April 2010 Issue

Civil Cases

Volvo Trademark Holding AB v. volvospares.com,
2010 WL 1404175 (E.D. Va. Apr. 1, 2010)

ABSTRACT
After Volvo lost a UDRP case it brought against the domain name volvospares.com used for a website selling new and used parts in direct competition with Volvo, it filed this in rem action.  The district court granted Volvo’s motion for summary judgment on its cybersquatting claim.  Although the UDRP panel found that the registrant did not register volvospares.com with a bad-faith intent to profit from the VOLVO mark, the district court disagreed and found that the registrant’s use of the famous and distinctive VOLVO mark in the domain name constituted cybersquatting and ordered transfer of the domain name to Volvo.

CASE SUMMARY

FACTS
Volvo Trademark Holding AB and its related companies (collectively “Volvo”) and their network of authorized dealers have sold VOLVO automobiles, parts, replacement parts, and services under the federally registered VOLVO mark since 1956.  Ken White registered the domain name volvospares.com in 1997 and used the associated website to sell new and used parts for VOLVO automobiles in competition with authorized VOLVO dealers and service centers.  After Volvo objected to White’s use of the domain name, White posted a disclaimer on the volvospares.com website stating, “DISCLAIMER: Volvospares.com has no affiliation with Volvo Group and makes no claim to or implication of being associated in any official business capacity in conjunction with or for such companies.”  White also altered the registrant name for volvospares.com from “Cyberzone Ltd.” with a United Kingdom address to “VolvoSpares” with a Spain address.

After White failed to respond to Volvo’s demand letters, Volvo filed a UDRP complaint against volvospares.com.  Although the UDRP panel held that the volvospares.com domain name was confusingly similar to Volvo’s VOLVO mark, it held that Volvo failed to establish that White used the domain name in bad faith based on an absence of evidence that White “misrepresented his business to customers or to the public at large.” 

Volvo then filed this in rem action against the volvospares.com domain name (i.e., not against White personally) for cybersquatting, trademark infringement, and dilution.  Volvo sent the complaint to White via first-class mail and email, and published notice of the action pursuant to the court’s order permitting service by publication.  Volvo then filed a motion for summary judgment.  White neither filed an answer to the complaint nor formally responded to Volvo’s motion for summary judgment.  However, White submitted two documents to the court almost two months after the answer deadline.

ANALYSIS
The district court granted Volvo’s motion for summary judgment.  As an initial matter, the court found that it had in rem jurisdiction over the volvospares.com domain name because the registrant was located outside of the United States and the domain name registry, VeriSign, was located in the district.  The court then found that there was no genuine issue of material fact regarding the elements of Volvo’s ACPA claim: (1) White had a bad-faith intent to profit from his use of the VOLVO mark, and (2) the volvospares.com domain name was confusingly similar to or dilutive of Volvo’s famous VOLVO mark.

The court initially found that White had a bad-faith intent to profit from his use of the VOLVO mark in the volvospares.com domain name.  Specifically, the court found that White intended to divert sales from authorized Volvo dealers, and that he should have known that his use of the mark was infringing based on the fame and distinctiveness of the registered VOLVO mark.  It then found that the VOLVO mark was distinctive and famous, and that volvospares.com was confusingly similar to the VOLVO mark because “VOLVO” was the dominant part of the domain name.  Further, the court found that the disclaimer on the volvospares.com website did not negate this confusion. 

Finally, the court considered White’s two informal and untimely submissions addressing the merits of Volvo’s claims, but they were not sufficient to create a genuine issue of material fact to defeat summary judgment.  White asked the court in his first submission to consider the UDRP decision as evidence, but the court held that the decision did not preclude Volvo from seeking relief in the district court, citing its earlier decision in Eurotech, Inc. v. Cosmos European Travels AG, 213 F. Supp. 2d 612 (E.D. Va. 2002), in which it held that UDRP decisions are “neither admissible, nor entitled to any deference, with respect to the merits issues” of the lawsuit.  In his other submission, White argued that his registration of volvospares.com predated Volvo’s registration of domain names pairing its VOLVO mark with generic terms (e.g., volvoparts.com and volvoaccessories.com).  The court held, however, that the relevant inquiry was whether the volvospares.com domain infringed Volvo’s rights in the VOLVO mark, which predated White’s registration of volvospares.com by more than forty years.  Accordingly, the fact that White registered volvospares.com before Volvo registered similarly formulated “volvo[generic term].com” domain names did not negate his infringing activity.  The district court thus ordered the transfer of volvospares.com to Volvo.

CONCLUSION
This decision is relevant because it addresses the right of a reseller of parts for a branded product to register and use domain names consisting of the brand name plus a generic term for the goods at issue.  Although there have been numerous UDRP decisions involving resellers, this decision is one of only a few reseller decisions decided by federal courts.  In addition, the district court’s finding that a disclaimer did not negate confusion between the famous VOLVO mark and the volvospares.com domain name neutralized one of the common defenses asserted by cybersquatters.  Finally, the court reaffirmed the fact that UDRP decisions have no binding effect and are entitled to no deference in civil litigation.