SCOTUS Petition Challenges 9th Circuit Ruling re: ACPA Contributory Cybersquatting

We will be covering the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d), in class this semester, but a new case was appealed to the Supreme Court this week that I thought might be of interest.  This blog entry will act as a bit of a preview of laws, cases, and legal terminology we will see and discuss this semester.

When a party appeals a case to the Supreme Court of the United States (SCOTUS), which is the highest Court in the United States, the appeal has a special name: “petition for writ of certiorari” also called “cert” or “cert petition.”  This petition asks the court a single question of law (or sometime several questions).

In this current case the cert petition was filed in a case titled Petroliam Nasional Berhad v., Inc. (U.S., No. 13-1255), appealing a Dec. 4th decision by the U.S. Court of Appeals for the Ninth Circuit, related to the ACPA.

The ACPA is a 1999 federal law authorizing a trademark owner to obtain a federal-court order transferring ownership of a domain name from a “cybersquatter” to the trademark owner.

Cybersquatting is an act of reserving a domain name on the Internet and then seeking to profit by selling or licensing the name to the company, person, etc.  that has an interest in being identified with that domain name.

To prove a violation of the ACPA, the trademark’s owner must show that (1) the mark and the domain name are identical or confusingly similar; (2) the mark was distinctive when the domain name was first registered; (3) the trademark’s owner used the mark commercially before the domain name was registered; and (4) the domain registrant acted in bad faith and intended to profit from the trademark’s use.

The petitioner in the present case is Petroliam Nasional Berhad, a Malaysian corporation owned by the government, commonly known as “Petronas.” The corporation has a U.S. trademark registration on the term “Petronas” with respect to chemical products, petrochemicals, oil, gasoline and related goods.

Petronas initially objected to the owner of domain names and redirecting users to adult-oriented content.  It blamed the domain registrar, Inc., for not taking action and filed a lawsuit alleging something called “contributory cybersquatting” under the ACPA.  “Contributory cybersquatting” expands liability for cybersquatting to persons or companies who aid and abet cybersquatters.  In this case, Petronas was stating that GoDaddy had “aided and abetted” the cybersquatters, and therefore should be held responsible for some of the wrongdoing.

The 9th Circuit affirmed an award of summary judgment (a motion that allows the speedy disposition of a controversy without the need for a long, expensive trial) in favor of GoDaddy, ruling that the plain meaning of the ACPA, the legislative history, and the goals of the law did not support the idea of an action for “contributory cybersquatting.”  The 9th Circuit court said that something called “contributory trademark infringement” was available to use as a law in this case, but not contributory cybersquatting.

GoDaddy had argued, at the lower court, that a contributory cybersquatting claim does not exist.  The 9th Circuit considered whether the ACPA allowed a claim of contributory cybersquatting.  A few prior cases had said contributory cybersquatting was valid, but only in “exceptional circumstances.”  But, after a short opinion, the 9th Circuit flatly stated the ACPA does not provide for contributory liability. The court gave two reasons for its conclusion:

1) The text of the ACPA does not expressly provide for “secondary liability” like contributory cybersquatting, where a third party, like Go Daddy, is held liable for the actions of others. The 9th Circuit said if Congress wanted to have secondary liability in a statute, it knows exactly how to include it in the language, and it declined to do so here.

2) The ACPA created a new cause of action when it was passed in 1999. The ACPA was enacted precisely because there was no common law for cybersquatting. The 9th Circuit said it’s fair to conclude, then, that the common law doctrines of contributory liability were not a part of the ACPA.

And that’s exactly where Petroliam Nasional Berhad disagreed, and filed a petition for SCOTUS to appeal the 9th Circuit court’s decision.  The question presented in the cert petition is:

“Do the normal rules for contributory trademark infringement…apply to trademark infringement by “cybersquatting” under Section 43(d) of the Lanham Trademark Act?”

Next SCOTUS term, we will have an answer.


IHOP vs. Evangelical Group: A Sticky Situation

International House of Pancakes LLC (IHOP) filed a trademark infringement suit against a church in Missouri.  The complaint accuses the International House of Prayer of improperly using the breakfast restaurant’s famous acronym. IHOP alleges that the House of Prayer is guilty of dilution, trademark infringement and unfair competition in violation of the Lanham Act.  We have studied these laws in class this semester, so this is a good chance to review the trademark laws in a typical trademark case

According to the complaint, IHOP was founded in Toluca Lake, Calif., in 1958.  By1960, the company began to franchise. The complaint states that use of the “IHOP” trademark began as early as 1973.

Remember that under U.S. common law a company can claim trademark of a word, phrase, symbol, or design by being the first to use the mark in commerce.  “Use in commerce” is one of the most important aspects of trademark law.  Therefore, the lawyers who drafted the complaint carefully stated that there are 1,500 IHOP restaurants in the U.S., including at least one in every state, with 45 restaurants located in Missouri alone (where the suit was filed).

Additionally, the complaint plainly states, “Each of the IHOP marks is distinctive, strong, and widely recognized among the general consuming public as a designation of goods and services originating with, sponsored by, approved by, or affiliated with IHOP.”  Why do they include that language?  That is another important aspect of trademark law.  It is critical to trademark law the mark identifies and distinguishes the source of the goods of one party from those of others in the mind of the public consumer.  Because the public’s perception of the word, phrase, symbol, or design may be relevant to the legal dispute, attorneys will occasional use consumer surveys or public opinion polls as evidence. In trademark cases, the law will protect those marks which, in the minds of the consuming public, identify the producer of the goods.  In this case I don’t believe that IHOP will have to use such evidence – IHOP is an nationally recognized trademark.

