WebQuest.com Inc. v. Hayward Industries, No. 1:2010cv00306 - Document 47 (E.D. Cal. 2010)
Court Description: MEMORANDUM DECISION Regarding Motion For Judgment on the Pleadings 25 ; Motion to Dismiss Counterclaim 30 ; and Motion for Sanctions 29 ; signed by Judge Oliver W. Wanger on 11/8/2010. (Defendant shall lodge a formal order consistent with this decision within five (5) days following electronic service of this decision by the clerk. Plaintiff shall file an amendedcomplaint within fifteen (15) days of the filing of the order.Defendant shall file a response within fifteen (15) days ofreceipt of the amended complaint.) (Gaumnitz, R)
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WebQuest.com Inc. v. Hayward Industries Doc. 47 1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 8 WEBQUEST.COM, INC., 1:10-cv-00306-OWW-JLT Plaintiff, 9 10 MEMORANDUM DECISION REGARDING MOTION FOR JUDGMENT ON THE PLEADINGS (Doc. 25); MOTION TO DISMISS COUNTERCLAIM (Doc. 30); AND MOTION FOR SANCTIONS (Doc. 29) v. 11 HAYWARD INDUSTRIES, INC., 12 Defendant. 13 I. INTRODUCTION. 14 WebQuest.com, Inc., (“Plaintiff”) proceeds with this action 15 16 for declaratory relief 17 (“Defendant”) arising out of a domain name dispute. 18 2010, Defendant filed a counterclaim against Plaintiff. (Doc. 10). 19 Defendant filed a motion for judgment on the pleadings on June (Doc. 20). against Hayward Industries, Inc. On April 26, 20 29, 2010. Plaintiff filed opposition to Defendant’s 21 motion for judgment on August 30, 2010. 22 2010, Plaintiff filed a motion for sanctions in connection with 23 Defendants motion for judgment on the pleadings. 24 Plaintiff also filed a motion to dismiss Defendant’s counterclaim. 25 (Doc. 30). (Doc. 25). On August 31, (Doc. 29). Defendant filed opposition to Plaintiff’s motion to dismiss 26 27 and motion for sanctions on October 12, 2010. (Doc. 35). 28 Defendant filed a reply to Plaintiff’s opposition to the motion for 1 Dockets.Justia.com 1 judgment on the pleadings on October 12, 2010. (Doc. 36). 2 On October 15, 2010, Plaintiff filed a reply to Defendant’s 3 opposition to the motion to dismiss and a reply to Defendant’s 4 opposition to the motion for sanctions. II. FACTUAL BACKGROUND. 5 6 (Docs. 41, 42). Plaintiff is a domain name investment company with a portfolio 7 of thousands of domain names. 8 purchased the domain name “Hayward.com” from Hayward & Associates, 9 Inc., a Georgia-based IT On or about July 31, 2006, Plaintiff company. Plaintiff had previously 10 registered the “wwwHayward.com” domain name on August 14, 2004. 11 Plaintiff alleges that at the time that Plaintiff registered the 12 Hayward domain names (“Domain Names”), it had never heard of 13 Defendant, 14 register the Domain Names with the intent to sell them to Hayward 15 Industries, and Plaintiff never offered to sell the Domain Names to 16 Hayward 17 “Hayward.com” 18 significance as a city in the Bay Area of Northern California. 19 After 20 connection 21 monetization company, Domain Sponsor, supplied the content for the 22 Hayward Sites. 23 Hayward Industries. Industries. domain registering with the Plaintiff Plaintiff name alleges because Domain of Names, pay-per-click states it it not obtained Hayward’s Plaintiff advertising. did A the geographic used them domain in name Defendant is a manufacturer and seller of pool equipment and 24 related supplies. 25 HAYWARD since February 8, 1977. 26 domain 27 “haywardnet.com” and “haywardpoolproducts.com.” 28 domain name “haywardnet.com” for the uniform resource locator names Defendant has been the owner of the trademark incorporating Hayward has registered numerous the 2 HAYWARD mark, such as Hayward uses the 1 (“URL”) of its primary company website devoted to advertising and 2 promoting the swimming pool controls, filters, heaters, pumps, 3 valves, automatic pool cleaners, and related products that the 4 company manufactures and sells. 