Defendant's motion for relief from judgment is prohibited by MCR 6.502(G).
ef692 F.2d 1250, 1254 (9th Cir. 1982). If the mark has been properly registered, the burden shifts to the alleged infringer to show by a preponderance of the evidence that the mark is not protectable.
Zobmondo,
602 F.3d at 1114. The alleged infringer may meet this burden by demonstrating "through law, undisputed facts, or a combination thereof that the mark is invalid."
Id. (quotation omitted). However, the presumption of validity for a registered mark is strong, and the alleged infringer bears a heavy burden to overcome it at the summary judgment stage.
Id.
Here, the LLC has obtained a registered mark from the PTO for "BME" in relation to providing an online interactive database of photos and videos in the field of body modification, and advertising and directory services to provide links to others' websites. The burden thus shifts to Plaintiff Ricks to overcome the presumption of validity and protectability the registration provides, including the presumption that the mark is not generic. Ricks has not done so.
Ricks has presented no evidence that consumers seeking out "BME" do so as an abbreviation for body modification ezines as a class of products, rather than as a source identifier for the LLC. Rather, Ricks relies entirely on the argument that BME is an abbreviation for Body Modification Ezine, and those words generically describe a class of products. It is doubtful that Ricks' pure legal argument could meet his heavy burden of overcoming the presumption of validity due to the registration of the BME mark. But even if it could, Ricks has presented no evidence that a class of products known as body modification ezines even exists. Ricks has not identified a single other entity which identifies itself as a body modification ezine. The fact that no other competitor would answer the question "what are you" by describing itself as a body modification ezine, much less as "BME," weighs against a finding of genericness.
Moreover, the LLC has presented evidence that the relevant community within the purchasing public recognizes the abbreviation "BME" as a source identifier for the LLC, and not with body modification ezines generally. Vidra, Angel, Wimberly, and Falkner all aver in their declarations that the tattooing, piercing, and body modification community refers to the LLC's business as "BME" and has done so for many years. Further, the chat threads and newspaper articles all refer to the LLC as "BME," and do not use the term generically to discuss body modification ezines generally. In fact, none of the articles discuss or use the term "body modification ezine" or its abbreviation "BME" generically.
One article uses BME as an acronym for "Body Modification Enthusiasts." (Def.'s Special Ex. 1, Ex. G.) That single article does not establish that BME stands for "body modification ezines" generally, and in fact uses the acronym for something other than a class of goods known as body modification ezines.
The LLC also has presented evidence from the founder of the BMEzine business, Shannon Larratt, that the "BME" mark signifies more than just an abbreviation for "BMEzine." Rather, the abbreviation also stands for "Be Me," a theme which was explored on the website through self expression and articles on a person's outside reflecting who they are on the inside. The LLC thus has presented evidence that BME is more than just a generic abbreviation for a generic phrase, but has a meaning distinct from those words.
In sum, considering the strong presumption in favor of finding the LLC's mark is valid and protectable, and viewing all facts and reasonable inferences therefrom in the light most favorable to the LLC as the nonmoving party, genuine issues of material fact remain that the "BME" mark is not generic. The Court therefore will deny Ricks' motion for summary judgment on this issue.
B. Registration Date
The Court's aim in conducting statutory construction is to discern congressional intent in enacting a particular statute.Cooper v. F.A.A., 596 F.3d 538, 544 (9th Cir. 2010). The Court begins the statute's plain language. Id. If the statutory language is "plain and unambiguous," the Court's inquiry is at an end. Id. "To discern the text's plain meaning, words will be interpreted as taking their ordinary, contemporary, common meaning." Id. (quotation omitted).
Pursuant to the ACPA, a person "shall be liable in a civil action by the owner of a mark" if that person "registers, traffics in, or uses a domain name" with the bad faith intent to profit from a famous or distinctive mark. 15 U.S.C. § 1125(d)(1)(A). The statute does not refer to an original registration or the registration that creates the domain name.See So. Grouts Mortars, Inc. v. 3M Co., 575 F.3d 1235, 1239, 1245-46 (11th Cir. 2009) (considering defendant's possible liability for re-registering domain name but finding no bad faith intent to profit off the mark); Schmidheiny v. Weber, 319 F.3d 581, 582 (3d Cir. 2003) (holding that ACPA section prohibiting registration of a living person's name without the person's consent and with the intent to profit was not limited to the domain name's "`creation date'" because "the plain meaning of the word `registration' is not limited to `creation registration.'"). The Act provides no exception for re-registrations by the same owner. Any registration thus may bring the registrant within the statute's purview.
Congressional intent would be undermined by Ricks' proposed interpretation. If a domain name was registered in good faith originally, but thereafter re-registered in bad faith, the cybersquatter would escape liability, a result not supportable by the statutory scheme. See Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1202 (9th Cir. 2009) ("Evidence of bad faith may arise well after registration of the domain name."); Schmidheiny, 319 F.3d at 583 ("To conclude otherwise would permit the domain names of living persons to be sold and purchased without the living persons' consent, ad infinitum, so long as the name was first registered before the effective date of the Act. We do not believe that this is the correct construction of the Anti-cybersquatting Act."); Storey v. Cello Holdings, LLC, 347 F.3d 370, 385 (2d Cir. 2003) ("Congress intended the cybersquatting statute to make rights to a domain-name registration contingent on ongoing conduct rather than to make them fixed at the time of registration."). The Court therefore will deny Ricks' motion for summary judgment to the extent it seeks a declaration that the original registration date is the only relevant registration date in this action.
