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Internet Trademark Case Summaries

Eagle Hospital Physicians, LLC v. SRG Consulting, Inc.

2007 WL 789006 (March 14, 2007)

Plaintiff provided medical services under the registered mark EAGLE HOSPITAL PHYSICIANS and the common law mark EH HOSPITALISTS.  Defendants contracted with plaintiff to generate leads.  Defendants registered the domain names “eaglehospitalphysicians.com,” and set up a website.  Following a dispute regarding the site’s content, plaintiff requested defendants to transfer the domain name to plaintiff.  Defendants refused and plaintiff then registered and set up a website at the domain name “ehphospitalists.com.” Defendants responded by registering the domain names “ehphospitalist.com,” “ehphospitalist.net,” and “ehphospitalist.info.”  In total, defendants registered about 150 domain names containing plaintiff’s marks.  Defendants offered to transfer the domain name to plaintiff in exchange for a salary and/or additional equity in the company.  Plaintiff sued for cybersquatting.  In an earlier decision, the court denied plaintiff’s motion for preliminary injunction because defendants had an implied license to use plaintiff’s marks up until termination of the parties’ agreement.  Moreover, defendants registered the names at the direction of and with knowledge of plaintiff and plaintiff failed to show how defendants profited from the names.

In this decision, plaintiff moved for summary judgment on its cybersquatting claim.  Plaintiff asserted that defendants had a bad-faith intent to profit from the registration of domain names containing plaintiff’s marks as seen in defendants’ offer to sell the domain names and in defendants’ continued use of the domain names to intercept privileged information from opposing counsel.  Plaintiff also contended that defendants filed a fraudulent affidavit with the PTO claiming to own the EAGLE marks.  Defendants argued that they did not have a bad-faith intent to profit because they did not intend to divert customers, did not establish a competing business, did not benefit from plaintiff’s business, and only registered the domain names at plaintiff’s direction.  Defendants further argued that they registered 150 domain names to take advantage of search engine mechanics to increase the prominence of plaintiff’s websites in searches of “hospitalist” and “hospitalists,” that plaintiff sought to avoid paying commissions, and that defendants only ever asked for compensation for the “cost of running and developing the web sites.”  Though neither party addressed the issue, the court raised the possibility that defendants could invoke ACPA’s safe-harbor provision and make a “colorable argument” that they believed their activities to be lawful because they did not believe their agreements were appropriately terminated.  In addressing the issue of bad faith under the ACPA, the court acknowledged that defendants’ actions did not fit the “paradigmatic harm” that the ACPA anticipated because defendants registered these domain names pursuant to an agreement with plaintiff.  The court acknowledged that while the underlying issue may have been contractual, defendants’ actions amounted to “holding the domain names hostage or as leverage” to obtain the compensation they thought they deserved and constituted an intent to “profit” for purposes of the ACPA.  Ultimately, however, the court denied plaintiff’s motion for summary judgment because plaintiff did not establish that defendants intended to “divert” customers from plaintiff’s website.