United States District Court, N.D. Texas, Dallas Division.
THE BEAR STEARNS COMPANIES INC., et al, Plaintiffs,
Nye LAVALLE, Defendant.
Oct. 27, 2003.
Michael A. Swartzendruber, Fulbright & Jaworski, Dallas, TX, for Plaintiffs.
Nye Lavalle, Atlanta, GA, pro se.
Plaintiffs The Bear Stearns Companies Inc. (“Bear Stearns”) and EMC Mortgage Corporation (“EMC”) apply for a preliminary injunction to preclude defendant Nye Lavalle (“Lavalle”) from using the domain names “thebearstearnscompanies.com,” “bearstearnscompanies.com,” or “emcmortgagecorporation.com;” and the e-mail address “TheBearStearnsCo @aol.com,” similar domain names and e-mail addresses that incorporate plaintiffs’ names or marks, and any domain name or e-mail address that is confusingly similar to plaintiffs’ names or marks. They also ask the court to enjoin Lavalle from sending e-mail messages from “TheBearStearnsCo@aol.com” and from posting web sites at “thebearstearnscompanies.com,” “bearstearnscompanies.com,” or “emcmortgagecorporation.com.” For the reasons that follow, [FN1] the court grants the application in part and denies it in part and enters a preliminary injunction by separate order filed today.
FN1. As permitted by Fed.R.Civ.P. 52(a), the court sets out in this memorandum opinion its findings of fact and conclusions of law.
Bear Stearns and EMC are financial services companies. EMC, a wholly owned subsidiary of Bear Stearns, owns and services residential mortgage loans. Lavalle is the son of Anthony and Matilde Pew, whose residential loan and deed of trust EMC purchased in 1993. EMC sought to foreclose on this property in 1994, inaugurating acrimonious litigation (“the Pew Suit”) with the Pews. Lavalle was involved extensively in the Pew Suit, at one time assuming the role of attorney-in-fact. A Texas state court ultimately ruled against the Pews.
During the Pew Suit, Lavalle harassed, threatened, and otherwise acted uncivilly toward EMC’s counsel and employees. This behavior culminated in the Texas state court’s issuing an order of contempt for violating a protective order and an order directing that Lavalle be arrested. Lavalle left Texas, however, and undertook a research and writing campaign against Bear Stearns and EMC. He produced a voluminous report detailing the alleged abuses of plaintiffs, and created Internet web sites and mass e-mails in which he asserted the same basic charge–that Bear Stearns and EMC have engaged in abusive, illegal, and immoral business practices that harm mortgagor-debtors nationwide.
During this harassment campaign, Lavalle has registered and employed domain names and e-mail addresses that incorporate plaintiffs’ names and marks, including inter alia “emcmortgagecorporation.com,” “bearstearnscompanies.com,” “thebearstearnscompanies.com,” and “TheBearStearnsCo@aol.com.” Lavalle actively uses these sites to seek litigants and lawyers to prosecute lawsuits against Bear Stearns and EMC. Lavalle has also attempted to employ his harassment campaign as leverage in unilateral “negotiations” with Bear Stearns and EMC that are aimed at forcing them to alter business practices and to settle the Pew Suit.
Bear Stearns and EMC sue Lavalle to preclude his use of their names and marks as identification for his web sites and e-mail addresses.
Before addressing the merits of plaintiffs’ application, the court considers Lavalle’s apparent challenge to the court’s personal jurisdiction over him. [FN2]
FN2. Lavalle also contends that the amount in controversy does not exceed $75,000, see D. Br. at 2, thus challenging the court’s subject matter jurisdiction. Plaintiffs invoke this court’s jurisdiction, however, based on a federal question. See Compl. ¶ 6. 28 U.S.C. § 1331, unlike § 1332 (diversity jurisdiction), does not require a minimum jurisdictional amount. Therefore, Lavalle’s challenge lacks merit.