Ricks, either himself or through intermediaries, registered the bme.com website in March and April 2005, October 2007, and June 2008. Consequently, if the LLC's "BME" mark was distinctive or famous before any of these dates, Ricks would not be entitled to summary judgment on the LLC's counterclaim for cybersquatting.
All of these dates pre-date the registration of the LLC's "BME" mark with the PTO. However, the LLC has presented evidence raising a genuine issue of material fact that the LLC or its predecessors owned common law rights to a distinctive mark in "BME" prior to March 2000, March and April 2005, October 2007, and June 2008. The LLC has presented evidence that BMEzine has been on the internet in one form or another since 1994, and that it quickly thereafter gained fame in the relevant community. The LLC also has presented evidence that those within the community knew of and referred to the BMEzine as "BME," and did so as a source identifier, not merely as an abbreviation for body modification ezines generally. In addition to the relevant body modification community, mainstream print sources referenced readers to the BMEzine website, and referred to the business as "BME" prior to and after March 2000. None of those articles referenced body modification ezines generally or used BME as an abbreviation for body modification ezines as a class of products.
Ricks concedes, for purposes of this motion, that viewing the facts in the light most favorable to LLC, it or its predecessors owned any intellectual property rights associated with the BMezine business, to the extent any such intellectual property rights existed. (Pl.'s Mot. Summ. J. (Doc. #55) at 7.)
The LLC also has presented evidence that BMEzine used "BME" as a source identifying mark. As discussed previously, BMEzine's founder, Shannon Larratt, described his use of the BME mark as more than just an abbreviation for "Body Modification Ezine." The BMEzine family of websites used BME in the website addresses themselves, in the text of various website content, and as descriptors for segments of the BMEzine websites (i.e., "bme/hard"). Moreover, the LLC has presented evidence that the BME mark was viewed as sufficiently valuable intellectual property to be the subject of a license agreement in relation to the bmeshop website. Viewing the facts in the light most favorable to the LLC, a genuine issue of fact remains as to whether the LLC owned protectable rights in a distinctive mark consisting of the letters "BME" in relation to online body modification-related content as of March 2000 and later. The Court therefore will deny Plaintiff's motion for summary judgment on Defendant LLC's counterclaim for cybersquatting.
V. GEE WHIZ'S MOTION FOR SUMMARY JUDGMENT (Doc. #56)
Third Party Defendant Gee Whiz moves for summary judgment, arguing it never has owned, registered, or used the domain name bme.com, it simply acted as a domain name privacy service for Ricks. Defendant responds that Gee Whiz registered, trafficked in, or used bme.com because it was the registrant of the domain name, and courts have held that entities providing privacy services may be liable for cybersquatting. Alternatively, Defendant argues Gee Whiz is Ricks' alter ego.
The Court will deny Gee Whiz's motion. As discussed in relation to Plaintiff Ricks' motion for summary judgment, the Act predicates liability on registration, use, and trafficking. That another person may have owned the domain name does not relieve Gee Whiz of its own liability for its acts in registering, trafficking in, or using the domain name. The LLC has presented evidence that as of May 9, 2008, Gee Whiz was identified as the registrant of the bme.com website. (Def.'s Opp'n (Doc. #68), Ex. F.) Gee Whiz therefore may be liable if it registered the domain name in bad faith, even if Ricks was the actual owner of the domain name. The Court will deny Third Party Defendant Gee Whiz's motion for summary judgment.
VI. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON ITS COUNTERCLAIMS (Doc. #57/Doc. #61)
Defendant moves for summary judgment on its counterclaims for cybersquatting and trademark infringement and dilution. Defendant argues it owns the "BME" trademark, and that mark has acquired distinctiveness in the relevant market. Defendant further argues Ricks has demonstrated bad faith intent to profit from the BME mark, as he has been on notice of potential infringement since at least 2004, he escalated his use of the mark to include links to tattoo and piercing websites, he tried to sell the domain name at an exorbitant price, and he is a serial cybersquatter. Defendant contends there is a likelihood of confusion, as the marks are similar, offer related content, and use the same marketing channels. Defendant also argues there is evidence of actual confusion in the record. Finally, Defendant asserts there is no basis for safe harbor protection for Ricks.
Ricks and Gee Whiz respond by arguing the significance of various other exhibits or statements in Defendant's motion, including Defendant's efforts to paint Ricks as a serial cybersquatter. On the merits of the cybersquatting and trademark infringement claims, Ricks and Gee Whiz argue Defendant did not own the rights to the Body Modification Ezine marks at the time Ricks and/or Gee Whiz registered bme.com or at any time during an alleged infringing use. Ricks and Gee Whiz also contend issues of fact remain as to whether Ricks acted in bad faith, whether Defendant used "BME" as a source identifier, and whether BME acquired distinctiveness as source identifier for Defendant. Finally, Ricks and Gee Whiz argue that issues of fact remain as to likelihood of confusion. In reply, Defendant objects to the declaration of Shannon Larratt as unsworn.
A. Shannon Larratt's Declaration
Defendant LLC objects to the use of Shannon Larratt's Declaration, attached as exhibit 2 to Plaintiff Ricks' opposition. Defendant LLC contends the declaration was not made under penalty of perjury, and therefore cannot support Ricks' opposition.
