Sallen v. Corinthians Licenciamentos Ltda., 2002 U.S. Dist. LEXIS 19976 (D. Mass. Dec. 19, 2000), rev'd, 273 F.3d 14, 60 U.S.P.Q.2d (BNA) 1941 (1st Cir. 2001) (full-text).
Factual Background Edit
In two separate UDRP proceedings, WIPO panels ordered the transfer of plaintiff's domain names "corinthians.com" and "cruzeiro.com" to defendants. Under Rule 4(k) of the UDRP, to prevent the transfer of any domain names ordered to be transferred according to a UDRP decision, the registrant must file a lawsuit against the complainant in a jurisdiction to which the complainant submitted (either where the registrar is located or where the registrant is located) and timely submit proof of that lawsuit to the registrar.
Trial Court Proceedings Edit
Under 15 U.S.C. §1114(2)(D)(v), Plaintiff filed two actions in the jurisdiction to which the complainant submitted, the District of Massachusetts, seeking a declaratory judgment that his registration of these domain names did not violate the ACPA. Defendants filed motions to dismiss both actions for lack of subject-matter jurisdiction, arguing that there was no case or controversy because defendants had not threatened suit under the ACPA.
Because defendants later represented that they had no intention to sue plaintiff under the ACPA, the district court held that there was no case or controversy and granted plaintiff's motion to dismiss. Plaintiff's representation was bolstered because the only relief available under the ACPA in these two cases would be transfer of the domain names. Damages were not available because the domain names were registered before enactment of the ACPA.
Appellate Court Proceedings Edit
On December 5, 2001, the First Circuit reversed the district court's dismissal of plaintiff's complaint. According to the court, this case raised an issue of first impression — "whether a domain name registrant, who has lost in a WIPO-adjudicated UDRP proceeding, may bring an action in federal court under §1114(2)(D)(v) seeking to override the result of the earlier WIPO proceeding by having his status as a nonviolator of the ACPA declared and by getting an injunction forcing a transfer of the disputed domain name back to him." Although defendants had no intention of suing plaintiff under the ACPA, the appeals court held that an actual controversy did exist between the parties concerning rights to the domain name "corinthians.com."
Defendants argued that a declaration of compliance with the ACPA could not redress a UDRP] defeat, but rather was only relevant to defend against a potential lawsuit under that statute. According to the appeals court, however, "Section 1114(2)(D)(v) provides a registrant who has lost a domain name under the UDRP with a cause of action for an injunction returning the domain name if the registrant can show that she is in compliance with the ACPA."
In support of this decision, the court noted that: (1) the UDRP expressly contemplates judicial intervention, and that a judicial outcome will "overrule" the UDRP outcome; (2) there is overlap in the elements of claims under the UDRP and the ACPA; (3) the UDRP does not create new law, but rather is based upon internationally accepted trademark principles that were established by courts such as itself; and (4) the legislative history of the ACPA supported the proposition that Section 1114(2)(D)(v) was intended to provide registrants in plaintiff's position with a cause of action against reverse domain-name hijacking by trademark owners using the UDRP process to force transfer of domain names owned by rightful users under U.S. law.
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