Internet Trademark Case Summaries
Hawes v. Network Solutions, Inc.
Civ. A. No. 1:01CV582 (E.D. Va. Aug. 16, 2001) (dismissing claims against NSI); (Jan. 31, 2002) (dismissing claims against L’Oreal), aff’d on other grounds in part, rev’d in part, and remanded, 2003 U.S. App. LEXIS 13727 (4th Cir. July 9, 2003).
Plaintiff registered the domain name “lorealcomplaints.com” with defendant Network Solutions, Inc. (“NSI”). Defendant L’Oreal later sued plaintiff in France for trademark infringement. NSI issued a registrar certificate for the “lorealcomplaints.com” domain name to L’Oreal’s counsel, who then filed it with the French court, thus giving the court authority over the registration. Plaintiff failed to appear before the French court, and the court entered judgment in favor of L’Oreal and ordered transfer of the domain name to L’Oreal. Plaintiff then sued NSI and L’Oreal claiming that: (1) based on § 1114(2)(D)(i)(II)(bb), NSI breached the Domain Name Registration Agreement when it transferred authority over the name “lorealcomplaints.com” to the French court; and (2) based on § 1114(2)(D)(v), his registration of “lorealcomplaints.com” did not violate the Lanham Act and L’Oreal was guilty of reverse domain name hijacking. Plaintiff sought a declaratory judgment that NSI’s transfer of control of the domain name to the French court was “not permitted” and that his registration and use of the domain name was “not unlawful.” Both defendants moved to dismiss plaintiff’s complaint, and the district court granted the motions on the ground it lacked subject matter jurisdiction. In dismissing plaintiff’s claim against NSI, the court reasoned that NSI did not violate § 1114 because plaintiff never alleged that any underlying ACPA action existed when NSI transferred the domain name. The court dismissed plaintiff’s claim against L’Oreal, stating that there was no justiciable case or controversy and the court did not have jurisdiction because plaintiff failed to establish one element of § 1114(D)(2)(v). The court also refused to exercise its discretion to grant declaratory relief.
On appeal, the Fourth Circuit affirmed the dismissal of the claim against NSI but reversed and remanded the dismissal of the claim against L’Oreal. Although the Fourth Circuit affirmed the dismissal of the claim against NSI, it disagreed with the district court that subject matter jurisdiction did not exist. In particular, it noted that a complaint brought under the ACPA is also brought under the trademark laws, for which federal courts have subject matter jurisdiction. Instead of affirming the dismissal of the claim against NSI on jurisdictional grounds, the appeals court affirmed the lower court’s ruling because plaintiff failed to state a valid claim per NSI’s Rule 12(b)(6) motion. Specifically, because there was no pending ACPA claim against plaintiff at the time NSI transferred the domain name, there could be no allegation that NSI was not cooperating with a court in a domain name dispute, and there could be no exception to the limitation of liability provided in § 1114. The Fourth Circuit then reversed and remanded the dismissal of plaintiff’s claim against L’Oreal because: (1) the case was justiciable—a controversy still existed even though L’Oreal now owned the domain name, (2) the elements of § 1114(2)(D)(v) are not jurisdictional; jurisdiction is conferred through the Lanham Act and 28 U.S.C. § 1338, (3) plaintiff stated a valid claim against L’Oreal and adequately alleged the elements of § 1114(2)(D)(v), and (4) unlike 28 U.S.C. § 2201, the ACPA does not give district courts discretion regarding whether to grant declaratory relief.