Shannon Larratt's declaration states that he "declare[s] under penalty of perjury, as follows "(Pl.'s Opp'n to Def.'s Mot. Summ. J. (Doc. #95), Ex. 2.) Shannon Larratt's declaration does not indicate where it was executed, but he states that he is a resident of Ontario, Canada. (Id.) In paragraph 3, Shannon Larratt states that the "statements herein are truthful." (Id.) In paragraph 13, of this declaration, Shannon Larratt avers that attached to the declaration as Exhibit A is "a true and correct copy of the Responding Affidavit of Shannon Larratt dated October 25, 2007, including all exhibits, filed in the Ontario Superior Court of Justice as part of the litigation Bmezine.com LLC and Rachel Larratt v. Shannon Larratt, Court File NO. 07-CL-721, and all of the facts and statements stated therein are truthful."(Id.) Attached to Shannon Larratt's declaration as Exhibit A is a sworn affidavit filed by Shannon Larratt in Ontario Superior Court of Justice. (Id., Attach. A.) The affidavit states that it is made under oath, and was sworn before the Commissioner for Taking Affidavits in Toronto, Canada. (Id.)
Pursuant to 28 U.S.C. § 1746, if a matter is required or permitted to be supported by a sworn declaration in writing, the requirement may be met by providing an unsworn declaration so long as the declaration is signed by the maker as true under penalty of perjury, and dated, in "substantially" the form set forth in the statute. If the declaration is executed outside the United States, the suggested language is as follows:
I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature).
28 U.S.C. § 1746(1). If the declaration is executed within the United States, the following language is suggested:
I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature).
Id. § 1746(2). The purpose of the oath or affirmation is to ensure the declarant understands "the legal significance of the declarant's statements and the potential for punishment if the declarant lies."
U.S. v. Bueno-Vargas, 383 F.3d 1104, 1111 (9th Cir. 2004).
Exhibit A to Shannon Larratt's declaration is Shannon Larratt's sworn affidavit. Because that affidavit was sworn, the Court will deny the LLC's objection. However, Shannon Larratt's declaration is not sworn, and does not substantially comply with § 1746. Shannon Larratt states that he is making the declaration under penalty of perjury, and he states that all statements therein are true. However, Shannon Larratt does not indicate he is subject to the penalties of perjury in the United States. Because he avers he is a Canadian citizen, and the declaration does not indicate where it was executed, the Court cannot be certain that the declaration meets § 1746's requirements.
The Court nevertheless will not strike the declaration, as its admission is harmless. The critical facts which Shannon Larratt recites in the declaration regarding his alleged ownership rights in the BMEzine intellectual property are repeated in the sworn affidavit attached thereto. Thus, the declaration does not add any significant facts not already set forth in the sworn affidavit. The Court therefore will consider the Shannon Larratt sworn affidavit and unsworn declaration.
B. Ownership
To establish claims for cybersquatting under the ACPA and trademark infringement or dilution under the Lanham Act, the LLC "must demonstrate that it owns a valid mark." Lahoti, 586 F.3d at 1196-97. A registration of a mark is prima facie evidence of the owner's ownership of the mark. 15 U.S.C. § 1057(b). However, a trademark owner generally cannot sue for and recover damages for infringement that occurred prior to the owner acquiring the mark.H J Foods, Inc. v. Reeder, 477 F.2d 1053, 1056 (9th Cir. 1973);George W. Luft Co. v. Zande Cosmetic Co., 142 F.2d 536, 541 (2d Cir. 1944). Where a mark owner acquires its rights in the mark through assignment, it acquires no right to sue for pre-assignment infringements unless its right to do so is expressly set forth in the assignment agreement, or if the parties' contract provides for the acquisition of all the assets of the former trademark holder. H J Foods, Inc., 477 F.2d at 1056; George W. Luft Co., 142 F.2d at 541-42; Lanard Toys Ltd. v. Novelty Inc., 511 F. Supp. 2d 1020, 1030 (C.D. Cal. 2007).
The LLC does not dispute that it had to own the marks at the time of the alleged infringement to bring its claims. Instead, it argues there is no issue of fact that it always has owned the BME marks. The LLC attempts to portray the dispute between the Larratts as a dispute over ownership of the LLC itself, rather than over the intellectual property. The LLC thus contends it always owned the intellectual property, and a dispute between the Larratts over who owned the LLC would not change the fact that the LLC owned the marks.
The evidence presented demonstrates that the dispute between the Larratts was not over who owned the LLC. Rather, their dispute was over whether the BME business and its related intellectual property was owned by the LLC or by Shannon Larratt individually, as a sole proprietor. Shannon Larratt never owned shares in the LLC, and never claimed to do so. Shannon Larratt contended that he owned the BMEzine business and its related intellectual property, including the BME trademark, individually and that the LLC never owned that property until the parties settled their dispute and he assigned his rights in BME to the LLC in September 2008. The LLC has presented no evidence demonstrating any infringing activity after the assignment in September 2008. A genuine issue of material fact therefore remains as to whether the LLC, as opposed to Shannon Larratt, owned the BME business and related intellectual property rights at the time of the alleged infringing activity.
The LLC makes no argument that the September 2008 assignment of whatever rights Shannon Larratt had in the BME business and related intellectual property constituted either an express assignment of the right to sue for past infringement, or a sale of all of Shannon Larratt's assets to the LLC, which necessarily would include the right to sue for past infringements. The Court therefore will not consider the issue.
Genuine issues of material fact remain as to whether the LLC owned the BME mark at the time of any alleged infringement by Ricks in this action. The Court therefore will deny the LLC's motion for summary judgment on its ACPA and trademark infringement and dilution counterclaims.
