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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Porsche Cars North America, Inc., et al. v. Porsch.com, et al.

51 F. Supp. 2d 707 (E.D. Va., June 8, 1999), vacated and remanded 215 F.3d 1320 (4th Cir., 2000)

Plaintiffs are the owners of the trademarks "Porsche" and "boxster" which they use in connection with their marketing of various products and services, including motorcars. Plaintiffs obtained domain name registration for the names "porsche.com" and "porsche-USA.com."

Plaintiffs discovered that a number of domain names similar to their famous marks had been registered with NSI, including "porsch.com" and "boxster.com." Claiming these domain names diluted their famous marks, plaintiffs brought suit under the Federal Trademark Dilution Act, 15 U.S.C. §1125(c).

Plaintiffs elected to proceed with this suit in a novel manner. Rather than file an in personam action against those who had registered the allegedly offending domain names, plaintiffs commenced an in rem action against the 128 domain names themselves. Plaintiffs sought to proceed in this fashion because they could not obtain the identity and addresses of a number of the individuals or entities that had registered the domain names at issue. This procedure was also attractive because it permitted plaintiffs to bring a single suit in a single jurisdiction against all 128 domain names, rather than multiple suits in jurisdictions scattered throughout the country.

The owners of two of the challenged domain names, "porsche.net" and "porscheclub.net," moved to dismiss the complaint for want of personal jurisdiction. Their motion was premised on their contention that the Federal Trademark Dilution Act did not authorize in rem actions. The District Court agreed and dismissed the complaint.

According to the Court "Rule 4(n) of the Federal Rules of Civil Procedure authorizes federal courts to exercise in rem jurisdiction over property within their domain, either (1) if a federal statute so provides; or (2) if state law so permits and personal jurisdiction over the property owner cannot be had."

Because relief was sought under the Federal Trademark Dilution Act, the question at hand was whether that statute authorized the commencement of in rem actions against allegedly improper marks. The Court concluded that it did not. To support its conclusion, the court pointed to the language of the statute, which "rather than authorizing an injunction against a diluting mark itself ... only provides a remedy against another 'person's' commercial use of that mark." The court contrasted this with the language of other statutes, such as the Lanham Act and the Tariff Act, which expressly permit in rem actions. The Court found from this comparison that "the language of the Trademark Dultion Act does not appear to permit in rem actions against allegedly diluting marks...". The court further held that a contrary reading of the statute would call its constitutionality into question. Said the court:

courts generally cannot exercise in rem jurisdiction to adjudicate the status of property unless the Due Process Clause would have permitted in personam jurisdiction over those who have an interest in the res. ... But Porsche's Complaint would have the Court do precisely that -- by validating an in rem proceeding that would cancel or reassign certain domain names, merely because NSI maintains the underlying registration certificates within this district, without regard to the interests of those who registered them, and even though in personam jurisdiction against registrants who live elsewhere might violate due process.

As a result, the Court concluded that the Federal Trademark Dilution Act did not authorize in rem actions and dismissed the Complaint.

The full text of the court's decision can be found on a web site maintained by the Pravel IP Law Firm.

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