Porsche Cars N. America, Inc. v. Porsche.com, 51 F.Supp.2d 707, 51 U.S.P.Q.2d (BNA) 1461 (E.D. Va. 1999) (full-text), vacated and remanded, 215 F.3d 1320, 55 U.S.P.Q.2d (BNA) 1158 (4th Cir. 2000), aff’d, 55 U.S.P.Q.2d (BNA) 1158 (4th Cir. 2000), rev'd and remanded, 302 F.3d 248 (4th Cir. 2002) (full-text).
Trial Court Proceedings Edit
Plaintiff filed an in rem action asserting federal dilution claims against 128 domain names. Many of the domain-name defendants defaulted and plaintiff voluntarily dismissed its claims against many others, leaving only five domain names — two owned by a British citizen named Holmgreen and three owned by a resident of the state of Georgia. The district court granted the motion to dismiss by the British domain names, holding that 28 U.S.C. §1655 did not provide in rem jurisdiction for FTDA claims. According to the court, the FTDA can support only In personam proceedings against those who register domain names that violate the FTDA. The district court considered both the language of the FTDA and constitutional concerns in rendering its decision.
Because the FTDA specifically mentions that it applies against a "person" or "persons," the district court held that Congress did not intend the FTDA to apply against "marks" or "domain names." Due process required that courts have in personam jurisdiction over the property owner before the court has in rem jurisdiction over the res. Accordingly, because plaintiff's complaint did not allege facts that would allow the court to assess its in personam jurisdiction, it dismissed the case.
Appellate Court Proceedings Edit
On June 9, 2000, the Fourth Circuit vacated the district court's order of dismissal and remanded the case for reconsideration under the ACPA, which was enacted while plaintiff's appeal was pending. The appeals court did not reach the question of whether the district court could exercise in rem jurisdiction over plaintiff's dilution claims.
Subsequent Trial Court Proceedings Edit
On December 29, 2000, the district court again dismissed plaintiff's dilution claims for lack of jurisdiction under 28 U.S.C. §1655. It also dismissed the ACPA claims against the Georgia domain names because personal jurisdiction was available against defendant Holmgreen. The district court also dismissed, without prejudice, the ACPA claims against the British domain names, because the complaint did not allege sufficient facts that plaintiff had exercised due diligence in seeking to obtain personal jurisdiction over the owner.
Plaintiff then filed a second amended complaint, but this time the court denied the British domain names' motion to dismiss, finding that plaintiff had exercised due diligence and demonstrated a lack of personal jurisdiction over Holmgreen. In July 2001, the British domain names advised the court that Holmgreen had submitted to personal jurisdiction in the Southern District of California. The British domain names then moved to dismiss the in rem ACPA claims because Holmgreen was subject to personal jurisdiction in a court in the United States, and the court granted this motion.
Subsequent Appellate Court Proceedings Edit
On August 23, 2002, the Fourth Circuit held that once in rem jurisdiction has been established in a case, "it is ordinarily complete" and is not lost simply because in personam jurisdiction has been established later in the case. The appeals court then concluded that the British names had objected "much too late" to in rem jurisdiction, by waiting to object until just three days before trial, which was five months after the court's finding that in rem jurisdiction was proper.
The court next dismissed defendant's argument that various in rem provisions of the ACPA violated the Due Process Clause, noting that the claims against the domain names were entirely "related to the property" located within the judicial district. And Holmgreen's expressed "outrage" at plaintiff's settlement tactics did not excuse his lengthy delay. The appeals court did not reach the broader questions of "what showing, if any, could justify reconsideration of an early finding that . . . in rem jurisdiction existed . . . or when and how such a showing would have to be made."
Finally, the court rejected plaintiff's argument, without reference to the ACPA, that the district court had jurisdiction under 28 U.S.C. §1655 over its FTDA claims seeking transfer of the British and Georgia domain names under the FTDA. Because a successful FTDA plaintiff is entitled by statute to only an injunction preventing use of the defendant's mark, the court held that an FTDA claim could not give a trademark owner a "lien" on an allegedly dilutive domain name under Section 1655. According to the court, "providing a domain name owner with a parallel trademark-dilution action under §1655 would eviscerate restrictions that Congress placed on actions under the ACPA. We decline to expand trademark-dilution law to provide an alternative and more permissive route to in rem jurisdiction than Congress provided in the ACPA."
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