VII. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (Doc. #59/Doc. #62)
Defendant moves for summary judgment on Ricks' claims asserted in the First Amended Complaint. As to the reverse cybersquatting claim, Defendant argues Ricks will be unable to establish legal use of the bme.com domain name. As to the second claim for relief, Defendant contends it has the rights to trademark protection in the BME mark, either through its registration or through the Lanham Act, and thus made no misrepresentation regarding the domain name or its similarity to Defendant's mark. Defendant also argues that even if Ricks could prevail on this claim, the relevant statute provides only for injunctive relief, not damages. As to those claims asserting fraud, Defendants argue Ricks lacks standing to challenge the registration, the statement that Defendant owned the rights to its own marks was not fraudulent, Ricks has not been damaged, and Ricks ought to be sanctioned under Rule 11 for maintaining these claims. Defendant also requests attorney's fees under 15 U.S.C. § 1117(a).
Ricks responds by arguing some of the evidence on which Defendant relies is inadmissible. Ricks also argues Defendant did not acquire the rights associated with "BME" until after the alleged infringement. As to the reverse cybersquatting claim specifically, Ricks argues he must show only that his actions were not illegal under the ACPA, not the entire Lanham Act. Ricks further argues he need show only that his registration or use was not unlawful, not both. As to the misrepresentation claims, Ricks argues Defendant misrepresented its ownership in the alleged marks, and that suffices to state a claim under the ACPA. Ricks claims he has standing to challenge the validity of Defendant's trademark registrations, as his use of bme.com is affected thereby. Ricks argues Rule 11 sanctions are inappropriate, as Defendant has not complied with Rule 11. Finally, Ricks contends attorney's fees under § 1117(a) are not warranted.
A. Reverse Hijacking
Although the ACPA principally was aimed at prohibiting cybersquatting, the Act also provides some protection to domain name registrants against "overreaching trademark owners" who "reverse hijack" a domain name from a registrant where the registrant's actions were lawful. Barcelona.com, Inc. v. Excelentisimo Ayuntamiento De Barcelona, 330 F.3d 617, 625 n. 1 (4th Cir. 2003) (quotations omitted). Pursuant to 15 U.S.C. § 1114(2)(D)(v),
A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.
To prevail on a reverse hijacking claim, the domain name registrant must show "(1) that it is a domain name registrant; (2) that its domain name was suspended, disabled, or transferred under a policy implemented by a registrar as described in 15 U.S.C. § 1114(2)(D)(ii)(II); and (3) that the owner of the mark that prompted the domain name to be suspended, disabled, or transferred has notice of the action by service or otherwise." Barcelona.com, Inc., 330 F.3d at 626. Additionally, the registrant must show that its registration or use of the domain name is not unlawful under "this chapter." 15 U.S.C. § 1114(2)(D)(v).
The parties do not dispute that Plaintiff Ricks will be able to establish these three elements.
Although as codified the ACPA states the registrant must show its actions were not unlawful under "this chapter," the actual enactment states that the registrant must show its actions were not unlawful under "this Act." Pub.L. No. 106-113, 1501A-555, 113 Stat. 21. Courts have differed in describing whether the fourth requirement's reference to "Act" as originally enacted refers to the ACPA or the Lanham Act as a whole. See Storey v. Cello Holdings, L.L.C., 347 F.3d 370, 382 n. 9 (2d Cir. 2003) (noting issue but declining to decide it); Barcelona.com, Inc., 330 F.3d at 628 n. 2 (stating, in dicta in a footnote, that "Act" is "defined to refer to the Trademark Act of 1946 (the Lanham Act)"); Sallen v. Corinthians Licenciamentos LTDA, 273 F.3d 14, 18 (1st Cir. 2001) (describing, without analysis, a reverse hijacking claim as one "for a declaration of nonviolation of the ACPA").
As stated above, statutory construction begins the statute's plain language. Cooper, 596 F.3d at 544. If the statutory language is "plain and unambiguous," the Court's inquiry is at an end. Id. The Court considers the statutory language in "the context of the statute as a whole." Andreiu v. Ashcroft, 253 F.3d 477, 480 (9th Cir. 2001).
The ACPA as enacted does not define what it means by reference to the term "Act." However, it defines what it means when it is referring to the Lanham Act as a whole:
Any reference in this title to the Trademark Act of 1946 shall be a reference to the Act entitled "An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes", approved
July 5, 1946 (
15 U.S.C. 1051 et seq.).
Pub.L. No. 106-113, 113 Stat. 1501, 1501A-548. The ACPA thus indicates that it is not referring to the entire Lanham Act unless it references the Trademark Act of 1946. Contextually, the ACPA uses the term "Act" to refer to the ACPA, not the Lanham Act in its entirety. For example, it states that it "shall apply to domain names registered on or after the date of the enactment of this Act." Id.; see also Pub.L. No. 106-113, 113 Stat 1501, 1501A-550 (giving Secretary of Commerce 180 days after enactment of "this Act" to conduct a study). Indeed, the ACPA refers to the "Act" and the "Trademark Act of 1946" within the same section, confirming that in using the term "Act," the ACPA is referring to itself, not the Lanham Act as a whole:
Sections 3002(a), 3003, 3004, 3005, and 3008 of this title shall apply to all domain names registered before, on, or after the date of the enactment of this Act, except that damages under subsection (a) or (d) of section 35 of the Trademark Act of 1946 (
15 U.S.C. 1117), as amended by section 3003 of this title, shall not be available with respect to the registration, trafficking, or use of a domain name that occurs before the date of the enactment of this Act.
