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Nike v. Circle Group Internet

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Citation Edit

Nike, Inc. v. Circle Group Internet, Inc., 318 F.Supp.2d 688 (N.D. Ill. 2004) (full-text).

Factual Background Edit

Nike has used the federally registered mark JUST DO IT to promote its footwear, apparel, and other products since 1988. During that time, Nike spent hundreds of millions advertising its JUST DO IT mark and sold tens of millions of dollars of apparel under the mark. Circle Group assists emerging companies trying to build their business infrastructure. In 1997, Circle Group registered the domain name "justdoit.net" and used it for employee email addresses. Between 1999 and 2002, Circle Group used the "justdoit.net" domain name to redirect users to its "circlegroupinternet.com" and "crgq.com" websites. Circle Group made no use of JUST DO IT on its websites and offered no products or services under the mark. Although Circle Group's CEO admitted that he probably knew of Nike's use of JUST DO IT before registering the domain name in 1997, he claimed to have chosen the "justdoit.net" domain because "it is a positive, catchy and motivational phrase that he has been using for over thirty years." He also claimed to have used the phrase in a book he authored in 1978. Circle Group submitted no evidence, however, to corroborate either claim.

Trial Court Proceedings Edit

Nike filed a UDRP complaint against Circle Group, but a split panel ruled against Nike due to a lack of bad faith on Circle Group's behalf. Nike then filed this lawsuit. Nike moved for summary judgment on its cybersquatting claim, and Circle Group sought summary judgment on Nike's dilution claim.

Regarding cybersquatting, the court granted summary judgment for Nike. Circle Group's registration and use of a domain name in which it had no intellectual property rights to redirect users to its commercial websites, all with knowledge of Nike's use of JUST DO IT, satisfied the required bad-faith intent to profit from Nike's mark. The split-panel UDRP decision in Circle Group's favor did not preclude a finding of bad faith because that decision was based on the panel's mistaken belief that Circle Group used "justdoit.net" as its main website. Finally, the absence of an offer by Circle Group to sell the domain name did not preclude a finding of bad faith since that is only one of many factors considered by the court in assessing bad faith.

Turning to dilution, the court denied Circle Group's motion for summary judgment because an issue of material fact existed on whether there was actual dilution as required by the U.S. Supreme Court in Moseley v. V Secret Catalogue, Inc.[1] The parties disputed the meaning of the Supreme Court's dicta in Moseley that "direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proved through circumstantial evidence — the obvious case is one where the junior and senior marks are identical."[2] Nike argued that identical marks by themselves constituted circumstantial evidence of actual dilution while Circle Group argued that identical marks simply gave Nike the ability to submit circumstantial evidence in an attempt to prove actual dilution.

But the court did not need to resolve these competing interpretations of Moseley. Circle Group's admission that the "justdoit.net" domain name had "become recognized as having some relation to [Circle Group] by its employees and customers" and Circle Group's CEO's admission that he believed that people would mentally associate the "justdoit.net" domain name with Nike, coupled with the identity of the marks, were sufficient to create an issue of material fact to preclude summary judgment.

References Edit

  1. 537 U.S. 418 (2003) (full-text).
  2. Id. at 432-33.

Source Edit

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