bad faith intent to profit", the Court concluded that eight of the nine factors cut against the defendant. Moreover, the Court said, the defendant could not claim protection under the ACPA's "safe harbor" provision because he knew or had reason to believe that his continuing actions were not lawful coming, as they did, after cease and desist letters were received from the plaintiffs and court orders had been entered against him, and after his involvement in prior unrelated internet litigation involving domain names.
First Amendment Defense
The defendant also maintained that the First Amendment entitled him to use the domain names at issue to drive internet users to his various advocacy websites, which contained political expression and criticism of the plaintiffs. The Court agreed that the First Amendment protects his right to use the internet to engage in advocacy and to express himself politically.
However, the First Amendment does not, said the Court, protect the defendant's "misleading use of plaintiffs' marks in domain names to attract an unwitting and possibly unwilling audience to [defendant's] message. Use of a famous mark in this way could be seen as the information superhighway equivalent of posting a large sign bearing a McDonald's logo before a freeway exit for the purpose of diverting unwitting travelers to the site of an antiabortion rally."
Citing a long list of cases, the Court held that the First Amendment does not protect the use of another's trademarks where such use is likely to create confusion as to the source or sponsorship of the speech or goods in question, or use of a trademark in a domain name that creates the likelihood of confusion as to the source of sponsorship of the host website.
Summary and Conclusion
Context is everything, and some facts often dictate the proper outcome. This might be the conclusion one draws from the decision in Coca-Cola Company v. Purdy. The ACPA plugged a hole in the trademark statute that had been profitably exploited by internet entrepreneurs who registered domain names leveraging others' trademarks. The ACPA is not an absolute bar to obtaining and using domain names that include the trademarks of others -- the statute's nine factors helping to determine "bad faith intent to profit" tell us that, as does its "safe harbor" provision. And there is leeway when legitimate First Amendment issues are presented. Coca-Cola Company v. Purdy demonstrates that, at least under the ACPA and the constitution, people are free to engage in discussion of important public issues in cyberspace provided they respect the intellectual property rights of others.
© Matthew Joseph 2004. 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.