Barcelona.com, Inc. v. Excelentisimo Ayuntamiento De Barcelona, 189 F.Supp.2d 367 (E.D. Va. 2002) (full-text), rev'd, 330 F.3d 617 (4th Cir. 2003) (full-text); Civ. Action 00-1412-A (E.D. Va. July 16, 2003) (motion to transfer domain name).
Factual Background Edit
Joan Nogueras Cobo originally registered the "barcelona.com" domain name in the name of his wife, Concepcio Riera Llena, in early 1996. Nogueras launched a "barcelona.com" website in early 1997 that featured information about the city of Barcelona, Spain. He offered defendant a chance to negotiate for the domain name in early 1999 and incorporated plaintiff Barcelona.com, Inc. as a Delaware corporation in October 1999.
In early 2000, he met twice with defendant and presented a business plan "contain[ing] glaringly inflated figures and overstat[ing] the overall worth of the domain name and the corporation." Defendant later demanded transfer of the name, but Riera transferred the name to plaintiff corporation and changed the contact information for the domain name from a Spanish address to a New York address with no office or phone number. Plaintiff corporation had no employees, and Nogueras and Riera were the only shareholders of Barcelona.com, Inc.
Defendant successfully brought a UDRP action against plaintiff. To stay the transfer of the "barcelona.com" domain name to defendant, plaintiff brought this declaratory judgment action, and defendant counterclaimed for cybersquatting under the ACPA.
Trial Court Proceedings Edit
The court denied plaintiff's request for a declaratory judgment, ruling that its registration and use of the domain name "Barcelona.com" was not lawful. As a preliminary matter, the court concluded that the UDRP panel decision should be given no weight so that a federal court must review the issue de novo. Turning to the merits, the court found that neither party had valid trademark rights in BARCELONA under U.S. law. Nor did defendant own any Spanish trademark registrations for BARCELONA by itself. It did own, however, a number of Spanish registrations for trademarks where the word BARCELONA dominated the mark, which under Spanish law entitles it to protection of the BARCELONA mark. Moreover, under Spanish law, the names of communities, municipalities, and provinces cannot be registered as trademarks without authorization of the municipal authorities.
The court thus held that defendant owned "a legally valid Spanish trademark for the dominant word 'Barcelona.'" In finding plaintiff's registration of barcelona.com unlawful, the court noted the confusing similarity between the "barcelona.com" domain name and defendant's marks due to their similarity in appearance, the reasonable expectation of Internet users that the services and information provided by plaintiff's website were offered by defendant, and that both parties provided tourist information and tourism-related services connected with the city of Barcelona.
The court agreed with the UDRP panel's determination that plaintiff took advantage of the confusion of Internet users who would normally expect to reach some officially-sponsored website when using the "barcelona.com" name. Furthermore, the circumstances surrounding the incorporation of "barcelona.com, Inc., and Nogueras's attempted sale of the name satisfied the bad-faith intent to profit requirement.
The court next examined defendant's ACPA counterclaim and held that plaintiff's use and registration of "barcelona.com" violated the ACPA. According to the court, defendant's lawful Spanish marks satisfied the ACPA, the court noting that the ACPA makes no distinction between United States or foreign marks and the worldwide effects from use of a domain name. Plaintiff's bad-faith intent to profit from the mark BARCELONA was established by plaintiff's registration of multiple other infringing domain names, its attempted sale of the domain name to defendant, its excessive valuation of the domain name, its lack of intellectual property rights in the name "Barcelona," and its failure to provide more than minimal services at the website, all through third-party vendors.
Appellate Court Proceedings Edit
On June 2, 2003, the Fourth Circuit reversed the lower court's decision denying plaintiff relief and vacated and remanded the court's order requiring plaintiff to transfer the "barecelona.com" domain name to defendant.
The appeals court first reviewed its basis for jurisdiction and the role of the UDRP decision in light of defendant's argument that "failure to consider the basis for the [ WIPO ] decision would remove the basis for [this court's] jurisdiction." Specifically, defendant argued that the court's jurisdiction to hear a claim under Section 1114(2)(D)(v) of the ACPA "rests on a recognition of the WIPO proceeding and the law that the WIPO panelist applied," which in this case was Spanish law.
Regarding the UDRP, the court noted that (a) the UDRP is designed to provide a quick resolution to domain name disputes as a result of its streamlined nature, (b) UDRP Panels decide cases under procedural rules set by ICANN and under "any rules and principles of law that [the panel] deems applicable," (c) the UDRP specifically anticipates judicial intervention before, during, and after UDRP proceedings, which court proceedings will be decided "under various nations' laws applicable to the parties," and (d) UDRP decisions are not given any deference under the ACPA.
In addition, the UDRP is relevant to actions brought under the ACPA only in providing limited liability for domain name registrars that register, transfer, or cancel domain names under policies like the UDRP and in allowing registrants whose domain name has been suspended, disabled, or transferred under policies like the UDRP to bring a civil action to establish that its registration or use of a domain name "is not unlawful under the Lanham Act."
Accordingly, the court held that it has jurisdiction over this dispute because 28 U.S.C. §§1331 and 1338 confer jurisdiction on federal courts to hear trademark matters, and a claim brought under the ACPA, which amended the Lanham Act, is one such trademark matter. The appeals court also concluded that it would give the UDRP decision "no deference in deciding this action under §1114(2)(D)(v)."
The court next addressed the merits of plaintiff's claim, i.e., whether plaintiff's registration or use of "barcelona.com" was unlawful under the Lanham Act. The court ruled that the lower court erred by applying Spanish law instead of United States law in deciding the case because the ACPA "explicitly requires application of the Lanham Act, not foreign law, to resolve an action brought under . . . §1114(2)(D)(v)." The court noted that application of federal law is consistent with the doctrine of territoriality, which provides that a trademark exists only under the laws of each sovereign nation. United States courts thus should not "entertain actions seeking to enforce trademark rights that exist only under foreign law."
In applying United States law, the Fourth Circuit held that defendant did not have a valid trademark in the term BARCELONA because it is geographically descriptive and there was no evidence of secondary meaning in the record, i.e., "there was no evidence that the public — in the United States or elsewhere — associates 'Barcelona' with anything other than the City itself." The Fourth Circuit thus concluded that plaintiff was entitled to relief under §1114(2)(D)(v) regarding the domain name "barcelona.com" and reversed the district court's decision against plaintiff.
Finally, the Fourth Circuit vacated the lower court's holding that plaintiff's use and registration of "barcelona.com" violated the ACPA because defendant never filed an ACPA counterclaim with the district court.
Subsequent Trial Court Proceedings Edit
On July 16, 2003, the district court entered judgment in favor of plaintiff. The court rejected defendant's argument that plaintiff acted with unclean hands by transferring the domain name to a United States company to avoid application of Spanish trademark law. The court held that plaintiff's registration and use of the domain name "barcelona.com" did not violate the Lanham Act or ACPA, and that the UDRP decision was "null and void." It also ordered defendant to transfer the domain name to plaintiff "forthwith."
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