Reverse Domain Name Hijacking In UDRP Proceeding Leads To Award Of Attorney Fees In District Court

The Southern District of Florida recently awarded attorney fees in a reverse domain name hijacking case.

Defendant PeopleNetwork ApS initially opposed Plaintiffs’ trademark registrations for various BEAUTIFUL PEOPLE marks, but faced with lengthy and costly discovery, chose not to pursue its oppositions.  Plaintiffs subsequently filed a UDRP complaint seeking transfer of several “Beautiful People”-formative domain names owned by PeopleNetwork.  The three-person UDRP panel found that PeopleNetwork’s domain registrations predated Plaintiffs’ trademark registrations by several years, and that Plaintiffs had therefore engaged in “reverse domain name hijacking.”  Despite this, Plaintiffs filed suit in district court, alleging trademark infringement and unfair competition.  The Court dismissed Plaintiffs’ case, and the Defendants moved for attorney fees, asserting the case was “exceptional” under 15 U.S.C. § 1117(a).

The Eleventh Circuit defines an “exceptional case” under the Lanham Act as “one that can be characterized as malicious, fraudulent, deliberate, and willful, or one in which evidence of fraud or bad faith exists.”  The Supreme Court’s Octane Fitness decision, however, interpreting the same language in the Patent Act, adopted a less stringent standard, namely, “one that stands out from others with respect to the substantive strength of a party’s litigating position . . . or the unreasonable manner in which the case was litigated.”  Though several circuits have held the Octane Fitness standard applies to Lanham Act cases, the Eleventh Circuit has not yet addressed the issue. 

While finding that Octane Fitness applied, the Court concluded that this case would qualify for an award of attorney fees under either standard.  The Court pointed particularly to the fact that the UDRP panel found Plaintiffs guilty of reverse domain name hijacking and that even Plaintiffs’ Second Amended Complaint contained allegations that established Defendant’s website predated Plaintiffs’ marks by several years.  Moreover, in their response to the motion for fees, Plaintiffs essentially admitted that they had no viable claims, arguing:  “Defendants could have prevented this lawsuit by settling this matter out of court via licensing but Defendants refused to do so.”  The Court also rejected Plaintiffs argument that because Defendants had already paid their attorney fees, the motion should be denied.  According to the court, whether the Defendants paid their bills was irrelevant.

The case is Domond v. PeopleNetwork ApS, Case No. 1:16-cv-24026 (S.D. Fla. Nov. 14, 2017).