Factual Background Edit
Defendant owns and operates the famed Casino de Monte Carlo in Monaco. Plaintiffs registered and used 53 domain names containing derivatives of "Casino de Monte Carlo" for online gambling services. Plaintiffs also used graphics and statements on its websites suggesting some affiliation with defendant's casino. For example, the websites contained pictures of an interior décor very similar to that of defendant's casino. And several sites made available downloadable software featuring pictures of the exterior of defendant's casino. A UDRP panel ordered plaintiffs to transfer the domain names to defendant after finding that plaintiffs name registered and used them in bad faith.
Trial Court Proceedings Edit
To stay the UDRP decision, plaintiffs filed this declaratory action for noninfringement. Defendant counterclaimed for trademark infringement, dilution, unfair competition, and cybersquatting under the ACPA. Both parties moved for summary judgment.
For 43 of the names, the court granted defendant's motion for summary judgment on its claim for infringement of an unregistered trademark under Section 43(a). Although "Casino de Monte Carlo" was geographically descriptive, plaintiffs' intentional and direct copying of that mark gave rise to a rebuttable presumption that defendant's mark had acquired secondary meaning. And plaintiff failed to rebut that presumption, especially where defendant had spent millions of dollars in the United States to promote its casino and a substantial number of its customers were from the United States.
Plaintiffs' intentional copying of the "Casino de Monte Carlo" mark also created a rebuttable presumption of likelihood of confusion, which plaintiffs failed to overcome. Regardless of the burden shift, the court held that a finding of likely confusion was proper because (1) the "Casino De Monte Carlo" mark was strong and distinctive, (2) plaintiffs used either the identical mark or derivatives of the mark in 43 of its domain names, (3) both parties offered gambling services, and (4) plaintiffs used defendant's mark to enhance the marketability of their services by creating a false association with defendant's casino.
The court denied summary judgment on defendant's counterclaim for dilution, however, because defendant was unable to show actual economic harm, which is required by the Fourth Circuit to establish dilution. The court did grant summary judgment on defendant's ACPA counterclaim, concluding that plaintiffs registered and used the 43 domain names in bad faith. Regarding relief, the court declined to award defendant attorney's fees. Although plaintiffs acted in bad faith in registering and using the domain names, their actions were neither malicious nor fraudulent. But the court did award statutory damages under the ACPA. It awarded $5,000 each for the domain names "casinomontecarlo.com" and "montecarlocasinos.com," the two sites that provided "Casino Monte Carlo" downloadable software, and $1,000 each for the remaining 41 infringing domain names, for a total of $51,000.
The court also enjoined plaintiffs "from registering and using domain names containing the trademark 'Casino de Monte Carlo' or its foreign equivalents and from using the mark on the Internet." Finally, the court granted summary judgment in favor of plaintiffs for the ten domain names that did not incorporate defendant's "Casino de Monte Carlo" mark or a variation thereof. These ten names either contained the term "Monte Carlo" but without the word "casino" (e.g., "montecarlogambling.net"), or contained the name "Monaco" but without "Monte Carlo" (e.g., "monacocasinos.com").
Appellate Court Proceedings Edit
On appeal, the Fourth Circuit in a 2-1 decision affirmed the district court's decision holding that plaintiff infringed defendant's trademark and violated the ACPA. Regarding infringement, the appeals court rejected plaintiff's arguments that defendant did not use its mark "in commerce" and that plaintiff's mark was not distinctive.
Specifically, the Fourth Circuit noted that "commerce" under the Lanham Act comprises all commerce that Congress lawfully may regulate under the Commerce Clause of the Constitution, including foreign trade. Here, defendant's advertising of its gambling services in the United States, coupled with the purchase of gambling services by United States citizens at defendant's casino in Monaco, constituted use in commerce.
Regarding the distinctiveness of the mark, the appeals court affirmed the district court's determination that the mark "Casino de Monte Carlo" possessed secondary meaning. It also affirmed the district court's finding of infringement based on plaintiff's use of defendant's mark in its domain names, plaintiff's use of pictures of defendant's casino, and plaintiff's misleading websites.
Finally, the appeals court affirmed the lower court's decision requiring plaintiff to transfer 43 domain names to defendant, finding that the transfer of domain names was an appropriate remedy under the ACPA.
- 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).