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Invoking the ACPA Against Defendant with Knowledge of Plaintiff’s Use in Commerce Prior to Application for Trademark

The disjunctive feature of the Anticybersquatting Consumer Protection Act makes it less tolerant than the UDRP of registrants of domain names identical or confusingly similar to trademarks. The ACPA is also unlike the UDRP in that it requires the court to qualitatively balance a basket of nine factors, which includes UDRPs four bad faith [rolled into factors 5 and 6) and three affirmative defenses [factors 2, 3 and 4). Factor 1 which asks whether the defendant owns any trademark or other intellectual property in implicit in paragraph 4(c) of the Policy. While a concurrent right in a trademark is a legitimate interest, a legitimate interest is not a legal right. The additional two factors, “registration or acquisition of multiple domain names” [factor 8] and “extent to which the mark is distinctive and famous” [factor 9] are implicit in UDRP and although not expressly named are never far from the assessment. Because of the conjunctive feature of the UDRP it is possible for a respondent to prevail, Volvo Trademark Holding AB v. Volvospares / Keith White, D2008-1860 (WIPO February 10, 2009) but as a defendant to succumb in an ACPA suit, Volvo Trademark Holding AB v. Volvospares, 1:09 cv 01247 (E.D. Va. April 1, 2010).

This Note, however, reports on an ACPA case having factual circumstances familiar to UDRP disputes, with the same result. The plaintiff in Carnivale v. Staub, LLC, Civ. No. 08-764-SLR (DDel December 13, 2010) owned a common law trademark for “the affordable house” which predated registration of the domain name and offered books and architectural blueprints from its website at <affordablehouse.com>. It subsequently but only after the defendant registered the domain name filed a 1(a) application with the USPTO for registration of THE AFFORDABLE HOUSE on the principal register. Significantly, the defendant admitted knowledge of the plaintiff and its website prior to its registering <theaffordablehouse.com>. The district court held that the defendant registered the domain name in bad faith.

This result caused one blogger to raise an alarm that “[m]ore often than not, the ACPA has simply become yet another weapon in nefarious trademark owners’ arsenals to use against speakers that the trademark owners generally wish, for one reason or another, would go away.” Even more galling to this blogger

the Courts have facilitated this evolution by their misapplication of the ACPA criteria, permitting ACPA actions to succeed where there ain’t no warehousing, there ain’t no multiple domains, there ain’t no extortion, and there ain’t nothing nefarious — there’s just speech that the trademark owner doesn’t like.

The question is, Has the ACPA really, really become “yet another weapon in nefarious trademark owners’ arsenals”? Or, is the decision of the garden variety type that would have fared similarly if brought in a UDRP proceeding. One part of the ACPA judgment which is outside UDRP’s scope is an assessment of damages for $25,000. Otherwise, Carnivale is not “a poster-child example of a court’s failure to apply the ACPA in a way that has anything to do with cybersquatting.” While it is true that THE AFFORDABLE HOUSE is on the lower end of the trademark classification scale it is nevertheless, the plaintiff having received a registration on the principal register and established secondary meaning, it is “inherently distinctive” [factor 9].

It is clear from the district court’s conclusion that prior knowledge of the plaintiff is the key factor: “Although defendants did not hoard and sell domain names registered under a false name [factor 8], defendants settled on the domain name www.theaffordablehouse.com to promote their business [factor 5], even after learning that plaintiff maintained a website at www.affordablehouse.com for similar commercial purposes.” A mind game may be played as to whether the outcome would have been different if the defendants had no knowledge of the plaintiff’s trademark when they registered the descriptive phrase as a domain name. After all, without knowledge and offering goods or services consistent with the domain name — that is there is “some semantic relationship between [it] and the website” [See Friday’s Note, 7(S) Personal GmbH v. Zhaohua Luo, D2010-1953 (WIPO February 3, 2011)]– is not illegtimate and supports a conclusion in favor of defendant [factor 3 which is equivalent to paragraph 4(c)(i) of the Policy].

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