5 Immediately after Plaintiff acquired “Hayward.com” on July 31, 6 2006, Defendant sent Plaintiff a cease and desist letter, dated 7 August 1, 2006, accusing Plaintiff of willful infringement and 8 dilution of Hayward’s trademarks, and demanding that Plaintiff 9 transfer “Hayward.com” to Defendant. By letter dated August 4, 10 2006, Plaintiff denied the allegations. In that letter, Plaintiff 11 informed 12 portfolio 13 “Hayward.com”, “CastroValley.com”, and “Pleasanton.com.” 14 August 15 correspondence from Defendant. 16 Hayward of 2006 Defendant Industries Northern to California November filed a that 3, it was geo domain 2009, Complaint the with registrant names, of a including From Plaintiff received the Intellectual World no 17 Property Organization (“WIPO”) on or about November 3, 2009. 18 Proceedings commenced on November 18, 2009, and a decision was 19 issued on January 27, 2010 ordering Plaintiff to transfer the 20 Domain Names to Defendant. III. DISCUSSION. 21 22 A. Plaintiff’s Motion to Dismiss Defendant’s Counter-Claims 23 Plaintiff seeks dismissal of Defendant’s counter-claims on the 24 grounds that Defendant violated Rule 8 of the Federal Rules of 25 Civil Procedure by attaching over one-hundred pages of exhibits to 26 its 27 exhibits attached to Defendants’ counter claim pursuant to Rule 28 12(f) of the Federal Rules of Civil Procedure. pleading. Alternatively, Plaintiff 3 moves to strike the 1 A district court has discretion to dismiss a claim due to a 2 party’s excessive attachment of unnecessary exhibits. 3 Hatch v. Reliance Ins. Co., 758 F.2d 409, 415 (9th Cir. 1985) 4 (noting that district court did not abuse discretion in dismissing 5 complaint that included over 70 pages of exhibits). 6 the voluminous exhibits attached to Defendant’s counter-claim do 7 not render the claim confusing or otherwise violative of Rule 8, 8 dismissal is not warranted. Further, Plaintiff was not prejudiced 9 by of Defendant’s attachment 10 evidentiary 11 counter-claim is DENIED. 12 value. the Plaintiff’s exhibits, motion to as See, e.g., Here, because they dismiss have no Defendant’s A district court also has discretion to strike any immaterial 13 or impertinent matter from a pleading. 14 Although documentary evidence may be incorporated into a pleading 15 pursuant to Rule 10 of the Federal Rules of Civil Procedure, 16 exhibits containing largely evidentiary material typically do not 17 fall within the purview of Rule 10. See United States v. Ritchie, 18 342 F.3d 903, 908 (9th Cir. 2003). Save for Exhibit A, all of the 19 exhibits its 20 unnecessary evidentiary materials.1 21 authenticated. 22 B. Defendant’s Motion for Judgment on the Pleadings 23 Defendant attached to Fed. R. Civ. P. 12(f). counter-claim See id. constitute The documents are not Plaintiff’s motion to strike is GRANTED. Defendant contends it is entitled to judgment on the pleadings 24 with respect to its counter-claim under 15 U.S.C. § 1125(d). In 25 order to prevail on a claim under section 1125(d), Defendant must 26 27 1 28 Although Plaintiff’s motion to strike discretion to strike these materials sua sponte. 4 is untimely, the court Fed. R. Civ. P. 12. has 1 establish that (1) Defendant is the holder of a distinctive mark 2 that is entitled to protection; (2) the domain names registered by 3 Plaintiff are identical or confusingly similar to Defendant’s mark; 4 (3) Plaintiff registered the domain names with a bad faith intent 5 to profit from them. 6 F.3d 1190, 1197 (9th Cir. 2009). 7 with a bad faith intent to profit from Defendant’s mark is a 8 factual 9 inappropriate. 10 question, Section See, e.g., Lahoti v. VeriCheck, Inc., 586 judgment 1125(d)(1)(B)(i) Because whether Plaintiff acted on the sets pleadings forth nine is typically non-exclusive 11 criteria a court may consider in assessing whether a party acted in 12 bad faith. “The first four factors are those that militate against 13 a finding of bad faith by providing some reasonable basis for why 14 a defendant might have registered the domain name of another mark 15 holder.” 16 806, 809 (6th Cir. 2004). 