Factual Background Edit
Plaintiff owned the mark FINANCIA and various “financia”-formative domain names. Shortly after defendant Parsons registered the domain name “efinancia.com” with defendant registrar Dotster, he offered the domain name for sale through an auction on defendant Afternic.com’s website. Plaintiff asserted various trademark claims against all defendants.
Trial Court Proceedings Edit
Dotster and Afternic.com moved to dismiss for failure to state a claim, asserting that their respective registration and auction activities did not constitute “use” of a registered mark under the Lanham Act or ACPA. The court agreed, relying on the Ninth Circuit’s decision in Lockheed Martin v. Network Solutions that the mere registration of a domain name did not constitute use of the name under the trademark laws and extending the logic of that decision to Afternic.com’s auction site.
Appellate Court Proceedings Edit
On May 21, 2002, the Sixth Circuit affirmed the lower court’s dismissal of plaintiff’s claims of trademark infringement, dilution, cybersquatting, and unfair competition for the reasons stated by the district court. The appeals court noted that plaintiff’s dilution claim against Afternic “present[ed] a closer question.” The court recognized the possibility that Afternic might be able to profit in situations where a domain name would have greater value if it also resembled an established trademark, but plaintiff’s Complaint did not allege any facts to support that theory, including any allegations that Afternic’s profits varied according to the ultimate selling price of the domain names.
Moreover, it is possible for Afternic’s customers to “buy and sell domain names that contain registered trademarks without engaging in the commercial use of those marks” by using the domain name for its non-trademark value. Accordingly, “simply posting a domain name on an Internet auction site . . . is insufficient to establish the commercial use of a trademark.”
- This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the Creative Commons Attribution-Share Alike License 3.0 (Unported) (CC-BY-SA).