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Bear Stearns v. Lavalle

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Citation Edit

Bear Stearns Cos. v. Lavalle, 2002 U.S. Dist. LEXIS 23117 (N.D. Tex. Dec. 3, 2002).

Factual Background Edit

Plaintiffs operated an investment company and a mortgage company under the trademarks BEAR STEARNS and EMC, respectively. Defendant established websites at various domain names containing the plaintiffs' marks at which it criticized plaintiffs. In an earlier decision, the court preliminarily enjoined defendant from using certain specific domain names and "any domain name that incorporates plaintiffs' names or marks, and any domain name that is confusingly similar to plaintiffs' names or marks."

But the injunction specifically did not prohibit defendant "from registering, trafficking in, or using a domain name, e-mail address, or other form of communication that incorporates plaintiffs' names or marks but that is unmistakably critical of plaintiffs and thus does not present a likelihood of confusion." Even though users reaching defendant's websites would easily recognize they were not at plantiffs' sites, the use of plaintiffs' marks would nonetheless cause initial-interest confusion.

After the pro se defendant failed to comply with many discovery orders and sanctions and failed to appear at several hearings, the court entered default judgment against defendant.

Trial Court Proceedings Edit

In this decision, defendant requested clarification about the name "emcmortgagecomplaints.com," which was included in the earlier injunction, as well as the following domain names at which he established new criticism sites: "EMCMortgageComplaints.com," "EMCMortgageFrauds.com," "EMCMortgageScams.com," "EMCMortgageCriminals.com," "BearStearnsFrauds.com," "BearStearnsComplaints.com," "BearStearnsCriminals.com," and "BearStearnsShareholders.com."

The court reiterated that defendant could use domain names containing plaintiffs' marks with "words or descriptions that are unmistakably critical [of plaintiffs]." The court held that the following three domains did not meet this test: "EMCMortgageComplaints.com," "BearStearnsComplaints.com," and "BearStearnsShareholders.com." The court stated that "[t]he use of a company's trademark with words such as 'complaints,' 'shareholders,' or other words that are not unmistakably critical cannot be said to lessen the initial-interest confusion against which the law protects." This was especially true because a corporation could establish a website for its shareholders or a website to receive complaints. The remaining names, however, satisfied the "unmistakably critical" test.

Turning to the issue of the "EMCForeclosure@aol.com" e-mail address, the court had previously held that ACPA pertained only to domain names and not to e-mail addresses. In this decision, the court also considered plaintiff's new motion for preliminary injunction against the e-mail address, this one based on a claim of infringement. Finding EMC a strong and fanciful mark, the court concluded that defendant's use of EMC with a term similar to the "mortgage" portion of plaintiffs' mark (i.e., "foreclosure"), was likely to cause confusion. The court thus preliminary enjoined defendant from using the "emcforeclosure@aol.com" email address and any email address incorporating the EMC mark.

However, the court specifically noted that the injunction did not enjoin defendant "from using plantiffs' marks in a way that makes it unmistakable that [defendant] is not the owner of the mark s or from using their marks in an e-mail address that is unmistakably critical of one or both plaintiffs."

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