Pub.L. No. 106-113, 113 Stat. 1501, 1501A-552. The Court therefore concludes that to satisfy the ACPA's requirement that a domain name registrant show that its conduct was not unlawful under "this Act," it must show its conduct was not unlawful under only the ACPA, not the entire Lanham Act.
A person engages in unlawful conduct under the ACPA if he (1) registers, uses, or traffics in a domain name that (2) is identical or confusingly similar to a distinctive mark, or is identical, confusingly similar to, or dilutive of a famous mark, (3) with a bad faith intent to profit from that mark. 15 U.S.C. § 1125(d)(1)(A). The ACPA sets forth factors to consider to determine bad faith. Id. § 1125(d)(1)(B)(i). These factors are not "an exclusive list." Interstellar Starship Servs., Ltd. v. Epix, Inc., 304 F.3d 936, 946-47 (9th Cir. 2002). Rather, "the most important grounds for finding bad faith are the unique circumstances of the case, which do not fit neatly into the specific factors enumerated by Congress." Id. (quotation omitted). The ACPA also contains a safe harbor provision, precluding a finding of bad faith "in any case in which the court determines that the person believed and had a reasonable grounds to believe that the use of the domain name was fair use or otherwise lawful." 15 U.S.C. § 1125(d)(1)(B)(ii).
As discussed above with respect to Ricks' motion for partial summary judgment, Ricks registered the bme.com website in March 2000, June 2005, October 2007, May 2008, and June 2008. Ricks therefore must not have acted in bad faith in any of these registrations to sustain his reverse hijacking claim. Ricks' bme.com domain name is identical to the LLC's BME mark. Consequently, to prevail on his reverse hijacking claim, Ricks would have to show that the BME mark was not distinctive or famous when he registered his domain name, and/or that he did not act in bad faith.
Ricks argues that under the ACPA, his reverse hijacking claim may succeed if he shows either that his registration or his use were not unlawful. Ricks does not attempt to defend his registration or use beyond arguing that at the time of the registrations and alleged trademark infringement, the LLC did not own the BME mark. (Pl.'s Opp'n (Doc. #95) at 22.) As discussed below, issues of fact surrounding the LLC's ownership of the mark are irrelevant for purposes of determining whether Ricks may establish his reverse hijacking claim.
1. Distinctive
A person is liable for cybersquatting only if the mark upon which the domain name allegedly infringes was "distinctive at the time of registration of the domain name." 15 U.S.C. § 1125(d)(1)(A)(ii)(I); Lahoti, 586 F.3d at 1197. Marks generally are classified in one of five categories: "(1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful." Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). Suggestive, arbitrary, and fanciful marks are inherently distinctive and thereby automatically entitled to federal trademark protection because "their intrinsic nature serves to identify a particular source of a product." Id. A descriptive mark is not automatically entitled to trademark protection, but may become protectable if the mark has acquired distinctiveness through secondary meaning. Zobmondo Entmt., LLC v. Falls Media, LLC, 602 F.3d 1108, 1113 (9th Cir. 2010) (citing 15 U.S.C. § 1052(f)).
The Court previously ruled that Ricks has not demonstrated, as a matter of law, that the BME mark is generic. The Court now further concludes that, even viewing the facts in the light most favorable to Ricks as the nonmoving party, Ricks has failed to raise a genuine issue of material fact that the BME mark is generic, for the same reasons as set forth above. The question thus becomes whether the BME mark is arbitrary, fanciful, suggestive, or descriptive.
The mark is neither arbitrary nor fanciful, as the mark is meant to be, at least in part, an acronym for BMEZine. See Lahoti, 586 F.3d at 1197 (giving examples of fanciful or arbitrary marks such as the mark Exxon for gas and Xerox for copiers). The question thus is whether the BME mark is suggestive or descriptive.
Whether a mark is suggestive or descriptive depends on the goods or services with which the mark is associated. Zobmondo, 602 F.3d at 1114. Consequently, the Court must determine the mark's classification in context, "by reference to the goods or services that it identifies." Id. (quotation omitted).
Distinguishing between suggestive and descriptive marks sometimes is a simple task. For example, "if a restaurant chain sought a trademark in a name such as `Delicious Foods,' or a taxicab company sought a trademark in the name `Reliable Cab,'" such marks would be descriptive. Lahoti, 586 F.3d at 1197. Other times, however, the line between suggestive and descriptive marks is not as easy to draw. Zobmondo, 602 F.3d at 1114.
To assist in the determination, courts generally apply two tests, the "imagination" test and the "competitors' needs" test. The primary test is the imagination test, which "asks whether imagination or a mental leap is required in order to reach a conclusion as to the nature of the product being referenced." Id. at 1115. For example, the mark "ENTREPRENEUR" for a magazine is descriptive because "an entirely unimaginative, literal-minded person would understand the significance of the reference." Id. (quotation omitted)). In contrast, the mark "ROACH MOTEL" is suggestive because an ordinary consumer would imagine "a fanciful abode for roaches in an establishment normally frequented by human [travelers]."Id. (quotation omitted). In other words, a suggestive mark "does not describe the product's features, but suggests them," while a descriptive mark describes the good's or service's qualities or characteristics. Id. at 1114 (emphasis and quotation omitted).