17 Lucas Nursery & Landscaping, Inc. v. Grosse, 359 F.3d A court may consider: (I) the trademark or other intellectual property rights of the person, if any, in the domain name; 18 19 (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; 20 21 (III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; 22 23 (IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name 24 15 U.S.C. § 1125(d)(1)(B)(i). Defendant contends that each of 25 these factors weighs in favor of finding Plaintiff acted in bad 26 faith, because Plaintiff has no trademark or other intellectual 27 property rights in the domain name, has never been known as 28 “Hayward,” had no prior use of the domain name in connection with 5 1 a bona fide offering of goods or services, and never developed the 2 website beyond placing pay-per-click advertising links on the site. 3 Defendant also contends that the fifth, sixth, eighth, and 4 ninth factors listed in section 1125(d)(1)(B)(i) also support a 5 finding of bad faith. 6 to divert customers from the mark owner's online location to a site 7 accessible under the domain name.” 8 that Plaintiff “intended” to divert customers from Defendant’s 9 website; to the contrary, the complaint alleges that Plaintiff had 10 never heard of Defendant at the time it registered the Domain 11 Names.2 12 13 14 15 16 The fifth factor concerns a persons “intent The pleadings do not establish The sixth factor set forth in section 1125(d)(2)(B)(i) states that courts may consider: 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; 17 18 15 U.S.C. § 1125(d)(1)(B)(i). Defendant correctly notes that 19 Plaintiff’s complaint alleges that it offered to sell the Domain 20 Names at a public auction. 21 The eighth factor under 1125(d)(1)(B)(i) provides that 22 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 23 24 25 26 27 2 Defendant's attempt to rely on exhibits to the counter-claim to establish that Plaintiff's website has led to confusion demonstrates the impropriety of deciding this issue at the pleading stage. Likelihood of confusion is a factual issue. Green v. Fornario, 486 F.3d 100, 106 (3rd Cir. 2007). 28 6 1 famous at the time of registration of such domain names, without regard to the goods or services of the parties 2 may evince bad faith. Id. This factor is of no help to Defendant, 3 as Plaintiff’s complaint alleges that it had never heard of 4 Defendant at the time it registered the Domain Names. 5 Finally, the ninth factor concerns “the extent to which the 6 mark incorporated in the person's domain name registration is or is 7 not distinctive and famous within the meaning of [section 8 1125(c)].” Id. Defendant argues that because it holds a trademark 9 for “HAYWARD,” the mark is presumed distinctive and thus that 10 Plaintiff’s use of the mark within the Domain Names evinces bad 11 faith. See Lahoti, 586 F.3d at 1199 (“Federal trademark 12 registration of a particular mark supports the distinctiveness of 13 that mark, because the PTO should not otherwise give it 14 protection”). However, as Lahoti makes clear, registration alone 15 is not always sufficient to establish distinctiveness. See id. 16 (“Registration alone may be sufficient in an appropriate case to 17 satisfy a determination of distinctiveness) (emphasis added). 18 Further, Defendant does not contend, and the pleadings to not 19 establish, that HAYWARD is “famous” within the meaning of section 20 1125(c). 21 Although the parties’ pleadings assert that several of the 22 factors listed in section 1125(d)(2)(B)(i) support a finding that 23 Plaintiff acted in bad faith, mechanistic application of the 24 criteria set forth in section 1125 is neither required nor 25 appropriate in a case in which a party’s intent is subject to 26 dispute. As the Fourth Circuit Court of Appeal explained in Lucas 27 Nursery, 28 7 1 The role of the reviewing court is not simply to add factors and place them in particular categories, without making some sense of what motivates the conduct at issue. The factors are given to courts as a guide, not as a substitute for careful thinking about whether the conduct at issue is motivated by a bad faith intent to profit. 