Plaintiff owned the popular “joecartoon.com” website featuring animated cartoons such as “Frog Blender,” “Micro-Gerbil,” and “Live and Let Dive.” Plaintiff’s website and cartoons were well known, with the “joecartoon.com” website averaging over 700,000 hits per month. In November 1999, defendant registered five domain names consisting of slight misspellings of “joecartoon.com.” Each of defendant’s websites “mousetrapped” visitors so they could exit only after clicking on a succession of ads, which resulted in a profit for defendant. Almost immediately after plaintiff brought this suit, defendant turned his sites into “political protest” pages, protesting (1) defendant’s graphic depictions of animals being brutalized, (2) the Internet Corporation for Assigned Names and Numbers (“ICANN”), and (3) the ACPA. In an earlier decision, plaintiff’s motion for summary judgment was denied because defendant raised a genuine issue of material fact under the ACPA. In another decision, however, the court granted plaintiff’s motion for preliminary injunction on its ACPA claim. The court held that: (1) plaintiff’s JOE CARTOON mark was distinctive and famous; (2) defendant’s domain names were practically identical to plaintiff’s mark; and (3) defendant acted with a bad-faith intent to profit. Regarding defendant’s bad faith, the court considered many factors. First, defendant registered thousands of misspellings of popular trademarks and celebrities’ names, and the profits from those activities were approaching $1,000,000 per year. Second, defendant’s attempt to characterize his website as a venue for political commentary in support of animal rights was not credible because defendant did not put up the protest pages until after he was sued, and he owned the domain names “sexwithanimal.com” and “girlwithanimals.com.” Lastly, the court rejected defendant’s argument that a retroactive application of the ACPA to domain names registered before its passage violated the Fifth Amendment right to due process. Following the Second Circuit’s reasoning in Sporty’s Farm, the court noted that an injunction would not be unconstitutional because it only redressed violations that continued after the ACPA’s passage and was therefore prospective. The court thus preliminarily enjoined defendant from using or abetting the use of any of the infringing domain names at issue “and any other cognate domain name,” and ordered defendant to deactivate the infringing domain names at its own expense.
The court granted plaintiff’s renewed motion for summary judgment on June 5, 2000, permanently enjoining defendant from using any domain name substantially similar to plaintiff’s marks, and ordering the transfer of the five disputed domain names to plaintiff. In a later ruling on plaintiff’s motion for statutory damages and attorney’s fees, the court awarded plaintiff statutory damages of $10,000 per domain name for a total of $50,000, finding that defendant’s conduct was “utterly parasitic and in complete bad faith.” Furthermore, “based on the egregiousness of Zuccarini’s conduct and his complete lack of contrition,” the court held that the case was “exceptional” under 15 U.S.C. § 1117(a) and that the plaintiff was entitled to recover attorney’s fees and costs totaling more than $39,000.
On appeal, defendant claimed that the registration of purposeful misspellings of a trademark, or “typosquatting,” was not actionable under the ACPA. Rejecting this argument, the Third Circuit noted that the statute also covers domain names that are confusingly similar to distinctive and famous marks. “[A] reasonable interpretation of conduct covered by the phrase ‘confusingly similar’ is the intentional registration of domain names that are misspellings of distinctive or famous names, causing an Internet user who makes a slight spelling or typing error to reach an unintended site.” Noting that Zuccarini’s intent to profit from confusion paralleled an example included in the legislative history of the ACPA, the court concluded that defendant’s conduct was a “classic example of the specific practice that the ACPA was designed to prohibit.” Defendant also argued that his websites were protected by the First Amendment because he used them as self-described “protest pages,” such that this “protest” use fell under the ACPA’s “safe harbor” provision barring a finding of bad-faith intent where the person “believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.” Defendant admitted, however, that he posted these protest pages only after receiving plaintiff’s complaint. The court found no authority where “fair use” after the filing of a complaint exonerated earlier unlawful activity. Even if such authority existed, it would be contrary to the orderly enforcement of the trademark and copyright laws. The Third Circuit thus affirmed the district court’s finding of bad-faith intent to profit. The appellate court also upheld the district court’s granting of a permanent injunction, statutory damages of $10,000 for each domain name, and attorney’s fees. Defendant argued that the assessment of statutory damages was punitive in nature because he used the website for only 60 days before being sued. There was nothing in the ACPA, however, that required the court to consider duration of the infringement when calculating damages. The Third Circuit also agreed with the district court’s finding that defendant’s “flagrant” conduct warranted attorney’s fees.