February 2009 Issue

Civil Cases

Frayne v. Chicago 2016,
2009 WL 65236 (N.D. Ill. Jan. 8, 2009)

ABSTRACT
The Northern District of Illinois dismissed plaintiff’s two declaratory judgment claims relating to reverse domain name hijacking.  The court initially ruled that reverse domain name hijacking under Section
32(2)(D)(v) of the Lanham Act could not be established if a domain name had not yet been “suspended, disabled, or transferred” from the domain name owner.  There was no such action here because plaintiff filed this action before the UDRP Panel decided defendant’s UDRP complaint.  Additionally, the court held that plaintiff’s claim for “attempted” reverse domain name hijacking did not exist under the Lanham Act.

CASE SUMMARY

FACTS
Plaintiff Stephen Frayne registered the domain name chicago2016.com in August 2004, apparently unaware that the City of Chicago intended to bid for the 2016 Summer Olympic Games.  The chicago2016.com domain name was one of 38 similar “potential host city” and “Olympic year” domain names Frayne registered a few days prior to the commencement of the 2004 Athens Olympics.  In July 2006, the City of Chicago formed Chicago 2016, a private corporation established to represent the city in its efforts to court the 2016 Olympic Games.  Chicago 2016 filed an application to federally register CHICAGO 2016 as a trademark and received a registration in 2008.  CHICAGO 2016 assigned its rights to the CHICAGO 2016 mark to the U.S. Olympic Committee (“USOC”) in April 2007, and the USOC licensed Chicago 2016 to use the mark.  Chicago 2016 contacted Frayne and inquired if “he was entertaining offers on or would be willing to part with” the chicago2016.com domain, but Frayne refused to sell.  When Frayne refused Chicago 2016’s subsequent attempts to acquire the domain, Chicago 2016 filed a complaint under the Uniform Domain Name Dispute Resolution Policy (“UDRP”) alleging that Frayne had registered and used the chicago2016.com domain name in bad faith. 

Before the UDRP Panel could decide the complaint, Frayne filed this suit in federal court seeking a declaratory judgment regarding various Lanham Act trademark claims, including reverse domain name hijacking under Section 32(2)(D)(v) of the Lanham Act and “attempted” reverse domain name hijacking.  Frayne also alleged violations of his free speech and equal protection rights.  Chicago 2016 moved to dismiss certain claims of Frayne’s complaint.

ANALYSIS
In general, reverse domain name hijacking occurs when a trademark owner attempts to secure another’s domain name through a UDRP proceeding or litigation, but the trademark owner does not have any legal basis for doing so.  Frayne conceded the invalidity of his claim for reverse domain name hijacking under the Lanham Act, which requires the improper suspension, disabling, or transfer of a domain name by a third party through the use of a domain name registrar’s dispute resolution policy.  Because Frayne’s domain name had not been “suspended, disabled, or transferred” as required by Section 32(2)(D)(v), the court dismissed his claim for reverse domain name hijacking.

Regarding Frayne’s claim for “attempted” reverse domain name hijacking, the court found that such a claim did not exist in the plain language of the Lanham Act.  In support of his claim, Frayne relied on General Media Communications, Inc. v. Crazy Troll, in which a New York district court granted the plaintiff’s motion for declaratory relief, concluding that a UDRP Panel’s finding of actual or attempted domain name hijacking under UDRP rules was incorrect.  The court distinguished Crazy Troll, finding that while the rules for UDRP proceedings permitted a UDRP Panel to find that a party had initiated proceedings in bad faith in an attempt to improperly deprive a registrant of its domain name (i.e., reverse domain name hijacking under the UDRP), that case involved the application of UDRP rules, not the Lanham Act, which controls here.  Because attempted domain name hijacking does not exist as a cause of action under the Lanham Act, the court dismissed Frayne’s claim. 

Finally, the court denied Chicago 2016’s motion to dismiss Frayne’s constitutional claims that Chicago 2016 violated his free speech and equal protection rights.  Chicago 2016 argued that it was not a state actor subject to Frayne’s claimed constitutional protections and, even if it were, the act of asserting one's trademark rights against another in an arbitration forum was protected conduct under the Noerr-Pennington immunity doctrine, which protects parties from suits for actions involving litigation, lobbying efforts, and public statements.  The court ruled that Frayne had sufficiently alleged that Chicago 2016 was a state actor at this stage of litigation.  Moreover, Frayne raised and the court recognized an exception to the Noerr-Pennington immunity doctrine involving “sham” lawsuits in which “persons use the governmental process, as opposed to the outcome of that process, to directly harm or harass another party.”  Because Frayne alleged that the UDRP proceeding was a sham designed to injure him, it rendered the Noerr-Pennington doctrine inapplicable and the court denied Chicago 2016’s motion to dismiss these claims.  Similarly, Frayne’s allegations of wrongful conduct on Chicago 2016’s part precluded application of a claim of immunity under Illinois state law in response to Frayne’s claims under the Illinois constitution.  Finally, the court also declined to dismiss Frayne’s equal protection claims, finding that Frayne’s allegation that Chicago 2016 had asserted its trademark rights in a disparate manner was sufficient at this juncture to allow these claims to proceed.

CONCLUSION
To successfully allege reverse domain name hijacking under the Lanham Act, a registrant’s domain name must have been improperly “suspended, disabled, or transferred” through the use of a registrar’s dispute resolution processes.  If this loss of control of the domain name has not yet occurred, as was the case here, there is no claim for reverse domain name hijacking.  Moreover, the Lanham Act does not provide for a claim for “attempted” reverse domain name hijacking that would provide domain name owners with an offensive weapon to attempt to preempt such actions by trademark owners.