2 3 4 359 F.2d at 811. Bad faith under section 1125(d) is rarely 5 discernible directly and typically must be inferred from pertinent 6 facts and circumstances. See Audi AG v. D'Amato, 469 F.3d 534 549 7 (6th Cir. 2006). Where it is unclear how well-recognized a mark 8 is, discovery is important in order to allow factual development of 9 the pertinent facts and circumstances relevant to the issue of an 10 entity’s bad faith. See Green, 486 F.3d at 107. 11 Here, Plaintiff’s motivation for registering the Domain Names 12 is subject to a factual dispute. Whether or not Defendant acted 13 with bad faith intent within the meaning of section 1125(d) 14 presents a question of fact that is not resolvable as a matter of 15 law on a motion for judgment on the pleadings. Plaintiff contends 16 that it registered the Domain Names because of the geographic 17 significance of Hayward as a city in the Bay Area of Northern 18 California. (Comp. at 7). Accepting the allegations of the 19 complaint as true, Plaintiff’s activity does not as a matter of law 20 establish the quintessential case of bad faith intent to profit 21 contemplated by section 1125. See, e.g., Utah Lighthouse Ministry 22 v. Found. for Apologetic Info. & Research, 527 F.3d 1045, 1058 23 (10th Cir. 2008) (“quintessential example of a bad faith intent to 24 profit is when a defendant purchases a domain name very similar to 25 the trademark and then offers to sell the name to the trademark 26 owner at an extortionate price...[or] intend[s] to profit by 27 diverting customers from the website of the trademark owner to the 28 8 1 defendant's own website, where those consumers would purchase the 2 defendant's 3 owner's”); Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 680 4 (9th Cir. 2005) (same); Lucas Nursery, 359 F.3d at 810 (“the 5 crucial elements of bad faith to mean an ‘intent to trade on the 6 goodwill of another's mark’”); Coca-Cola Co. v. Purdy, 382 F.3d 7 774, 8 establishing “bad faith intent to profit from [trademark holder’s] 9 mark”); see also Savin Corp. v. Savin Group, 391 F.3d 439, 460 (2nd 10 Cir. 2005)(affirming finding of no bad faith in trademark action 11 where evidence established defendant had no knowledge of trademark 12 holder’s existence at the time defendant adopted mark). 13 cites no authority for the proposition that bad faith may be found 14 despite an entity’s lack of knowledge of a trademark holder’s 15 existence. 16 C. Plaintiff’s Motion for Sanctions 779 products (8th Cir. or services 2004) instead (noting of the significance trademark of evidence Defendant 17 Plaintiff seeks sanctions against Defendant on the grounds 18 that Defendant’s motion for judgment on the pleadings violates Rule 19 11 of the Federal Rules of Civil Procedure. 20 motion for judgment borders on the frivolous, it is not so devoid 21 of 22 sanctions is DENIED. merit that it violates Rule 11. Although Defendant’s Plaintiff’s motion for ORDER 23 24 For the reasons stated, IT IS ORDERED: 25 1) Plaintiff’s motion to dismiss Defendant’s counterclaim is 26 DENIED; 27 2) Plaintiff’s motion to strike all exhibits from Defendant’s 28 counterclaim, with the exception of Exhibit A, is GRANTED; 9 1 3) Plaintiff’s motion for sanctions is DENIED; 2 4) Defendant’s motion for judgement on the pleadings is 3 DENIED; 4 5) Defendant shall lodge a formal order consistent with this 5 decision within five (5) days following electronic service of 6 this decision by the clerk. 7 complaint within fifteen (15) days of the filing of the order. 8 Defendant shall file a response within fifteen (15) days of 9 receipt of the amended complaint. Plaintiff shall file an amended 10 11 12 IT IS SO ORDERED. Dated: hkh80h November 8, 2010 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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