Barcelona.com, Incorporated, Plaintiff-appellant, v. Excelentisimo Ayuntamiento De Barcelona, Defendant-appellee, 330 F.3d 617 (4th Cir. 2003)Annotate this Case
Decided: June 2, 2003
COPYRIGHT MATERIAL OMITTED ARGUED: Larry Zinn, San Antonio, Texas, for Appellant. Jordan Scot Weinstein, Oblon, Spivak, McClelland, Maier & Neustadt, P.C., Arlington, Virginia, for Appellee. ON BRIEF: Jonathan Hudis, Oblon, Spivak, McClelland, Maier & Neustadt, P.C., Arlington, Virginia, for Appellee.
Before WILKINSON, NIEMEYER, and MOTZ, Circuit Judges.
Reversed, vacated, and remanded by published opinion. Judge NIEMEYER wrote the opinion, in which Judge WILKINSON and Judge DIANA GRIBBON MOTZ joined.
NIEMEYER, Circuit Judge:
Barcelona.com, Inc. ("Bcom, Inc."), a Delaware corporation, commenced this action under the Anticybersquatting Consumer Protection Act against Excelentisimo Ayuntamiento de Barcelona (the City Council of Barcelona, Spain) for a declaratory judgment that Bcom, Inc.'s registration and use of the domain name
Because the district court applied Spanish law rather than United States law and based its transfer order, in part, on a counterclaim that the City Council never filed, we reverse the judgment of the district court denying Bcom, Inc. relief under the Anticybersquatting Consumer Protection Act, vacate its memorandum opinion and its order to transfer the domain name
* In 1996, Mr. Joan Nogueras Cobo ("Nogueras"), a Spanish citizen, registered the domain name
Shortly after Nogueras registered the domain name
In March 2000, about a year after Nogueras had e-mailed the Mayor, the City Council contacted Nogueras to learn more about Bcom, Inc. and its plans for the domain name
On May 3, 2000, a lawyer for the City Council sent a letter to Nogueras demanding that Nogueras transfer the domain name
A couple of days after the City Council sent its letter, Nogueras had the domain name
Upon Bcom, Inc.'s refusal to transfer
The administrative complaint was resolved by a single WIPO panelist who issued a ruling in favor of the City Council on August 4, 2000. The WIPO panelist concluded that
In accordance with the UDRP's provision that required a party aggrieved by the dispute resolution process to file any court challenge within ten business days, Bcom, Inc. commenced this action on August 18, 2000 under the provision of the Anticybersquatting Consumer Protection Act (the "ACPA") that authorizes a domain name owner to seek recovery or restoration of its domain name when a trademark owner has overstepped its authority in causing the domain name to be suspended, disabled, or transferred. See 15 U.S.C. § 1114(2) (D) (v). Bcom, Inc.'s complaint sought a declaratory judgment that its use of the name
Following a bench trial, the district court entered a memorandum opinion and an order dated February 22, 2002, denying Bcom, Inc.'s request for declaratory judgment and directing Bcom, Inc. to "transfer the domain name barcelona.com to the [City Council] forthwith." 189 F. Supp. 2d 367, 377 (E.D. Va. 2002). Although the district court concluded that the WIPO panel ruling "should be given no weight and this case must be decided based on the evidence presented before the Court," the court proceeded in essence to apply the WIPO panelist opinion as well as Spanish law. Id. at 371. The court explained that even though the City Council did not own a trademark in the name "Barcelona" alone, it owned numerous Spanish trademarks that included the word Barcelona, which could, under Spanish law as understood by the district court, be enforced against an infringing use such as
In addition to concluding that Bcom, Inc. failed to establish its claim, the court stated that it was also deciding the City Council's counterclaim for relief under 15 U.S.C. § 1125 and determined that "the Spanish trademark `Barcelona' is valid for purposes of the ACPA." Id. at 374. Applying the factors of 15 U.S.C. § 1125(2) (d) (1) (B) (i), the court found that Nogueras and his wife acted with "bad faith intent" in registering
From the district court's order of February 22, 2002, Bcom, Inc. filed this appeal.
Bcom, Inc. contends that when it "sought a declaration under 15 U.S.C. § 1114(2) (D) (v), it was entitled to have its conduct judged by U.S. trademark law, not Spanish trademark law." It argues that even if Spanish law applies, however, a party cannot, under Spanish law, "get a registration for a term that is only geographically descriptive, such as the word `Barcelona.'" Finally, it maintains that its use of the domain name was not unlawful under United States trademark law because it could not be found to have acted in bad faith under § 1125, as the district court concluded.
