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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...

GlobalSantafe Corporation v.

250 F.Supp.2d 610 (E.D. Va., Feb. 5, 2003)

In this in rem action commenced under the Anticybersquatting Consumer Protection Act, the Court holds that it can direct a top level domain registry – here Verisign – located in Virginia to cancel the domain registration of a domain found to be registered in violation of the ACPA.  In this case, the Court directed that such cancellation be effected unilaterally by the domain registry, which was directed to place the domain name on ‘hold’ status, thereby rendering it inactive, until such time as it is transferred to the trademark holder.

The Court holds that such relief is appropriate here, given the fact that the Korean domain name registrar with whom the domain name at issue was registered refused to transfer the domain as directed in a prior judgment issued by the Court.  After the Court issued this order, the domain registrant obtained an injunction from a Korean court, enjoining the registrar from transferring the domain.  The Korean registrar, in the face of this subsequent order, refused to comply with the US Court’s direction to transfer the domain to plaintiff.

The Court, on default, found that the domain registrant had violated the ACPA by registering the domain name at issue – – one day after Global Marine and SantaFe announced their agreement to merge into an entity to be called GlobalSantaFe.

Plaintiff GlobalSantafe is the product of a merger of two entities – Global Marine and SantaFe International – each engaged in the business of providing contract drilling and related services.  These entities announced their agreement to merge on September 3, 2001.  At this time, Global Marine held a federally registered trademark in “Global Marine” while SantaFe held a common-law trademark in ‘SantaFe.’  Shortly after the merger, plaintiff applied for federal trademark registration for the GlobalSantaFe mark.  The Court, in its decision, does not indicate when plaintiff first commenced use of the mark or whether they filed an intent to use registration in connection with GlobalSantaFe.

Less than one day after this announcement, Jongsun Park registered the domain name with the Korean domain registrar Hangang.  This domain was subsequently transferred by Park to Fanmore Corporation.  No evidence was submitted to the Court that either Park or Fanmore had any legitimate interests in the GlobalSantafe mark or had operated a business under that name.

Plaintiff subsequently commenced an ACPA in rem action against the GlobalSantafe domain name.  Jurisdiction was proper in Virginia, under the ACPA, because the .com registry was located there.  The domain registrant did not appear, and the Court found the domain was registered in violation of the ACPA.

The Court directed that the Korean domain registrar – Hangang – transfer the domain to plaintiff.

The domain registrant’s technical contact then commenced an action in Korea.  Finding the United States court lacked jurisdiction over the domain, the Korean court enjoined Hangang from transferring the domain in response to the US Court order.  The Korean court apparently held that jurisdiction was lacking because it was premised on the presence in the forum of the domain registry, with whom the domain registrant had no direct interaction, and not the domain registrar, with whom he had contracted when he registered his domain.

As a result, plaintiff returned to the US District court, and sought further modification of its prior judgment, so as to direct the domain registry to cancel the domain.  Plaintiff sought to effectuate such cancellation by having the domain registry place the domain on ‘hold’.  This had the effect of preventing the use of the domain on the Internet, as it disconnected the domain name from any IP address.  However, it also had the effect of maintaining the registration of the domain in the name of the original registrant.  Finding such relief appropriate here, the Court modified its judgment, and so directed Verisign to cancel the domain and place it on hold.

The Court held that plaintiff had sufficiently established its entitlement to relief under the Anticybersquatting Consumer Protection Act.  Jurisdiction was proper in Virginia, because that was the location of the .com domain registry Verisign.
 Plaintiff was permitted to proceed in rem because it could not obtain jurisdiction in the United States over the domain registrant, who appeared to be based in Korea.  There was no evidence that the domain registrant was present in the United States.  Similarly, the website operated at the disputed domain did not give rise to jurisdiction, as it was a passive site that did no more than display a picture.

Finally, plaintiff was entitled to relief under the ACPA, because the domain at issue “ is confusingly similar to the marks of Global Marine and Santa Fe, and identical to the mark of the merged entity GlobalSantaFe.”  In reaching this result, the Court was influenced by the fact that the domain registrant “clearly registered the domain name after, and in response to, GlobalSantaFe’s use of the GlobalSantaFe mark in its merger announcement.”

Notably, the Court held that in the Fourth Circuit, “a showing of bad faith is not required in an in rem trademark infringement action under the ACPA.”

The Court held that one of the remedies available to an injured party under the ACPA is cancellation of the domain name.  15 U.S.C. Section 1125(d)(2)(D)(i).  This can be accomplished in one of several ways.  First, the domain registrar can cancel the domain registration, which ends the domain name registrant’s ownership of the disputed domain, and allows another to register it.  The registrar accomplishes this by sending commands to the domain registry, which modifies the domain Registry file to reflect the appropriate changes in the domain’s registration.  Second, the domain registry can place the disputed domain name on ‘hold.’ This prevents anyone from using that domain name to reach a website, as it disconnects that domain from the corresponding IP address of that website in the TLD zone file.  Without such a connection, users entering the domain name will not be taken to the website.  Finally, the domain registry can unilaterally cancel the domain registration, by deleting the registration information in the Registry Database and removing the domain name from the TLD zone file.

The Court held that, in the appropriate case, each remedy is available to an aggrieved mark holder.  Said the Court:

While the ACPA expressly authorizes a ‘court order for the … cancellation of the domain name,” it does not require that such orders be directed only at the current registrar, nor does it shield the registry from cancellation orders …  In sum, all three means of cancellation may be appropriate means of carrying out the cancellation remedy granted by the ACPA.  To be sure, it is normally appropriate to direct a cancellation order primarily at the current domain name registrar and to direct that the cancellation proceed through the usual channels.  However, in situations where, as here, such an order has proven ineffective at achieving cancellation, it becomes necessary to direct the registry to act unilaterally to carry out the cancellation remedy authorized under the ACPA.  In this regard, a court is not limited merely to the disabling procedure envisioned by VeriSign’s contractual arrangements, but may also order the registry to delete completely a domain name registration pursuant to the court’s order, just as the registry would in response to a registrar’s request.  Indeed, in order to vindicate the purposes of the ACPA, disabling alone in many cases may not be sufficient, for it does not oust the cybersquatter from his perch, but rather allows the cybersquatter to remain in possession of the name in violation of the trademark holder’s rights.

Here, at GlobalSantaFe’s request, the court directed Verisign to cancel the registration of the disputed domain by placing it on ‘hold,’ as described above.

Finally, the Court held that principles of comity did not require it to yield to the injunction of the Korean court.  Under the ‘first in time’ rule, applicable to in rem actions, the first court seized of jurisdiction over the property may exercise jurisdiction to the exclusion of all other courts.  Under this rule, it was the United States District Court, and not the Korean Court, that held jurisdiction, as it was the first to address and take jurisdiction over this matter.

Nor was abstention appropriate in this case.  Said the Court:

There is clearly no basis for abstention on comity grounds where, as here (i) the proceedings are not current, the Korean proceeding having been commenced in an effort to block enforcement of the already issued judgment in this case (ii) the foreign court proceeding is intended to frustrate the enforcement of the Judgment of this Court, and (iii) that Judgment supports significant public policies under the United States law.  Thus comity concerns do not bar the amendment of the Judgment Order to grant GlobalSanteFe the additional remedy of cancellation to which it is entitled under the ACPA.

The Court accordingly amended its prior judgment, and directed Verisign to cancel the disputed domain name.

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