The competitors' needs test looks at the extent to which competitors actually need the mark in question to identify their goods or services. Id. at 1117. "If competitors have a great need to use a mark, the mark is probably descriptive; on the other hand, if the suggestion made by the mark is so remote and subtle that it is really not likely to be needed by competitive sellers to describe their goods or services[,] this tends to indicate that the mark is merely suggestive." Id. (quotation omitted). The two tests are interrelated, because the "more imagination that is required to associate a mark with a product or service, the less likely the words used will be needed by competitors to describe their products or services." Id. (quotation omitted).
Using the imagination test, the Court concludes the consumer needs to use little to no imagination to determine the nature of the product or services the LLC offers under the BME mark when considered in context of the LLC's actual website. The consumer must make the mental leap from the acronym BME to the name of the business, BMEzine, or Body Modification Ezine. But no further leap is required. While Shannon Larratt expressed a further meaning in the BME mark to include "Be Me," the play on the acronym's potential dual meaning does not, by itself, render the mark suggestive rather than descriptive.
The competitors' needs test is less helpful in this situation largely because the parties have produced no evidence that a single competitor describes itself as a body modification ezine. Thus, it is unclear whether the LLC has any direct competitors. Presuming some form of competition exists in terms of web sites or online communities which provide information on body modification, including photo sharing and an interactive community, there is no evidence that any such competitor has a great need to use the BME mark, either as an acronym or the words "body modification ezine." While a competitor likely would need to use the words "body modification" to describe the content of its products or services, it is not clear that a competitor would need to use the term "ezine." The fact that the parties have presented no evidence that a competitor in fact has needed to describe itself by reference to the mark's terms suggests that no need exists. However, that lack of use may be indicative of a lack of competition, rather than a lack of need to use the mark if actual competitors existed.
Because the imagination test is the primary test, the Court concludes that the BME mark, in the context of a mark for Body Modification Ezine, is descriptive, not suggestive. Consequently, the mark is entitled to trademark protection only if it has acquired a secondary meaning.
A descriptive mark may be distinctive, and thus entitled to trademark protection, if it "has become distinctive of the applicant's goods in commerce." 15 U.S.C. §§ 1052(e), (f). Acquired distinctiveness is known as "`secondary meaning.'" Two Pesos, Inc., 505 U.S. at 769. A descriptive mark acquires secondary meaning when the consuming public's mind associates the mark with the producer of goods or services, rather than with the goods or services themselves.Japan Telecom, Inc. v. Japan Telecom Am. Inc., 287 F.3d 866, 873 (9th Cir. 2002). To determine whether a mark has acquired secondary meaning, the Court evaluates various factors, including:
(1) whether actual purchasers of the product bearing the claimed trademark associate the trademark with the producer, (2) the degree and manner of advertising under the claimed trademark, (3) the length and manner of use of the claimed trademark, and (4) whether use of the claimed trademark has been exclusive.
Id. (quotation omitted). A weak descriptive mark will require a stronger showing of secondary meaning.
Id. Whether a mark has acquired secondary meaning is a question of fact.
Id.
The evidence before the Court establishes that the consuming public associates the BME mark in the context of the body modification market as being associated with BMEzine as a source identifier rather than as an identifier of a class of goods. The LLC has presented evidence from Vidra, Angel, Wimberly, and Falkner that the consuming public associates "BME" as a source-identifier with BMEzine, and Ricks has presented no contrary evidence. There is no evidence regarding the degree and manner of advertising under the BME trademark beyond BMEzine's existence and use of the BME mark for many years on the various websites which use a "bme" prefix, such as bmeshop. However, as discussed previously, independent media sources outside the body modification community referred to BMEzine as "BME." The LLC has presented evidence that it or its predecessors have used the BME mark since the mid-1990s, and has licensed use of the BME mark in relation to the bmeshop website. No evidence has been presented that any entity other than BMEzine has used the BME mark in connection with body modification products or services. No genuine issue of material fact remains that the BME mark was distinctive as a descriptive mark which acquired secondary meaning before March 2000. Ricks therefore will not be able to prevail on his reverse hijacking claim by showing the BME mark was not distinctive prior to his allegedly infringing conduct.
2. Bad Faith
The statutory factors evaluating bad faith are as follows:
(I) the trademark or other intellectual property rights of the person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
(V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
(VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct;
(VII) the person's provision of material and misleading false contact information
when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;
(VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c) of this section.
15 U.S.C. § 1125(d)(1)(B)(i).
Ricks has presented no evidence that he owns a trademark or other intellectual property rights in bme.com. Ricks made no bona fide noncommercial or fair use of the bme mark or the bme.com website. Ricks originally used the domain to offer bona fide commercial services when he initially registered it in March 2000, as he used it merely to direct traffic to his motherboards.com website through which he sold computer components. However, Ricks subsequently "parked" the site, receiving pay-per-click fees during which time the site hosted links labeled, among other things, for tattoos, body piercing, body jewelry, and body modification.
Although intent usually is a fact question, the circumstances compel the conclusion that Ricks intended to divert consumers from the LLC's bmezine.com website to bme.com for commercial gain through confusing similarity in the marks and content. The bme.com domain name consists of the name the LLC commonly uses to identify itself. After Ricks converted the site to pay-per-click, the site included links to topics related to body piercing, tattooing, and body modification, and featured pictures of women with tattoos or a man giving another person a tattoo. The bme.com website contained these links and pictures to profit off of confusion by web users seeking out BMEzine based on the LLC's mark. Ricks offers no explanation for how these types of links and pictures were selected for the bme.com site, as opposed to links for some other type of service or product. Ricks was aware of some customer confusion, as he admitted receiving email through the bme.com website which sought to reach BMEzine's customer service, rather than his own website. Ricks acknowledges he viewed the BMEzine website, likely in response to this email, and thus was aware of the BMEzine website content. Ricks could have advised the parking company to change the links on bme.com but did not do so. Indeed, Ricks testified he would not do so unless and until he received a cease and desist notice. (Def.'s Exs., Ex. B at 142.)
