Cycle Hutt, Inc. v. KTM Sportsmotorcycle USA, Inc., 2003 U.S. Dist. LEXIS 23454 (D.N.D. Dec. 19, 2003).
Factual Background Edit
Plaintiff, a motorcycle dealer, and defendant, a motorcycle distributor and owner of the KTM trademark, entered into a dealer agreement. Defendant terminated the agreement, and plaintiff brought this suit for breach of contract. Defendant then sued plaintiff in Ohio for cybersquatting and trademark infringement based on plaintiff's use of the KTM trademark in various domain names. The Ohio case was transferred to North Dakota where the two cases were consolidated.
Trial Court Proceedings Edit
Defendant successfully moved for default after plaintiff failed to answer the complaint. However, the court granted plaintiff's motion to set aside the default, noting that plaintiff raised a number of meritorious defenses relating to defendant's cybersquatting claim. Specifically, plaintiff argued that it did not have a bad-faith intent to profit from the KTM mark, that it acted in good faith to promote defendant's goods, and that the disclaimer on its website eliminated any consumer confusion. Defendant's argument that plaintiff's use of the KTM mark in the domain name "creates confusion in the marketplace as a matter of law" was supported only by decisions that were not binding on the court. Moreover, the court found that setting aside the default would not prejudice defendant.
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