ACPA Protections Expand With New Court Ruling

On December 16^th, an opinion from the Eleventh Circuit Court of Appeals boosted the number of appellate courts agreeing to an interpretation of a rule related to trademarks and domain names. The court held that re-registering a domain name, not just its initial registration, can constitute a violation of the ACPA.

The ACPA

The Anticybersquatting Consumer Protection Act (ACPA) is part of the federal trademark act. One of the ACPA’s most widely used and powerful tools is its imposition of civil liability on someone who registers and/or uses a domain name that is confusingly similar to someone else’s trademark with the intent to profit from the use. See 15 U.S.C. § 1125(d).

The Facts of Jysk v Dutta-Roy

Jysk Bed’N Linen is a furniture retailer that operates in several states in the eastern and southern US. It has used the tradename By Design since the early nineties. In 1999 Jysk contracted Monosu Dutta-Roy to create the company’s online retail presence at bydesignfurniture.com, and asked that the domain name be registered under Jysk’s ownership. Instead, Dutta-Roy registered the domain under his own name, without Jysk’s knowledge.

Eventually, the relationship between Jysk and Dutta-Roy ended. When the bydesignfurniture.com registration expired in April of 2012, Jysk was surprised to find that it did not own the domain name. At that time, Jysk asked Dutta-Roy to reregister the domain and transfer ownership of the name to Jysk. Dutta-Roy reregistered the name, as well as four other almost identical domain names, but instead of transferring ownership, he demanded that Jysk pay for over four thousand hours of work Dutta-Roy claimed he was owed. Once payment was made, he said, he would transfer the names. Jysk refused, and filed a complaint under the ACPA instead.

After filing its complaint, Jysk asked for an injunction that would prevent Dutta-Roy from altering or transferring the original bydesignfurniture.com domain name, which was granted. Then, and after initial discovery in the case was completed, Jysk moved for partial summary judgment to, in effect, regain possession of both the original name and the four new, similar names. This motion was basically an expansion of its original injunction. The summary judgment was granted, and Dutta-Roy was forced to transfer all five of the domain names to Jysk.

The December 16^th Appellate Court Opinion

The opinion published on the December 16, 2015 concerned Dutta-Roy’s appeal of that grant of summary judgement. The appellate court had to decide if the lower court “abused its discretion” in granting the injunction. To receive a preliminary injunction, the party asking for it must show that it is likely to win the lawsuit at the end of the day, and that the damage it would suffer without the injunction, while waiting for the lawsuit to resolve, would be greater than any damage suffered by either the non-moving party or the public.

The big issue in this case was whether or not Jysk would win its claim, because according to Dutta-Roy, re-registrations of domain names do not fall under the ACPA. The court here disagreed.

While the Third Circuit held that reregistrations can fall under the Act, the Ninth Circuit disagreed. The court hearing Jysk v. Dutta-Roy, the Eleventh Circuit, noted the discrepancy and explicitly sided with the Third Circuit for two reasons.

• First, the court thought the statute was unambiguous. The Act does not define “register” and it refers simply to “registrations,” which of course includes reregistrations.

• Second, the court looked to the purpose of the Act, which is to prevent cybersquatting. The court realized that denying a claim pursuant to a reregistration would allow a whole swath of cybersquatting (like the type at issue in this case) to go on without any consequences. The court found it hard to believe Congress intended to leave such a gaping loophole in its anti-cybersquatting legislation.

The court concluded its opinion by deciding that Jysk would most likely win its lawsuit due to the excessive bad faith displayed by Dutta-Roy, and that Jysk could suffer heavy damage if the domain names were left in Dutta-Roy’s hands.

Conclusion

While this decision did not create a new rule entirely, it does tilt the balance towards allowing claims based on reregistrations under the ACPA. The ACPA itself is very complicated, and circuit splits and other common law rulings making litigating in this space particularly challenging. If you need assistance or legal advice concerning cybersquatting, trademarks, or the ACPA, please give our expert Internet Attorneys a call at 855-473-8474.