Friday, July 24, 2009

11th Cir.: No Bad Faith Intent to Profit in ACPA claim (and still no word as to whether the purchase of a Google AdWord is a "use in commerce")

Southern Grouts & Mortars sells swimming pool finishes under the trademark DIAMOND BRITE. It wants to use the domain name, but 3M Company (who competes with Southern Grout) owns the domain. You see, 3M had the mark DIAMOND BRITE registered in connection with "electronically controlled display panels and signs." 3M let those rights lapse, but kept the domain name. 3M has kept the website empty at and plans to keep it that way. What to do?

Southern sued 3M under the Anticybersquatting Consumer Protection Act (15 U.S.C. § 1125(d)), which provides a cause of action for a trademark owner against a person who "has a bad faith intent to profit from that mark" and who "registers, traffics in, or uses a domain name that" is identical or confusingly similar.

"Unique Circumstances" showing 'bad faith intent to profit?'

Southern first argued that 2 unique circumstances showed 3M's bad faith intent to profit: (1) 3M could use website traffic data for visits to the domain to determine competitive information; and (2) 3M kept the domain only to keep others from using it. The district court rejected the first reason because the expert's report was not reliable. As for the second reason, simply refusing to sell a domain did not show an "intent to profit." The Eleventh Circuit agreed.

ACPA Factors

The ACPA provides 9 factors that courts may consider in determining bad faith intent. See 15 U.S.C. § 1125(d)(1)(B)(i). They broke down as follows: 5 favored 3M, 2 favored Southern, and the other 2 were inapplicable. The court then noted that its "analysis of whether a defendant had the bad faith intent to profit necessary to a cybersquatting claim is not based on a score card of the statutory factors." The Eleventh Circuit agreed that Southern had failed to show a bad faith intent to profit, and affirmed the district court's entry of summary judgment in 3M's favor.

Unfair Competition Under the Lanham Act

Finally, Southern sought to impose liability against 3M for unfair competition. Problem is, there was no evidence that 3M had used the mark in commerce. Southern argued, in part, that 3M bought a Google Adword for "diamond brite," and that purchase was a use in commerce. The 11th Circuit noted that it has not yet been decided in this Circuit whether or not the purchase of a Google Adword is a use in commerce. And this case was not the case to change that, because Southern had not properly pleaded the allegation.


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