The City Council contends that the WIPO panelist's decision, including its reference to Spanish law, must be considered to decide this case. It argues:
[T]rial courts may consider rights in foreign trademarks which were asserted in the transfer decision under review. The [WIPO] administrative transfer proceeding itself gives the district court both subject matter and personal jurisdiction; jurisdiction is not dependent upon allegations of U.S. trademark rights. Therefore, failure to consider the basis for the administrative decision would remove the basis for jurisdiction, and require dismissal of the case. The statute language does not limit the marks considered to U.S. marks.
* * * * * *
To hold otherwise would be to strip a trademark owner of its foreign rights whenever it is haled into court by a U.S. domain name owner who has lost a UDRP administrative proceeding. Without the ability to assert their rights, foreign trademark owners would automatically lose such proceedings, creating an unintended and unjust result.
The City Council also maintains that the district court's conclusions of confusing similarity and bad faith were factually supported and justified.
In light of the City Council's argument that "failure to consider the basis for the [WIPO] decision would remove the basis for [this court's] jurisdiction," we will review first the basis for our jurisdiction and the role of the WIPO panelist's administrative decision.
Bcom, Inc.'s complaint, brought in the Eastern District of Virginia where the domain name
This court lacks jurisdiction over Defendant regarding any cause of action other than Plaintiff's challenge to the arbitrator's Order issued in the UDRP domain name arbitration proceeding.
This statement reflects the City Council's stipulation that when it filed the WIPO administrative claim in Switzerland, "the City Council agreed to be subject to the jurisdiction of `the Courts of Virginia (United States), only with respect to any challenge that may be made by the Respondent to a decision by the Administrative Panel to transfer or cancel the domain names that are [the] subject of this complaint.'" Accordingly, at least with respect to a claim brought under § 1114(2) (D) (v), the City Council agrees that the district court had personal jurisdiction over the City Council.
The district court had subject matter jurisdiction based on the fact that this case was brought under the Lanham Act, as amended by the ACPA, and that §§ 1331 and 1338 of Title 28 confer jurisdiction over such claims.
Apparently, the City Council does not dispute these jurisdictional observations as far as they go. It contends, however, that jurisdiction to hear a claim under § 1114(2) (D) (v) rests on a recognition of the WIPO proceeding and the law that the WIPO panelist applied. Although we agree with the City Council that the WIPO proceeding is relevant to a claim under § 1114(2) (D) (v), it is not jurisdictional; indeed, the WIPO panelist's decision is not even entitled to deference on the merits. A brief review of the scheme established by ICANN in adopting the UDRP and by Congress in enacting the ACPA informs our resolution of this issue.
A domain name is "any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet." 15 U.S.C. § 1127. To obtain a domain name, a would-be registrant simply makes application to a registrar (there are currently over 160), submits a fee, and agrees to the terms of the domain name registration agreement. Domain names are assigned on a first-come, first-served basis.
The agreement that accompanies the registration of a domain name specifies terms and conditions of the registration and the policies governing the registrant's continued control over the domain name, including conditions for suspension or transfer of the domain name.
It also provides a contractually mandated process, the UDRP, for resolution of disputes that might arise between domain name registrants and trademark owners. The UDRP is intended to provide a quick process for resolving domain name disputes by submitting them to authorized panels or panel members operating under rules of procedure established by ICANN and under "any rules and principles of law that [the panel] deems applicable." ICANN, Rules for Uniform Domain Name Dispute Resolution Policy, ¶ 15(a), at http:// www.icann.org/dndr/udrp/uniform-rules.htm (Oct. 24, 1999).
Because the administrative process prescribed by the UDRP is "adjudication lite" as a result of its streamlined nature and its loose rules regarding applicable law, the UDRP itself contemplates judicial intervention, which can occur before, during, or after the UDRP's dispute-resolution process is invoked. See ICANN, UDRP ¶ 3(b), at http://www.icann.org/dndr/udrp/policy.htm (Oct. 24, 1999) (stating that the registrar will cancel or transfer the domain name upon the registrar's "receipt of an order from a court or arbitral tribunal, in each case of competent jurisdiction, requiring such action"); id. at ¶ 4(k) ("The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded"); id. (providing that the registrar will stay implementation of the administrative panel's decision if the registrant commences "a lawsuit against the complainant in a jurisdiction to which the complainant has submitted" under the applicable UDRP rule of procedure). As ICANN recognized in designing the UDRP, allowing recourse to full-blown adjudication under a particular nation's law is necessary to prevent abuse of the UDRP process. See id. at ¶ 1 (defining "reverse domain name hijacking" as use of the UDRP "in bad faith to attempt to deprive a registered domain-name holder of a domain name"). Thus, when a person obtains a domain name, the person agrees, in the registration contract with the registrar, to follow the UDRP as established by ICANN.