In his opposition brief, Lavalle, who is pro se, asserts that he does not believe that he, as a resident of Georgia and not having [any more] requisite contacts in the State of Texas after Plaintiff’s fraudulent and predatory foreclosure and takeover of his family’s second residence there, should be prejudiced by having facts in this case heard in a Dallas, District Federal Court when both Plaintiffs are registered to do business and do substantial business and even have offices and counsel in Atlanta, Georgia where Defendant lives. D. Br. at 2. Because Lavalle is pro se, the court liberally consrues his pleadings, see Haines v. Kerner, 404 U.S. 519, 520-521, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), and treats this assertion as a challenge to the court’s personal jurisdiction. [FN3] Lavalle has not waived dismissal on this basis by including it in his brief in opposition to plaintiffs’ preliminary injunction application. See 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1351 (1990) (“However, a defendant may join objections to jurisdiction under Rule 12(b)(2) with a motion to dismiss for failure to state a claim or any other defenses that are assertable by motion without waiving the jurisdictional defense.”). Fed.R.Civ.P. 12(b) permits him to join this objection with “one or more other defenses or objections in a responsive pleading or motion.”
FN3. This objection may also be intended as a challenge to this court’s venue. Although Lavalle has not waived dismissal on this basis, he must adequately brief the issue by filing a brief within 20 days of the date this memorandum opinion is filed.
Although Lavalle has apparently preserved a challenge to this court’s personal jurisdiction, he has not adequately briefed the issue. He addresses neither the controlling legal authorities nor the evidence that is relevant to whether plaintiffs have established a prima facie case. Therefore, if he intends to seek dismissal for lack of personal jurisdiction, he must, within 20 days of the date this memorandum opinion is filed, file a separate brief and, if he intends to challenge the jurisdictional allegations of plaintiffs’ complaint, file his evidentiary materials in the required appendix.
The court provisionally holds that the record supports the exercise of personal jurisdiction. This ruling can be dissolved if Lavalle hereafter files, and the court grants, a motion to dismiss. Plaintiffs are not required to “establish personal jurisdiction by a preponderance of the evidence; prima facie evidence of personal jurisdiction is sufficient.” Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir.2000). Where, as here, the court decides the motion to dismiss without holding an evidentiary hearing, plaintiffs need only present sufficient facts to make out a prima facie case supporting personal jurisdiction. Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir.2000). To decide whether a prima facie case exists, the court must accept as true plaintiffs’ “uncontroverted allegations, and resolve in [their] favor all conflicts between the facts contained in the parties’ affidavits and other documentation.” Kelly, 213 F.3d at 854 (quoting Alpine View, 205 F.3d at 215); see Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 212-13 (5th Cir.1999) (holding that defendant’s evidence disputing truth of plaintiff’s jurisdictional proof could not overcome plaintiff’s prima facie case because evidence must be construed in plaintiff’s favor).
Plaintiffs allege that Lavalle used the domain names and e-mail address at issue, and sent e-mail messages to shareholders and others in Texas, with the intent to injure plaintiffs in Texas. In Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), “the Supreme Court held that when an alleged tort-feasor’s intentional actions are expressly aimed at the forum state, and the tort-feasor knows that the brunt of the injury will be felt by a particular resident in the forum, the tort-feasor must reasonably anticipate being haled into court there to answer for its tortious actions.” Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 772 (5th Cir.1988) (citing Calder, 465 U.S. at 789-790). The Fifth Circuit recently applied this principle in Wien Air, holding that “even a single act” directed toward a forum state that gives rise to a cause of action “can support a finding of minimum contacts.” Wien Air, 195 F.3d at 211. The court will likely find after additional briefing that Lavalle’s intentional acts aimed at Texas are sufficient for the court to exercise personal jurisdiction over him. Accordingly, the court holds that it has personal jurisdiction to issue a preliminary injunction.
To obtain a preliminary injunction, plaintiffs must establish (1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable injury if the injunction is not issued; (3) that the threatened injury outweighs any damage the order might cause to the defendant; and (4) that the injunction will not disserve the public interest. Ruscitto v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 777 F.Supp. 1349, 1353 (N.D.Tex.) (Fitzwater, J.) (citing Canal Auth. of State of Fla. v. Callaway, 489 F.2d 567, 572 (5th Cir.1974)), aff’d, 948 F.2d 1286 (5th Cir.1991) (per curiam) (table)).
Plaintiffs first seek relief under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), which provides, in pertinent part:
- A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person
- (i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and
- (ii) registers, traffics in, or uses a domain name that–
- (I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;
- (II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or
- (III) is a trademark, word, or name protected by reason of section 706 of Title 18 or section 220506 of Title 36.