Although Ricks argues the BME mark lacks distinctiveness, the evidence presented establishes that the mark was distinctive within the body modification community. Ricks intended to profit off of the mark's distinctiveness to the body modification audience by providing pay-per-click links associated with body modification, the very distinctiveness which he now disclaims. That bme.com's content consisted of tattoo, piercing, and body modification was no accident or coincidence. Ricks did not place other content on the site that might correspond to another meaning for the three letters "bme."
Ricks' bad faith is evident when considered in the context of Ricks' history and knowledge. Ricks previously has been found to have registered, trafficked in, or used domain names in bad faith. See, e.g., Rewe Touristik Hotels Investment GmbH v. Gee Whiz Domains Privacy Servs. Gregory Ricks, WIPO Case No. D2008-1342 (Oct. 29,
2008) (finding bad faith registration and use of lti.com);Digital Spy Ltd. v. Moniker Privacy Servs. Express Corp., WIPO Case No. D2007-0160 (Apr. 4, 2007) (finding bad faith registration of digitalspy.com); Philip Morris USA Inc. v. Domain Admin., WIPO Case No. D2005-0108 (Mar. 24, 2005) (finding bad faith registration of virginiaslims.com); Welch Foods, Inc. v. MSS, WIPO Case No. D2001-1065 (Dec. 17, 2001) (finding bad faith registration of welches.com). Ricks therefore should have been aware that his conduct in placing body modification content on the bme.com website and re-registering the site thereafter might be unlawful. Instead of altering the content to avoid possible infringement, the bme.com website became increasingly focused on body modification content. No genuine issue of material fact remains that Ricks will not be able to demonstrate his conduct was not unlawful.
The evidence on Ricks' offer to sell the bme.com website to the LLC as the mark owner is equivocal. Ricks advised Shannon Larratt the website was not for sale, and sought no funds for the domain name at that time. When Rachel Larratt sought to purchase the domain name in late 2007 and early 2008, Moniker acted as a middleman between Rachel Larratt and Ricks. No evidence demonstrates that Ricks, rather than Moniker, continuously raised the price on the domain name. Further, the evidence related to the registration information is not definitive. Ricks did not provide false or misleading registration information, but he did change that information frequently. Ricks has offered explanations for each of these changes.
The parties dispute, however, whether Ricks must show his conduct was not unlawful as to the mark owner, or whether he must show his conduct was not unlawful as to the party in whose favor the domain name was transferred in the WIPO proceeding. In most cases, the mark owner will be the party who prevailed in the WIPO proceeding. Here, however, as stated above, a genuine issue of material fact remains as to whether the LLC owned the BME mark at the time of the alleged infringing activity. Consequently, Ricks argues that because a genuine issue of fact remains as to whether his conduct was "not unlawful" as to the LLC, a genuine issue of fact remains with respect to his reverse hijacking claim.
The ACPA's text does not clearly resolve whether, to sustain a reverse domain name hijacking claim, the registrant must show his conduct was not unlawful as to the person to whom the domain name was transferred, or whether he must show his conduct was not unlawful generally. The Act requires notice of the suit to the mark owner. But as to the fourth requirement, the Act requires the registrant to show his conduct was "not unlawful," without specifying whether the registrant must make this showing as against the entity to whom the domain name was transferred, or as against the world.
Because the registrant in a reverse domain name hijacking case seeks equitable relief from the Court in the form of an injunction returning the domain name to him, he must come to the Court with clean hands. Cf. U.S. v. Kaczynski, 551 F.3d 1120, 1129 (9th Cir. 2009) (holding criminal defendant had unclean hands and could not seek return of his property even if property was not itself contraband). "This maxim is a self-imposed ordinance that closes the doors of a court of equity to one tainted with an inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been the behavior of the defendant." E.E.O.C. v. Recruit U.S.A., Inc., 939 F.2d 746, 752 (9th Cir. 1991).
Having acted in bad faith, the Court will not return the bme.com website to Ricks even though an issue of fact exists as to whether Defendant LLC owned the BME mark at the time of the alleged infringement. Ricks comes to the Court with unclean hands regardless of who actually owned the BME mark at the time of Ricks' conduct, and he therefore will not be heard to seek return of the very website he registered in bad faith.
As a matter of law, Ricks cannot establish his conduct was not unlawful under the ACPA. The Court therefore will grant Defendant LLC's motion for summary judgment on Ricks' reverse hijacking claim.
B. Fraud in Domain Dispute Proceeding
Ricks' second cause of action alleges the LLC committed fraud in the domain dispute proceeding because it instituted and maintained the proceeding when it did not yet own the rights to the BME mark. The LLC responds that it owned the rights to the mark, and even if it did not, Ricks cannot show the requisite intent to support this claim.
Under the ACPA, if a registration authority transfers, disables, or cancels a domain name "based on a knowing and material misrepresentation by any other person that a domain name is identical to, confusingly similar to, or dilutive of a mark," the domain name registrant may recover damages against the person making the misrepresentation. 15 U.S.C. § 1114(2)(D)(iv). The domain name registrant also may obtain injunctive relief, including transfer of the domain name. Id.