In 1999, Congress amended the Trademark Act of 1946 (the Lanham Act) with the Anticybersquatting Consumer Protection Act (ACPA), Pub. L. No. 106-113, § 3001 et seq., 113 Stat. 1501A-545 (codified in scattered sections of 15 U.S.C.), principally for the purpose of protecting trademark owners against cyberpiracy:
The purpose of the bill is to protect consumers and American businesses, to promote the growth of online commerce, and to provide clarity in the law for trademark owners by prohibiting the bad-faith and abusive registration of distinctive marks as Internet domain names with the intent to profit from the goodwill associated with such marks — a practice commonly referred to as "cybersquatting."
S. Rep. No. 106-140, at 4 (1999). Although the ACPA was enacted primarily to redress cyberpiracy or "cybersquatting," it also provides limited liability for trademark infringement by registrars who participate in the administration of the registration, transfer, and cancellation of domain names pursuant to a "reasonable policy" that is consistent with the purposes of the trademark laws. See 15 U.S.C. § 1114(2) (D) (i)-(iii). And to balance the rights given to trademark owners against cybersquatters, the ACPA also provides some protection to domain name registrants against "overreaching trademark owners." S.Rep. No. 106-140, at 11; see also 15 U.S.C. § 1114(2) (D) (iv)-(v). Thus, § 1114(2) (D) (v) authorizes a domain name registrant to sue trademark owners for "reverse domain name hijacking."1 Under that reverse domain name hijacking provision, a domain name registrant who is aggrieved by an overreaching trademark owner may commence an action to declare that the domain name registration or use by the registrant is not unlawful under the Lanham Act. This section provides that 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." 15 U.S.C. § 1114(2) (D) (v).
In sum, domain names are issued pursuant to contractual arrangements under which the registrant agrees to a dispute resolution process, the UDRP, which is designed to resolve a large number of disputes involving domain names, but this process is not intended to interfere with or modify any "independent resolution" by a court of competent jurisdiction. Moreover, the UDRP makes no effort at unifying the law of trademarks among the nations served by the Internet. Rather, it forms part of a contractual policy developed by ICANN for use by registrars in administering the issuance and transfer of domain names. Indeed, it explicitly anticipates that judicial proceedings will continue under various nations' laws applicable to the parties.
The ACPA recognizes the UDRP only insofar as it constitutes a part of a policy followed by registrars in administering domain names, and the UDRP is relevant to actions brought under the ACPA in two contexts. First, the ACPA limits the liability of a registrar in respect to registering, transferring, disabling, or cancelling a domain name if it is done in the "implementation of a reasonable policy" (including the UDRP) that prohibits registration of a domain name "identical to, confusingly similar to, or dilutive of another's mark." 15 U.S.C. § 1114(2) (D) (ii) (II) (emphasis added). Second, the ACPA authorizes a suit by a domain name registrant whose domain name has been suspended, disabled or transferred under that reasonable policy (including the UDRP) to seek a declaration that the registrant's registration and use of the domain name involves no violation of the Lanham Act as well as an injunction returning the domain name.
Thus, while a decision by an ICANN-recognized panel might be a condition of, indeed the reason for, bringing an action under 15 U.S.C. § 1114(2) (D) (v), its recognition vel non is not jurisdictional. Jurisdiction to hear trademark matters is conferred on federal courts by 28 U.S.C. §§ 1331 and 1338, and a claim brought under the ACPA, which amended the Lanham Act, is a trademark matter over which federal courts have subject matter jurisdiction.
Moreover, any decision made by a panel under the UDRP is no more than an agreed-upon administration that is not given any deference under the ACPA. To the contrary, because a UDRP decision is susceptible of being grounded on principles foreign or hostile to American law, the ACPA authorizes reversing a panel decision if such a result is called for by application of the Lanham Act.
In sum, we conclude that we have jurisdiction over this dispute brought under the ACPA and the Lanham Act. Moreover, we give the decision of the WIPO panelist no deference in deciding this action under § 1114(2) (D) (v). See Dluhos v. Strasberg, 321 F.3d 365, 373-74 (3d Cir. 2003) (holding that 15 U.S.C. § 1114(2) (D) (v) requires the federal court to approach the issues raised in an action brought under that provision de novo rather than to apply the deferential review appropriate to actions governed by the Federal Arbitration Act); Sallen v. Corinthians Licenciamentos LTDA, 273 F.3d 14, 28 (1st Cir. 2001) (explaining that "a federal court's interpretation of the ACPA supplants a WIPO panel's interpretation of the UDRP"). Thus, for our purposes, the WIPO panelist's decision is relevant only to serve as the reason for Bcom, Inc.'s bringing an action under § 1114(2) (D) (v) to reverse the WIPO panelist's decision.