15 U.S.C. § 1125(d)(1)(A) (Supp.2000). The court holds that plaintiffs have demonstrated a likelihood of success on the merits of this claim. [FN4]
FN4. It does not appear that Bear Stearns seeks to enjoin Lavalle from using the e-mail address “TheBearStearnsCo@aol.com” based on the ACPA. To the extent that it does, the court denies relief on this basis. The ACPA applies to certain domain names. See 15 U.S.C. § 1125(d)(1)(A)(ii). 15 U.S.C. § 1127 provides that the term “domain name” means 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 (Supp.2000). Bear Stearns has not adduced evidence that demonstrates that the “TheBearStearnsCo@aol.com” e-mail address qualifies under this definition as a “domain name.”
Plaintiffs have proved that they own the marks “Bear Stearns” and “EMC.” They have also established that the marks are protectable.
15 U.S.C. § 1127 defines a “mark” as “any trademark, service mark, collective mark, or certification mark.” The statute provides that
- [t]he term “trademark” includes any word, name, symbol, or device, or any combination thereof–
- (1) used by a person, or
- (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.
Section 1127 defines “service mark” to mean
- any word, name, symbol, or device, or any combination thereof–
- (1) used by a person, or
- (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown. Titles, character names, and other distinctive features of radio or television programs may be registered as service marks notwithstanding that they, or the programs, may advertise the goods of the sponsor.
Bear Stearns has registered its trademark name and logo on the principal register. EMC’s trademark is protected because it is distinctive and arbitrary. Cf. Two Pesos v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (holding that standards for determining whether unregistered trademark is entitled to protection parallel standards for determining whether trademark is capable of being registered in principal register).
“Marks are often classified in categories of generally increasing distinctiveness.” Two Pesos, 505 U.S. at 768. “Marks are categorized as generic, descriptive, suggestive, or arbitrary or fanciful.” Lawfinders Assocs., Inc. v. Legal Research Ctr., 65 F.Supp.2d 414, 425 (N.D.Tex.1998) (Fitzwater, J.) (citing Union Nat’l Bank of Tex., Laredo, Tex. v. Union Nat’l Bank of Tex., Austin, Tex., 909 F.2d 839, 844 (5th Cir.1990)), aff’d, 193 F.3d 517 (5th Cir.1999) (per curiam) (table). “Fanciful and arbitrary marks are the strongest types of marks.” Id. (citing Little Caesar Enters., Inc. v. Pizza Caesar, Inc., 834 F.2d 568, 571 (6th Cir.1987)); Minturn Adver., Inc. v. Hermsen Design Assocs., Inc., 728 F.Supp. 430, 432 (N.D.Tex.1990) (Fitzwater, J.)). “[A]rbitrary and fanciful terms or phrases are those which are either coined words or words which are not suggestive of the product or service.” Id. at 426 (quoting Union Nat’l Bank, 909 F.2d at 845). “The marks ‘Kodak’ and ‘Xerox’ are such marks.” Id. (quoting Minturn Adver., 728 F.Supp. at 432). “A ‘fanciful’ mark is a combination of letters or other symbols signifying nothing other than the product or service to which the mark has been assigned….” Id. (quoting Worthington Foods, Inc. v. Kellogg Co., 732 F.Supp. 1417, 1433 (S.D.Ohio 1990)). “Arbitrary ‘refers to ordinary words which do not suggest or describe the services involved.” ‘ Id. (quoting Union Nat’l Bank, 909 F.2d at 845). “The greatest protection extends to marks that are purely arbitrary or fanciful and bear no relation to the products or services sold under the mark.” Id. (quoting Minturn Adver., 728 F.Supp. at 432).
“Bear Stearns” and “EMC” are trademarks and/or service marks that qualify as “marks” under the ACPA. “Bear Stearns” and “EMC” are distinctive because they are arbitrary marks that do not of themselves indicate anything about the products and services they denote. Cf. EMC Corp. v. Hewlett-Packard Co., 59 F.Supp.2d 147, 152 (D.Mass.1999) (holding that another EMC Corp.’s trademark EMC symbol was protected from infringement in the computer industry).
Bear Stearns and EMC have established that Lavalle acted with bad faith intent to profit from their marks. Lavalle registered, and presently uses, the domain names “thebearstearnscompanies.com,” “bearstearnscompanies.com,” and “emcmortgagecorporation.com,” in addition to other names he derived from plaintiffs’ corporate identities.
