Ford Motor Co. v. Catalanotte, Civ. A. No. 2:00cv75260 (E.D. Mich. Jan. 14, 2002), aff'd, 2003 U.S. App. LEXIS 17960 (6th Cir. Aug. 28, 2003).
Factual Background Edit
Plaintiff, the well-known automobile manufacturer, distributed an employee newspaper titled "Ford World." Defendant, a long-time employee of plaintiff, registered the domain name "fordworld.com" in 1997 before enactment of the ACPA. Although defendant never operated a website at "fordworld.com," he sent an e-mail to two of plaintiff's officers in October 2000 offering to sell the domain name to plaintiff and indicating that he had already received offers to purchase it. Approximately one month after receiving defendant's e-mail, plaintiff sued defendant for cybersquatting.
Trial Court Proceedings Edit
After a bench trial, the district court ruled in favor of plaintiff. The court initially found that the domain name "fordworld.com" was confusingly similar to both plaintiff's unregistered and distinctive mark FORD WORLD and to plaintiff's registered mark FORD. Defendant acted with a bad-faith intent to profit as shown by his offer to sell the "fordworld.com" domain name to plaintiff and his registration and sale of two other domain names containing other parties' trademarks ("aande.com" and "mrspauls.com").
Defendant's actions did not constitute fair use or protected speech because his offer to sell the name was not party of any communicative message he intended to express. The court held that defendant both "used" and "trafficked in" the domain name "fordworld.com" by offering to sell it to plaintiff. The court rejected defendant's laches, acquiescence, and estoppel defenses because they were unsupported by the evidence.
Finally, the court noted that although this was a clear violation of the ACPA and defendant had registered and sold other domain names that included other parties' marks in the past, this case did not "rise to the level of exceptional egregiousness so as to distinguish them from the 'unexceptional' case of cybersquatting." Accordingly, the court awarded only $5,000 in statutory damages and did not award attorney's fees. The court also held that plaintiff was entitled to unspecified "injunctive relief."
Appellate Court Proceedings Edit
On appeal, the Sixth Circuit affirmed the lower court's decision. The appeals court rejected defendant's argument that he should not have to pay statutory damages because he registered the domain name before to the enactment of the ACPA on November 29, 1999. It held that, regardless of when the domain name was registered, liability can also be based on "use" or "trafficking" that occurred after the enactment of the ACPA.
The Sixth Circuit also rejected defendant's argument that he did not traffic in the domain name because he intended to give it to plaintiff as a gift, because the district court's finding that he intended to sell the domain name to plaintiff was not clearly erroneous. Moreover, the Sixth Circuit held that a transaction such as a sale or purchase was not required to "traffic in" a domain name and that registering a famous trademark as a domain name and offering to sell the name to the trademark owner constitutes trafficking for purposes of ACPA.
Because the district court based its award of statutory damages solely on defendant's offer to sell the domain name to plaintiff, the appeals court declined to address the question of whether defendant's offer to sell the domain name also constituted "use" of the name for purposes of ACPA.
Finally, the Sixth Circuit rejected defendant's argument that the statute of limitations barred plaintiff's ACPA claim because plaintiff filed suit more than three years after defendant initially registered the domain name. Because the Lanham Act does not contain a statute of limitations, the court stated that defendant's argument was properly categorized as a laches defense. Defendant failed to establish laches, however, because plaintiff did not learn of defendant's registration of the domain name until a month before filing suit. Plaintiff thus acted diligently in asserting its rights such that defendant could not show that was prejudiced by the timing of plaintiff's suit.
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