Now we turn to the principal issue raised in this appeal. Bcom, Inc. contends that in deciding its claim under § 1114(2) (D) (v), the district court erred in applying the law of Spain rather than the law of the United States. Because the ACPA explicitly requires application of the Lanham Act, not foreign law, we agree.
Section 1114(2) (D) (v), the reverse domain name hijacking provision, states:
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.
15 U.S.C. § 1114(2) (D) (v). Thus, to establish a right to relief against an "overreaching trademark owner" under this reverse hijacking provision, a plaintiff must establish (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); (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; and (4) that the plaintiff's registration or use of the domain name is not unlawful under the Lanham Act, as amended.
The parties do not dispute that the first two elements are satisfied. Bcom, Inc. is a domain name registrant, and its domain name was suspended, disabled, or transferred under Network Solutions' policy, i.e., the UDRP incorporated into the domain name registration agreement for
There also can be no dispute that Bcom, Inc. provided notice of this § 1114(2) (D) (v) action to the City Council.
It is the last element that raises the principal issue on appeal. Bcom, Inc. argues that the district court erred in deciding whether Bcom, Inc. satisfied this element by applying Spanish law and then by concluding that Bcom, Inc.'s use of the domain name violated Spanish law.
It appears from the district court's memorandum opinion that it indeed did resolve the last element by applying Spanish law. Although the district court recognized that the City Council did not have a registered trademark in the name "Barcelona" alone, either in Spain or in the United States, it observed that " [u]nder Spanish law, when trademarks consisting of two or more words contain one word that stands out in a predominant manner, that dominant word must be given decisive relevance." Barcelona.com, Inc., 189 F. Supp. 2d at 371-72. The court noted that "the term `Barcelona' has been included in many trademarks consisting of two or more words owned by the City Council of Barcelona. In most of these marks, the word `Barcelona' is clearly the dominant word which characterizes the mark." Id. at 372. These observations regarding the substance and effect of Spanish law led the court to conclude that the City Council of Barcelona "owns a legally valid Spanish trademark for the dominant word `Barcelona.'" Id. The district court then proceeded to determine whether Bcom's "use of the Barcelona trademark is `not unlawful.'" Id. In this portion of its analysis, the district court determined that there was a "confusing similarity between the barcelona.com domain name and the marks held by the Council," id., and that "the circumstances surrounding the incorporation of [Bcom, Inc.] and the actions taken by Nogueras in attempting to sell the domain name evidence [d] a bad faith intent to profit from the registration of a domain name containing the Council's mark," id. Applying Spanish trademark law in this manner, the court resolved that Bcom, Inc.'s registration and use of
It requires little discussion to demonstrate that this use of Spanish law by the district court was erroneous under the plain terms of the statute. The text of the ACPA explicitly requires application of the Lanham Act, not foreign law, to resolve an action brought under 15 U.S.C. § 1114(2) (D) (v). Specifically, it authorizes an aggrieved domain name registrant to "file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter." 15 U.S.C. § 1114(2) (D) (v) (emphasis added).2 It is thus readily apparent that the cause of action created by Congress in this portion of the ACPA requires the court adjudicating such an action to determine whether the registration or use of the domain name violates the Lanham Act. Because the statutory language has a plain and unambiguous meaning that is consistent with the statutory context and application of this language in accordance with its plain meaning provides a component of a coherent statutory scheme, our statutory analysis need proceed no further. See Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S. Ct. 843, 136 L. Ed. 2d 808 (1997) ("Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent" (quotation marks omitted)).