The ACPA set outs nine non-exclusive factors that a court may consider “[i]n determining whether a person has a bad faith intent[.]” 15 U.S.C. § 1125(d)(1)(B)(i). These are:
- (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)(1) of this section.
15 U.S.C. § 1125(d)(1)(B)(i)(I)-(IX) (Supp.2000). The first four components address accidental or innocent conduct that may technically infringe upon the trademark or other intellectual property rights of a person. Lavalle’s conduct does not come within any of these. He has no trademark or other intellectual property rights of his own in the domain names at issue. Nor are his web sites variations on his own legal name. Lavalle has not used them in a bona fide offering of goods or services. His misuse of Bear Stearns’ and EMC’s domain names relates to the names themselves, not to any fair use within his web sites.
Although Lavalle is permitted to use a web site to criticize Bear Stearns, see Bally Total Fitness Holding Corp. v. Faber, 29 F.Supp.2d 1161, 1165 (C.D.Cal.1998), he may not do so by using a domain name that is deceptive, confusingly similar, or identical to those whom he is criticizing, see Morrison & Foerster v. Wick, 94 F.Supp.2d 1125, 1131 (D.Colo.2000). This is so because, “even if users will easily realize, upon reaching defendants’ web site, that it is only a parody, the use of plaintiff’s mark as the site’s domain name … creates initial interest confusion.” OBH, Inc. v. Spotlight Magazine, Inc., 86 F.Supp.2d 176, 191 (W.D.N.Y.2000). This type of trademark infringement is particularly problematic on the World Wide Web because a common way to locate a company’s web site is to type in an acceptable version of the corporate name followed by the suffix “.com.” See Sporty’s Farm v. Sportsman’s Mkt., 202 F.3d 489, 493 (2d Cir.2000).
The conduct complained of in Morrison & Foerster is similar to Lavalle’s. In Morrison & Foerster the defendant criticized lawyers and law firms via web sites that consisted of variations on the name “Morrison & Foerster.” Morrison & Foerster, 94 F.Supp .2d at 1131. The defendant argued that because he was only ridiculing the firm and law practice generally, his activities constituted statutorily and constitutionally protected fair use of the trademark. The court rejected this argument, concluding that use of the domain name created a likelihood of initial interest confusion. Id. Lavalle’s use of Bear Stearns’ and EMC’s names is not a bona fide noncommercial or fair use of their protected trademarks and is therefore not protected.
Lavalle maintains that even if his uses of the names constitute bad faith, they are noncommercial attempts to expose plaintiffs’ misdeeds and are not efforts at “profit.” He argues that the statutory factors at most indicate an amorphous “bad faith intent,” but that the ACPA only reaches bad faith intent, coupled with an intent to profit financially. The court disagrees.
Section 1125(d)(1)(A)(i) provides that a person who “has a bad faith intent to profit from [a] mark” shall be liable. This court must interpret the statute according to the plain meaning of its words. See United States v. Ron Pair Enters., 489 U.S. 235, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). “When a statute does not define its terms, we employ the ordinary meaning of the words.” In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 983 (9th Cir.1999) (defining words by examining dictionary definitions). The dictionary defines profit as “[a]n advantageous gain or return: benefit.” Webster’s II New Riverside University Dictionary at 939. Profit need not be pecuniary to come within the ACPA, provided the person has a bad faith intent to benefit in some way from his registration, trafficking in, or use of the plaintiff’s domain name. This interpretation is corroborated by one of the factors included in § 1125(d)(1)(B)(i) for assessing bad faith intent, which unquestionably includes a non-monetary motive as a basis for finding such intent. Section 1125(d)(1)(B)(i)(V) considers “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 …” (emphasis added).
In any event, Lavalle’s premise that he is not extorting or blackmailing plaintiffs is not entirely accurate. Lavalle has threatened to publish on the Internet and through other channels information he considers harmful, unless officers of Bear Stearns and EMC meet with him to negotiate his demands. Lavalle states that, in exchange for a charitable donation in his name or payment of $35.00 per domain name, he will “transfer” to plaintiffs any domain name determined to be confusingly similar. Plaintiffs are protected by the ACPA from Lavalle’s efforts to leverage his ownership of plaintiffs’ domain names to accomplish his goals of exposing the company’s allegedly fraudulent practices. Cf. People for the Ethical Treatment of Animals, Inc. v. Doughney, 2000 WL 943353, at *4 (E.D.Va.2000) (holding that nonprofit organization could prohibit individual from using trademark acronym as domain name for misleading and disparaging web site).