No genuine issue of material fact remains that Ricks will not be able to prevail on this claim. By its plain terms, the statutory section provides for a cause of action for a knowing and material misrepresentation that a domain name is identical to, confusingly similar to, or dilutive of a mark. It does not provide a cause of action for a knowing and material misrepresentation regarding ownership of that mark. Even assuming Ricks had sufficient evidence to raise an issue of fact that Rachel Larratt knowingly misrepresented the ownership of the BME mark, that is not the type of misrepresentation punishable by this section. Ricks contends the section clearly was intended to reach misrepresentations by trademark owners, but the statutory section neither limits the persons to whom it applies, nor broadens the subject matter to include misrepresentations about ownership. The plain language of § 1114(2)(D)(iv) covers misrepresentations by any person, but only misrepresentations about whether the domain name is identical to, confusingly similar to, or dilutive of a mark. The Court therefore will grant Defendant's motion for summary judgment on count two of Ricks' First Amended Complaint.
C. Fraud in Registration/Cancellation of Mark
Ricks' third claim for relief is for fraud in the registration of the BME mark. Ricks' fourth claim is for cancellation of the BME mark due to fraud in the application to obtain the mark. Ricks alleges that Rachel Larratt knowingly misrepresented the LLC's ownership in the BME mark because at the time the LLC applied to the PTO for the mark, it was embroiled in a dispute with Shannon Larratt over who owned the mark. The LLC moves for summary judgment on this claim, arguing it always has owned the BME mark, and therefore there was no fraud. The LLC also argues that even if it did not, Ricks cannot produce evidence raising an issue of fact that any such false statement was knowingly made with the requisite intent.
Pursuant to 15 U.S.C. § 1120, any person who procures PTO registration of a mark "by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof." To prove a federal trademark was procured by fraud, the plaintiff must prove:
(1) the false representation regarding a material fact; (2) the registrant's knowledge or belief that the representation is false (scienter); (3) the intention to induce action or refraining from action in reliance on the misrepresentation; (4) reasonable reliance on the misrepresentation; and (5) damages proximately resulting from such reliance.
Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 874 (10th Cir. 1995) (quotation omitted). The question is not whether the statement is factually false, but whether the applicant subjectively believed it was false at the time he or she made the representation.
Id. If this showing is made, the mark's registration may be cancelled.
15 U.S.C. § 1064(3). "[T]he burden of proving that a party fraudulently procured a trademark registration is heavy."
Robi v. Five Platters, Inc., 918 F.2d 1439, 1444 (9th Cir. 1990).
No genuine issue of material fact remains that Ricks will not be able to meet his heavy burden of showing Rachel Larratt, on behalf of the LLC, made a false representation in obtaining the BME trademark. Rachel Larratt consistently maintained her belief that the LLC owned the rights to the BMEzine business and its related intellectual property. She testified under oath that at the time she made the ownership statement in support of the PTO application, she believed the LLC owned those rights. That she and her husband disputed the ownership does not show that she knew or believed her representation that the LLC owned the mark was false. She disputed, and continues to dispute, Shannon Larratt's ownership claims. Moreover, she testified that the parties had reached a verbal settlement regarding their ownership dispute prior to the PTO application being filed. The Court therefore will grant Defendant's motion for summary judgment on counts three and four of the First Amended Complaint.
D. Request for Sanctions and Attorney's Fees
The Court will deny Defendant LLC's request for sanctions under Federal Rule of Civil Procedure 11 as Defendant has made no showing of compliance with the Rule. The Court also will deny the request for attorneys' fees under 15 U.S.C. § 1117(a). Attorneys' fees are available in exceptional cases, such as "where the acts of infringement can be characterized as malicious, fraudulent, deliberate, or willful." Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1023 (9th Cir. 2002). The case is not exceptional for the claims upon which Defendant is the prevailing party. Defendant has shown only that Ricks is not entitled to prevail on any of his claims against the LLC. Defendant has not established Ricks' conduct was malicious, fraudulent, deliberate, or willful as to Defendant LLC with respect to the claims upon which Defendant LLC has prevailed at this stage of the proceedings. The Court's ruling is without prejudice to a future request for attorneys' fees, should Defendant prevail on its claims against Ricks.
VIII. CONCLUSION
IT IS THEREFORE ORDERED that Plaintiff/CounterDefendant Gregory Ricks ("Ricks") and CounterDefendant Gee Whiz Domains, Inc.'s ("Gee Whiz") Motion for Partial Summary Judgment (Doc. #55) is hereby DENIED.
IT IS FURTHER ORDERED that Third Party Defendant Gee Whiz Domains, Inc.'s Motion for Summary Judgment (Doc. #56) is hereby DENIED.
IT IS FURTHER ORDERED that Defendant's Motion for Summary Judgment on Its Counterclaims (Doc. #57/Doc. #61) is hereby DENIED.
IT IS FURTHER ORDERED that Defendant's Motion for Summary Judgment (Doc. #59/Doc. #62) is hereby GRANTED in part and DENIED in part. The motion is granted as to counts one, two, three, and four of Plaintiff Ricks' First Amended Complaint. The motion is denied to the extent it requests sanctions or attorneys' fees.
IT IS FURTHER ORDERED that Plaintiff's Motion to Strike (Doc. #67), is hereby GRANTED in part and DENIED in part. The motion is granted as to the Walters declaration. The motion is denied in all other respects.
IT IS FURTHER ORDERED that the parties shall file the proposed joint pretrial order within thirty (30) days from the date of this Order.