Website Designer Likely Violated Anticybersquatting Act

Jysk Bed’N Linen is a retailer selling home, office and patio furniture from its stores located in Georgia, New Jersey and North Carolina.  Since 1990, Jysk has operated under the By Design trade name and common law trademark.  Jysk contracted with Monosij Dutta-Roy and several others to create an online shopping website in 1999.  Dutta-Roy registered the domain name bydesignfurniture.com, listing himself as the domain name owner.  Dutta-Roy’s involvement with the bydesignfurniture.com website ended in 2003. 

When Dutta-Roy’s registration of bydesignfurniture.com expired on April 9, 2012, Jysk’s website went down.  Jysk then discovered that it did not own the registration and asked Dutta-Roy to re-register the website in Jysk’s name.  Dutta-Roy refused.  A few weeks later, Dutta-Roy re-registered bydesignfurniture.com (presumably bringing that website back up) and also registered the domain names bydesignfurniture.org, bydesignfurnitures.com, and bydesign-furnitures.com.  Dutta-Roy offered to transfer the domain names to Jysk in exchange for compensation for over 4,000 hours work under a non-existent agreement.  Jysk brought suit against Dutta-Roy for cybersquatting, among other claims.  The district court granted Jysk’s motion for a preliminary injunction and the Eleventh Circuit Court of Appeals affirmed.

Under the Anticybersquatting Consumer Protection Act (ACPA), anyone who has a bad faith intent to profit from another person’s mark and registers or uses a domain name that is confusingly similar to the other person’s mark is liable to the owner of the mark.  15 U.S.C. § 1125(d). 

The district court found that Dutta-Roy’s re-registration of bydesignfurniture.com and registration of bydesignfurniture.org, bydesignfurnitures.com were done in bad faith, violated Jysk’s rights under the ACPA and ordered Dutta-Roy to transfer the domain names to Jysk.

Preliminary Injunction

Jysk was entitled to a preliminary injunction if it showed:  (1) a substantial likelihood of success on the merits; (2) that irreparable injury will be suffered unless the injunction is issued; (3) the threatened injury to the moving party outweighs whatever damage the proposed injunction might cause the non-moving party; and (4) if issued, the injunction would not be adverse to the public interest.

(Opinion pdf page 8).

The Eleventh Circuit held that Dutta-Roy’s re-registration constituted a registration under the ACPA and that Jysk would likely succeed on the merits of its ACPA claim.  The Eleventh Circuit disagreed with Dutta-Roy’s argument that re-registrations are not “registrations” under the ACPA.  There is a circuit split on this issue, with the Third Circuit holding that re-registration is a registration under the ACPA and the Ninth Circuit holding that re-registration is not a registration under the ACPA.  This was a case of first impression in the Eleventh Circuit.  The Eleventh Circuit agreed with the Third Circuit that, since the ACPA does not distinguish between types of registrations, that re-registration is, by definition, a registration.

Domain names are unique.  It is therefore important that the trademark owner reserve the domain name closely associated with or identical to its trademark so that it may take advantage of its goodwill.

The ACPA was enacted to prevent cybersquatting. Cybersquatting is essentially extortion. Cybersquatting can take the form of registering numerous domain names containing trademarks or tradenames only to hold them ransom in exchange for money. Another form of cybersquatting occurs when the cybersquatter intends to profit by diverting customers from the website of the trademark owner to the defendant’s own website, where those consumers would purchase the defendant’s products or services instead of the trademark owner’s.  In a sense, the cybersquatter muddies the clear pool of the trademark owner’s goodwill and then profits off the resulting murkiness.

(Opinion pdf pages 10 – 11)

Registering, trafficking in and using a domain name are the three acts that trigger the ACPA.  The defendant violates the ACPA by performing any of these three acts in bad faith with reference to a domain name that is identical or confusingly similar to a distinctive mark.  The ACPA contains a list of nine factors that a court may consider in making a bad faith determination.

When Dutta-Roy re-registered bydesignfurniture.com under his own name rather than Jysk’s, he was expressing his intent or ability to infringe on Jysk’s trademark. He admitted that he never had used the domain names in the bona fide offering of any goods or services. His demand for money can be looked at in two ways, and they are two sides of the same coin. First, the amount of money demanded could show how much he believes the domain name smudges the goodwill of the trademark—that is, how much money Jysk would lose out on if Dutta-Roy were to use the domain names to misdirect Jysk’s customers. Second, the amount of money demanded could show how much value he believes Jysk puts on the domain names. In either case, bad-faith intent abounds.

As for the factors, we find one, three, six, and eight relevant. Dutta-Roy does not have any intellectual-property rights in the domain names, nor does he offer or has ever offered any goods or services in connection with the domain names. Dutta-Roy did offer to transfer or sell the domain name to the mark owner, Jysk, for financial gain without having used it in connection with the offering of any goods or services. Dutta-Roy did register multiple domain names that he knew are identical or confusingly similar to Jysk’s marks.

(Opinion pdf page 20 – 21).

The Eleventh Circuit ruled that Dutta-Roy did not qualify for the ACPA fair use safe harbor.  The Eleventh Circuit further ruled in Jysk’s favor on the other three preliminary injunction factors.

This case is Jysk Bed’N Linen v. Monosij Dutta-Roy, No. 13-15309, Eleventh Circuit Court of Appeals.

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