Bear Stearns and EMC have proved that Lavalle has registered and is using the domain names “thebearstearnscompanies.com,” “bearstearnscompanies.com,” and “emcmortgagecorporation.com.”
Plaintiffs have established that Lavalle is using domain names that are confusingly similar to plaintiffs’ names, and that the marks were distinctive at the time Lavalle registered the domain names.
Lavalle has registered and is using names that are identical or confusingly similar to Bear Stearns’ and EMC’s protected trademarks. To determine whether a domain name is identical or confusingly similar to a trademark, the court must make a “direct comparison between the protected mark and the domain name itself,” rather than an assessment of the context in which each is used or the content of the offending web site. Northern Light Technology, Inc. v. Northern Lights Club, 97 F.Supp.2d 96, 117 (D.Mass.2000). The domain names at issue–”thebearstearnscompanies.com,” “bearstearnscompanies.com,” and “emcmortgagecorporation.com”–consist of plaintiffs’ trademark names in full and therefore are not only confusingly similar to plaintiffs’ trademarks, they are identical to them, and thus easily meet this component of the statutory test. See, e.g., Sporty’s, 202 F.3d at 497-498 (holding that “Sporty’s” and “sporty’s.com” were confusingly similar); Northern Light, 97 F.Supp.2d at 118 (finding “Northern Light” and “northernlights.com” to be confusingly similar).
Plaintiffs have also shown that their marks were distinctive at the time Lavalle registered the domain names at issue.
A mark is distinctive if it is inherently distinctive or has acquired a secondary meaning. Northern Light, 97 F.Supp.2d at 116. “Distinctiveness refers to the inherent qualities of a mark and is a completely different concept from fame. A mark may be distinctive before it has been used–when its fame is nonexistent.” Sporty’s, 202 F.3d at 497. There is a presumption that Bear Stearns’ registered trademark is inherently distinctive. Id. Concerning the “EMC Mortgage” mark, for which registration is pending, EMC is required to demonstrate its rights in “EMC Mortgage.”
The court has already explained supra at § IV(A) why “Bear Stearns” and “EMC” are distinctive marks and adopts that analysis here.
The court now considers whether Bear Stearns is entitled under the Lanham Act to enjoin Lavalle from using the e-mail address “TheBearStearnsCo@aol.com.” Because Bear Stearns relies on the civil action provision of 15 U.S.C. § 1114(1)(a), which applies to “use in commerce” of a mark “in connection with the sale, offering for sale, distribution, or advertising of any goods or services,” Bear Stearns must satisfy these statutory requirements, as well as the merits elements. The court holds that Bear Stearns cannot show that Lavalle’s use of the “TheBearStearnsCo@aol.com” e-mail address is “in connection with the sale, offering for sale, distribution, or advertising of any goods or services,” and therefore need not reach the other components of the claim. [FN5]
FN5. Lavalle’s conduct in using the Internet to send e-mails across state lines meets the “in commerce” requirement of the Lanham Act. See Intermatic, Inc. v. Toeppen, 947 F.Supp. 1227, 1239-40 (N.D.Ill.1996) (holding use of Internet itself, because of its “worldwide nature,” sufficient to meet “in commerce” requirement); see also Cyberspace Communications, Inc. v. Engler, 55 F.Supp.2d 737, 744 (E.D.Mich.1999) (“the Internet is by nature an instrument of interstate commerce”); American Libraries Ass’n v. Pataki, 969 F.Supp. 160, 171 (S.D.N.Y.1997) (same).
Lavalle contends that Bear Stearns cannot satisfy this requirement because his sole motivation is the noncommercial desire to expose plaintiffs’ allegedly abusive and fraudulent practices. Bear Stearns maintains principally that Lavalle’s actions adversely affect its ability to offer its own goods and services by confusing customers as to the source of his e-mails and opinions.
