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Northern Light Technology v. Northern Lights Club

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Citation Edit

Northern Light Technology, Inc. v. Northern Lights Club, 97 F.Supp.2d 96 (D. Mass. 2000) (full-text), aff’d, 236 F.3d 57, 57 U.S.P.Q.2d (BNA) 1277 (1st Cir. 2001) (full-text), cert. denied, 533 U.S. 911 (2001).

Factual Background Edit

Plaintiff registered its “northernlight.com” domain name in September 1996 and began operating its NORTHERN LIGHT search engine at that domain name in August 1997. Defendant was a one-person unincorporated association owned by Jeff Burgar, the contact person for several thousand domain names. Burgar was associated with many vanity e-mail services, including “FlairMail.com,” which registered and licensed domain names as part of e-mail addresses.

Defendant registered the domain name “northernlights.com” in October 1996 and began using it as a vanity e-mail address shortly thereafter. In April 1999, however, defendant began using the “northernlights.com” domain name as an Internet search site. In addition, that site provided a list of businesses using the name “Northern Light,” including plaintiff’s search engine, and provided links to various sites, including the FlairMail site. Plaintiff’s search site began receiving several thousand referrals per day from defendant’s search site.

Trial Court Proceedings Edit

In August 1999, plaintiff filed suit and obtained a preliminary injunction requiring defendant to “black out” its website except for a single page listing links to (1) plaintiff’s search engine, (2) defendant’s “flairmail.com” website, and (3) a list of other “Northern Light” businesses. In its decision, the court first, found that plaintiff was likely to succeed on the merits on its trademark infringement and ACPA claims; second, refused to modify the preliminary injunction in place; and, third, denied defendant’s motion to dismiss for failure to state a claim.

The court found a “high” likelihood of success on the merits of the trademark infringement claim, noting that consumers were more likely to be confused “as to the ownership of a web site than traditional patrons of a brick-and-mortar store would be of a store’s ownership.” And although plaintiff’s evidence of initial-interest confusion was not relevant because the First Circuit did not recognize initial-interest confusion, the absence of actual confusion was not important where the parties’ search sites coexisted for only a few months.

Regarding plaintiff’s ACPA claim, defendant’s initial refusal to sell the “northernlights.com” domain name and his use of the name for legitimate e-mail purposes for several years undermined a finding of bad faith. This evidence, however, was outweighed by defendant’s: (1) practice of registering numerous domain names consisting of others’ well-known trademarks (e.g., “hewlettpackard.com,” “givenchy.com”); (2) creation of fictional entities to register them (e.g., The Lois Katherine Lane Club registered “loislane.com”); and (3) dubious and inconsistent explanations for selecting these domain names (e.g., defendant allegedly registered “yankees1.com” to identify “Americans” even though he registered numerous other domain names consisting of baseball team names and the number “1”); and (4) subsequent “willingness to sell at least the northernlights.com website pointer to the plaintiff ‘if the price is attractive enough.’”

Lastly, plaintiff filed for contempt, alleging that defendant violated an earlier preliminary injunction requiring defendant to post the following three disclaimers on its website: “(1) IF YOU ARE LOOKING FOR FLAIRMAIL, THE FREE E-MAIL SERVICE, FOUND AT www.flairmail.com, click here; (2) IF YOU ARE LOOKING FOR THE NORTHERN LIGHT SEARCH ENGINE, FOUND AT www.northernlight.com, click here; and (3) IF YOU ARE LOOKING FOR BUSINESSES THAT ARE LISTED WITH THE NORTHERN LIGHTS COMMUNITY (Not affiliated with the Northern Light search engine), click here.”

Defendant posted these three disclaimers and properly linked the first two to the specified websites. But the third, which was supposed to link to businesses affiliated with the Northern Lights community, instead linked to a message board discussing the lawsuit. Under the court’s analysis of whether this message-board link constituted contempt, defendant’s greeting page technically complied with the order because defendant copied the disclaimer verbatim. Because it was not completely “clear and unambiguous” whether the injunction covered only the actual text on the “greeting page” or whether it also included the linked-to pages, defendant’s link to the message board fell short of the First Circuit’s “clear and convincing” standard for contempt.

Appellate Court Proceedings Edit

On appeal, defendant claimed district court error in (1) finding a likelihood of success on plaintiff’s trademark infringement claim based on a finding that defendant acted in bad faith using the ACPA’s test for a bad-faith intent to profit from plaintiff’s mark, and (2) retroactively applying the ACPA.

Initially, the First Circuit held that the ACPA’s “bad-faith intent to profit” factors were relevant in analyzing the issue of bad faith in a trademark infringement analysis. The appeals court then held that the lower court’s finding of bad faith was not clearly erroneous, noting that defendant’s “well-established pattern of registering multiple domain names containing famous trademarks . . . [was] highly relevant to the determination of bad faith . . . “ in the likelihood-of-confusion analysis. Similarly, the district court’s finding that defendant was not entitled to the ACPA’s “escape clause,” which exempts those who “believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful,” was not clearly erroneous.

Defendant’s various and “oft-changing” fair-use explanations “evince a lack of subjective belief in the domain name’s fair use.” Although defendant did not expect revenue from his site, he could still have a bad-faith intent to profit because defendant “likely hoped to cash in on the confusion surrounding the sponsorship of the websites by finding famous trademark holders willing to pay defendants to end the diversion of Internet traffic from their website to defendants’ sites.”

Finally, as to the permissibility of retroactively applying the ACPA, the appeals court declined to reach this issue because the district court ultimately entered the preliminary injunction on the basis of plaintiff’s trademark infringement claim, not the ACPA claim.

On the motion for rehearing and rehearing en banc, defendants argued that a rehearing was needed:

  • to “secure and maintain uniformity with prior decisions,” citing an 1992 case, and
  • to determine (a) whether in personam jurisdiction could be obtained by service of a second summons just before a hearing, (b) the proper interpretation of the ACPA, and (c) whether the preliminary injunction violated the First Amendment.”

All five active judges of the First Circuit ruled on defendants' motions, denying both a simply rehearing and a rehearing en banc.

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