Internet Trademark Case Summaries
Domain Name Clearing Co., v. F.C.F. Inc.
16 Fed. Appx. 108 (4th Cir. 2001)(unreported opinion)
Plaintiff registered the domain name “clarins.com” in 1997. Defendant held the license for the CLARINS trademark for cosmetics. Defendant requested plaintiff to transfer the domain name to it. After receiving no response, defendant offered plaintiff $1,500 for the name. In 1998, plaintiff filed a declaratory-judgment action seeking a declaration of noninfringement of defendant’s trademark rights, which was eventually dismissed on jurisdictional grounds. Shortly thereafter, plaintiff offered to sell “clarins.com” to defendant for an amount “it would cost to run a full-page advertisement in one of the high fashion magazines,” an estimated amount of $60,000. Defendant subsequently filed a UDRP complaint, the panel ruling in defendant’s favor and ordering transfer of the domain name to defendant. Plaintiff filed suit in a Virginia state court challenging the UDRP decision, and the case was later removed to federal court. The district court granted summary judgment in defendant’s favor that plaintiff’s registration of “clarins.com” violated the ACPA. On appeal, the Fourth Circuit affirmed, noting that the record was replete with evidence that plaintiff had a bad-faith intent to profit from defendant’s trademark. First, plaintiff did not hold any trademark rights in the CLARINS mark and was not known as CLARINS. Second, plaintiff had never developed a website at “clarins.com” and there was no evidence it planned to do so. Third, plaintiff offered to sell the domain name to defendant for a substantial sum. Finally, plaintiff registered more than 70 domain names and its primary business purpose was registering domain names. Even though many of plaintiff’s domain names did not infringe others’ trademarks (e.g., “belgianchoclate.com,” “britishmuseum.com”), they nonetheless demonstrated an intent to register domain names, but not to use them. The court found this to be a “key factor” in finding bad faith. Plaintiff attempted to take refuge under ACPA’s safe-harbor provision, arguing that it believed its actions were lawful because it registered the names before passage of the ACPA and it did not know that CLARINS was a registered trademark. But the court noted that after becoming aware of the trademark in 1997, plaintiff still renewed the “clarins.com” registration. Moreover, plaintiff did not offer any evidence on why it selected the domain name or any planned business purposes for the name. Finally, the appeals court held that the “clarins.com” domain name was identical to plaintiff’s mark and that the mark CLARINS was both distinctive and famous.