By requiring application of United States trademark law to this action brought in a United States court by a United States corporation involving a domain name administered by a United States registrar, 15 U.S.C. § 1114(2) (D) (v) is consistent with the fundamental doctrine of territoriality upon which our trademark law is presently based. Both the United States and Spain have long adhered to the Paris Convention for the Protection of Industrial Property. See Convention for the Protection of Industrial Property of 1883 (the "Paris Convention"), opened for signature Mar. 20, 1883, 25 Stat. 1372, as amended at Stockholm, opened for signature July 14, 1967, 21 U.S.T. 1583. Section 44 of the Lanham Act, 15 U.S.C. § 1126, incorporates the Paris Convention into United States law, but only "to provide foreign nationals with rights under United States law which are coextensive with the substantive provisions of the treaty involved." Scotch Whisky Ass'n v. Majestic Distilling Co., 958 F.2d 594, 597 (4th Cir. 1992); see also Int'l Cafe, S.A.L. v. Hard Rock Cafe Int'l (U.S.A.), Inc., 252 F.3d 1274, 1278 (11th Cir. 2001) (" [T]he rights articulated in the Paris Convention do not exceed the rights conferred by the Lanham Act"). The relevant substantive provision in this case is Article 6(3) of the Paris Convention, which implements the doctrine of territoriality by providing that " [a] mark duly registered in a country of the [Paris] Union shall be regarded as independent of marks registered in the other countries of the Union, including the country of origin." Paris Convention, supra, art. 6(3). As one distinguished commentary explains, "the Paris Convention creates nothing that even remotely resembles a `world mark' or an `international registration.' Rather, it recognizes the principle of the territoriality of trademarks [in the sense that] a mark exists only under the laws of each sovereign nation." 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 29:25 (4th ed.2002).
It follows from incorporation of the doctrine of territoriality into United States law through Section 44 of the Lanham Act that United States courts do not entertain actions seeking to enforce trademark rights that exist only under foreign law. See Person's Co., Ltd. v. Christman, 900 F.2d 1565, 1568-69 (Fed. Cir. 1990) ("The concept of territoriality is basic to trademark law; trademark rights exist in each country solely according to that country's statutory scheme"). Yet the district court's application of foreign law in this declaratory judgment action did precisely this and thereby neglected to apply United States law as required by the statute.
When we apply the Lanham Act, not Spanish law, in determining whether Bcom, Inc.'s registration and use of
For these reasons, we conclude that Bcom, Inc. established entitlement to relief under 15 U.S.C. § 1114(2) (D) (v) with respect to the domain name
After applying Spanish trademark law to deny Bcom, Inc. relief under 15 U.S.C. § 1114(2) (D) (v), the district court also proceeded to adjudicate what it described as the City Council's "counterclaim for relief under the [ACPA]." Barcelona.com, Inc., 189 F. Supp. 2d at 373 (referring to 15 U.S.C. § 1125(d) (1) (A)). The court devoted approximately half of its opinion to issues arising out of this alleged counterclaim and, in this section of its opinion, issued rulings (1) that claims may be brought under 15 U.S.C. § 1125(d) premised on the violation of foreign marks because the statute's coverage is not limited to violations of United States trademarks, id. at 373-74, (2) that Bcom acted with a bad faith intent to profit under the nine nonexclusive factors set forth in 15 U.S.C. § 1125(d) (1) (B), id. at 374-76, and (3) that
We do not reach the merits of Bcom Inc.'s appeal of the district court's rulings on these issues insofar as they relate to the "counter-claim" under § 1125 because the City Council never filed a counterclaim. The issues presented by the district court's rulings on this "counterclaim" are not before us on appeal because they were not properly before the district court ab initio.4 Accordingly, we vacate the district court's rulings on all issues arising out of this phantom counterclaim.
For the foregoing reasons, we reverse the district court's ruling that denied Bcom, Inc. relief under 15 U.S.C. § 1114(2) (D) (v); we vacate its Memorandum Opinion and Order of February 22, 2002; and we remand for further proceedings to determine and grant the appropriate relief under § 1114(2) (D) (v).
REVERSED, VACATED, AND REMANDED
If a domain-name registrant cybersquats in violation of the ACPA, he "hijacks" the domain name from a trademark owner who ordinarily would be expected to have the right to use the domain name involving his trademark. But when a trademark owner overreaches in exercising rights under the ACPA, he "reverse hijacks" the domain name from the domain-name registrant. Thus, § 1114(2) (D) (v), enacted to protect domain-name registrants against overreaching trademark owners, may be referred to as the "reverse domain name hijacking" provision
The ACPA actually provides that the registrant may sue to declare that the domain name's use by such registrant is "not unlawful under this Act." 113 Stat. 1501A-550, § 3004. "Act" is defined to refer to the Trademark Act of 1946 (the Lanham Act)Id. Upon codification, the term "this Act" became "this chapter," Chapter 22 of Title 15, which contains the Lanham Act.
Bcom, Inc. asserts that of the 100 most populous cities in the world, it could discover only one — Sydney, Australia — whose name, sydney.com, was registered to the city
Counsel for the parties agreed at oral argument that no counterclaim had been filed. We can only speculate that the district court's mistaken attribution of a counterclaim to the City Council may perhaps have rested on statements relating to the § 1125 "bad faith" factors in the City Council's Proposed Findings of Fact and Conclusions of Law