Plaintiff, a holding company that owns the trademark MARCH MADNESS as used by the National Collegiate Athletic Association (NCAA) and the Illinois High School Association (IHSA) sued defendants for trademark infringement and cybersquatting. In 1996, defendant Netfire, an ISP, acquired the domain name “marchmadness.com” on behalf of defendant Sports Marketing International (SMI) to develop a website in connection with the NCAA “March Madness” basketball tournament. Upon obtaining the domain name, SMI began developing the website for release before the 1996 NCAA basketball tournament. However, SMI received a cease-and-desist letter from the NCAA and postponed release of the website. IHSA sent a cease-and-desist letter to SMI later in 1996. In 1997, despite the NCAA's and IHSA’s objections, SMI released the “marchmadness.com” website devoted entirely to the NCAA basketball tournament, which was available until July 1999. In June 1999, NSI placed the domain name “marchmadness.com” on hold under its dispute policy. This suit was filed in early 2000. After a bench trial, the court found for plaintiff on both infringement and cybersquatting. Initially, the court found MARCH MADNESS to be a protectable trademark. It rejected defendants’ argument MARCH MADNESS was a generic term, instead finding it to be a descriptive mark that had acquired secondary meaning. The court also found a strong likelihood of confusion between MARCH MADNESS and the domain name “marchmadness.com.” In particular, the court noted that initial-interest confusion was likely because Internet users would likely type “marchmadness.com” when searching for the official NCAA Tournament website and could stay at defendants’ site even after realizing it was not the official site. Defendants’ use of the domain name was not fair use because defendant used the domain name for commercial purposes in its trademark sense to identify the NCAA Tournament. The court also found that defendants’ use of “marchmadness.com” violated the ACPA, finding that most of the bad-faith factors favored plaintiff. Regarding remedies, the court awarded plaintiff its costs, ordered defendants to cease “commercial use” of the term "March Madness" or any other confusingly similar term, and ordered transfer of the domain name to plaintiff. However, regarding infringement, the court did not award defendants’ profits because plaintiff failed to show any evidence of defendants’ sales from the “marchmadness.com” site. And plaintiff failed to show that it suffered any actual damages. Neither was plaintiff entitled to statutory damages under ACPA because defendants did not register, use, or traffic in the domain name after November 29, 1999. Finally, because the court held that the case was not “exceptional” due to uncertainty about plaintiff’s rights from a prior court decision and the lack of damage to plaintiff, it did not award plaintiff its attorney’s fees.
On appeal, the Fifth Circuit affirmed the district court’s decision in all respects. The appeals court found no clear error with the lower court’s findings that MARCH MADNESS was a descriptive mark that had acquired secondary meaning and that defendant’s use of “marchmadness.com” created a likelihood of confusion with the MARCH MADNESS mark. The appeals court also agreed that defendants acted with a bad-faith intent to profit from plaintiff’s mark, thus subjecting them to liability under ACPA. It pointed out that defendant Jones was an “experienced cybersquatter,” having registered other trademark-related domain names including “stairmaster.com,” “gucci.com,” and “windows98.com.” In fact, prior to registering “marchmadness.com,” he registered “march-madness.com” because “marchmadness.com” was unavailable then. Jones later contacted the original owner of the “marchmadness.com” domain, purporting to be a representative of the NCAA, and convinced that individual to transfer the name to Jones. The Fifth Circuit also affirmed that plaintiff was not entitled to any statutory damages under ACPA or actual damages, profits, or attorney’s fees under the Lanham Act for the reasons articulated by the lower court.