The court disagrees with the assertion that an effect on the sale or distribution of Bear Stearns’ goods or services is sufficient. The requirement that use of the mark be “in connection with the sale, offering for sale, distribution, or advertising of any goods or services” modifies the restriction of the statute to “[a]ny person who shall, without the consent of the registrant use in commerce any reproduction counterfeit, copy, or colorable imitation of a registered mark[.]” 15 U.S.C. § 1114(1)(a). The term “in connection with” refers to the relationship between the defendant’s predicate act–the use in commerce of a copy of a trademark–and another, separate act– the sale, offer for sale, distribution, or advertisement by the defendant of his own goods or services. Because Bear Stearns cannot meet this statutory requirement, the court denies its request to enjoin under the Lanham Act Lavalle’s use of the e-mail address “TheBearStearnsCo@aol.com.”
Plaintiffs have established a substantial threat of irreparable injury if the injunction is not issued. They have shown that if Lavalle is not restrained from using the domain names “thebearstearnscompanies.com,” “bearstearnscompanies.com,” or “emcmortgagecorporation.com,” they face a threat of immediate and irreparable injury to their good will and will be unable to use their own marks. They have also established that if Lavalle’s conduct is not immediately restrained, members of the public will likely be diverted from plaintiffs’ web sites to sites that Lavalle sponsors and that he intends to use to tarnish and disparage plaintiffs’ marks. Plaintiffs have proved that if Lavalle’s conduct is not immediately restrained, members of the public will be confused, mistaken, and/or deceived concerning the origin, source, affiliation, and/or endorsement of messages disparaging plaintiffs’ marks and that plaintiffs will likely suffer immediate and irreparable injury as the result of such confusion, mistakes, and/or deception.
Plaintiffs have proved that the threatened injury from not entering an injunction outweighs any damage the order might cause to Lavalle, and that the injunction will not disserve the public interest.
Lavalle has no protectable interest in using the domain names at issue. The entities with protected trademark rights in the names are entitled by law to prevent him from using and misusing the names. As the court explains below, Lavalle will not suffer harm from an injunction because there will remain to him several alternate avenues–including use of noninfringing Internet domain names–through which he can criticize Bear Stearns and EMC and solicit support from lawyers and prospective litigants.
The public has an interest in protected First Amendment expression. Although prevention of source misidentification under trademark law prevails over First Amendment free speech protection, Yankee Publishing Inc. v. News America Publishing Inc., 809 F.Supp. 267, 276 (S.D.N.Y.1992), a trademark owner does not have a complete monopoly over the use of its trademark. There is a scope of protected “fair use” of trademarks, including uses that are necessary to identify a target of lawful criticism or parody. See 15 U.S.C. § 1125(c)(4). This protection extends to domain names that incorporate trademarked names in a way that no reasonable person would mistake (even briefly) as originating from the trademark holder. See, e.g., Bally, 29 F.Supp.2d at 1167 (holding that “trademark owners may not quash unauthorized user of the mark by a person expressing a point of view.”). The injunction that the court enters today does not prohibit Lavalle from using domain names and other forms of communication that incorporate plaintiffs’ trademarks but that are unmistakably critical of plaintiffs and thus do not present a likelihood of confusion.
* * *
For the reasons set out, the court by separate order grants a preliminary injunction in favor of Bear Stearns and EMC.
Plaintiffs have applied for a preliminary injunction against defendant Nye Lavalle (“Lavalle”). For the reasons set out in a memorandum opinion filed today, the court grants the application in part as follows.
Until the court orders otherwise, Lavalle, his officers, agents, servants, employees, and attorneys, and all those in active concert or participation with him who receive actual notice of this order by personal service or otherwise, are hereby enjoined
1. from using the domain names “thebearstearnscompanies.com,” “bearstearnscompanies.com,” or “emcmortgagecorporation.com,” any domain name that incorporates plaintiffs’ names or marks, and any domain name that is confusingly similar to plaintiffs’ names or marks; and
2. from posting web sites at “thebearstearnscompanies.com,” “bearstearnscompanies.com,” or “emcmortgagecorporation.com.”
Nothing in this injunction prevents Lavalle from registering, trafficking in, or using a domain name, e-mail address, or other form of communication that incorporates plaintiffs’ names or marks but that is unmistakably critical of plaintiffs and thus does not present a likelihood of confusion.
The bond that plaintiffs have previously posted in the amount of $5,000 is deemed sufficient security to support the entry of this preliminary injunction.
Filed under: Cybersquatting Cases