In the present case, House of Prayer adopted the names “International House of Prayer,” “IHOP,” “IHOP-KC,” “International House of Prayer University,” and “IHOPU” to refer to House of Prayer Kansas City’s evangelical mission organization and the services it provides.  According to their website, the International House of Prayer Missions Base was founded on May 7, 1999, by Mike Bickle and twenty full-time “intercessory missionaries.”

IHOP alleges confusion based on their mark: “Several persons have either been confused by House of Prayer’s use of ‘IHOP’ or felt the need to clarify whether the “IHOP” reference was to House of Prayer Kansas City or plaintiffs.”

I am fairly sure this is a win for the Pancake IHOP (or a settlement.)

If you want to read the complaint, Justia has the docket linked online.  The case title is IHOP IP LLC et al. v. International House of Prayer et al., in the U.S. District Court for the Western District of Missouri.


Facebook v. Teachbook, Round 2

On May 6th, 2011, Facebook Inc. refiled its trademark infringement suit against LLC, in an Illinois court. Teachbook is a social networking site for teachers. This action comes a few days after the original suit between the two companies was dismissed by a Californian court for lack of jurisdiction. The new case is Facebook Inc. v. LLC, case number 1:11-cv-03052, in the U.S. District Court for the Northern District of Illinois and the complaint is available here.

Facebook filed the new suit in Illinois, where Northbrook, Ill.-based Teachbook is based. Facebook argues in the new complaint that Teachbook selected its name to capitalize on Facebook’s popularity. According to Facebook’s new suit, Teachbook offers social networking features similar to those offered by Facebook and has promoted itself as a substitute for Facebook.

Since many schools forbid teachers from having Facebook accounts due to the risk that students may learn personal information about their teachers, Teachbook allows users to manage their profile so that only other teachers may see it, the suit says.

These substantive arguments were also made in the original California complaint, but the suit was dismissed on jurisdictional grounds before the court had a chance to decide the trademark claims.

As we will discuss in class, in most internet-based cases, jurisdiction is one of the first major hurdles in any legal battle. Jurisdiction is the authority of a court to hear and decide a case.

We will discuss this in more detail in class, but the standard for what is called “long arm jurisdiction” is that there are minimum contacts with forum state such that the maintenance of the suit does not “offend traditional notions of fair play and substantial justice.”  We will also review the different types of personal jurisdiction: “general” or “specific.”

General jurisdiction arises when a defendant maintains ‘continuous and systematic’ contacts with the forum state even when the cause of action has no relation to those contacts. In contrast, specific jurisdiction exists based on isolated or sporadic contact with the forum state if the claim “arises out of” that contact.

So, the California judge ruled that the California court was the wrong venue for the suit because Teachbook does not have any members in California. The court applied the well-known “effects test” from Calder v. Jones, 465 U.S. 783 (1984), which will read in class in a couple of weeks.

Facebook is currently engaged in various pending legal battles with a number of sites that use “-book” in their names, such as Lamebook. Additionally Facebook also sued the startup travel site PlaceBook, which changed its name to TripTrace to avoid an expensive lawsuit.

This case will be important to watch over the semester, and will help settle the question: Can Facebook claim a right to the suffix “-book” on any other company with a web presence?

Who owns the trademark “App Store?” Apple and Microsoft fight

Who owns the trademark “App Store?”  Well, Apple filed a trademark application in 2008, the same year it launched its iTunes App Store and the iPhone 3G.  Now there is a mandatory period that allows opposition from other parties.  Not so surprisingly, Microsoft is disputing the proposed trademark, claiming that the term is a generic one and that “app store” should “continue to be available for use by all without fear of reprisal by Apple.” (Microsoft’s filing is here.)

According to the BBC’s report, Russell Pangborn, Microsoft’s general counsel said “An ‘app store’ is an ‘app store’….Like ‘shoe store’ or ‘toy store’, it is a generic term that is commonly used by companies, governments and individuals that offer apps.”

Apple’s application specifies that the phrase describes “retail store services featuring computer software for use on handheld mobile digital electronic devices and other consumer electronics.”  Under trademark law, a generic name of a product can never function as a trademark to indicate origin. The function of a trademark is to identify and distinguish the goods or services of one seller from those sold by all others.  Because a generic term is not capable of distinguishing the source of one product from another, it cannot be registered as a trademark or service mark on the federal register.  If Microsoft can prove the mark is generic, they may have won the battle… for now.


Boston’s Own “Duck Tours” Trademark Case

The First Circuit has ruled that a lower federal district court erred in concluding that the term “duck tour,” with respect to a sightseeing tour conducted on an amphibious vehicle, is not generic.  The court also ruled that the lower court erred in ruling that the defendant amphibious tour company’s logo (“Super Duck Tours” in Portland, Maine) is likely to cause confusion with the plaintiff’s design mark. (Boston’s Duck Tours) Boston Duck Tours LP v. Super Duck Tours LLC, 1st Cir., No. 07-2078.

This decision, and many other First Circuit decisions, is available at the First Circuit’s Opinions page.