Just Bulbs v. Ricks
Filing
39
ORDER denying 26 MOTION for Summary Judgment , denying 33 MOTION for Summary Judgment Plaintiffs Motion for summary judgment regarding the ACPA claim is GRANTED and Defendants Motion regarding the ACPA claim is DENIED; andDefendants Motion regarding the dilution claim is GRANTED and Plaintiffs Motion is DENIED. Plaintiffs claim of dilution under Texas law is hereby DISMISSED.(Signed by Judge Melinda Harmon) Parties notified.(jdav, 4)
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BULBS 4 EAST SIDE, INC.; dba JUST
BULBS,
Plaintiffs,
VS.
GREGORY RICKS, et al,
Defendants.
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August 10, 2016
David J. Bradley, Clerk
CIVIL ACTION NO. 4:14-CV-3672
ORDER AND OPINION
Before the Court are Plaintiff’s Motion for Summary Judgment (Document No. 26),
Defendant’s Motion for Summary Judgment (Document No. 33), and the parties’ responses and
replies (Document Nos. 35, 36, 37). Having considered these filings, the facts in the record, and
the applicable law, the Court concludes that both Motions will be granted in part and denied in
part.
Background
Plaintiff Bulbs 4 East Side Inc., d/b/a Just Bulbs (“Just Bulbs” or “Plaintiff”) is a “leading
supplier of light bulbs of all shapes and sizes.” (Document No. 1 at 1). Just Bulbs1 is currently
operated by David Brooks (“Brooks”) and it “owns, and has used for more than 34 years [since
1983], the federally registered service mark JUST BULBS in connection with its retail services.”
1
Plaintiff details the history of the company and the trademark as follows:
As duly recorded with the United States Patent and Trademark Office ("USPTO"): (a) Just Bulbs Ltd.
applied for, and on April 12, 1983 received, registration for the service mark JUST BULBS (see Ex. A); (b)
Just Bulbs Ltd. merged with Superiority Inc., and provided to Superiority authorization to use JUST
BULBS, as of August 15, 1995; (c) pursuant to such authorization, by assumed name certificate dated
December 27,1995, Superiority Inc. was "doing business as" JUST BULBS; and (d) by assignment dated
October 13, 2008, Just Bulbs Ltd. assigned the registration for JUST BULBS to plaintiff, Bulbs 4 East Side
Inc. True and correct copies of the recordations at the USPTO of the foregoing merger, assumed name
certificate, and assignment documents are annexed and made Exhibit B hereto.
(Document No. 1 at 3 and Exhibit B).
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(Document No. 26 at 2, 5). Plaintiff registered and used the domain name www.justbulbs.com
(the “Domain Name”) from 1998 to 2003. Id. at 9. However, Plaintiff could not renew the
Domain Name in 2003 due to issues with its registrar, AT&T, and so let the Domain Name
expire, planning to re-purchase it the next day. Id. at 9-10. When Plaintiff attempted to repurchase the Domain Name, Plaintiff discovered that Defendant Gregory Ricks 2 (“Ricks” or
“Defendant”) had purchased it, and was using it in connection with light bulbs. Id. Under
Defendant’s ownership, entering the Domain Name takes consumers to a website that “provides
advertising and hyperlinks to other retailers selling light bulbs.” Id. Defendant is paid when
consumers click on these ads. Id. Plaintiff alleges that Defendant “is a serial cybersquatter who
has registered or purchased (that is, obtained after someone else initially registered) between
5,000 and 10,000 domain names” and that Defendant “has been a party to at least 17 federal
lawsuits (the vast majority of which resulted in his transferring the disputed domain names to the
complainant) and 20 domain name arbitrations alleging trademark infringement and
cybersquatting against him.” Id. at 2.
In its Complaint, Plaintiff details its attempts, prior to this lawsuit, to retain the domain
name. Plaintiff filed two unsuccessful complaints against Defendant with the World Intellectual
Property Organization (“WIPO”). In 2003, Plaintiff’s predecessor-in-interest3 filed the first
complaint, Superiority. Inc. d/b/a Just Bulbs v. none/Motherboards.com [controlled by Ricks],
WIPO Case No. D2003-049I (“Superiority”), “in accordance with the Uniform Domain Name
Dispute Resolution Policy (the “Policy”), approved by the Internet Corporation for Assigned
2
Plaintiff alleges that Ricks sometimes operates “under the name of businesses which hide his identity.” (Document
No. 26 at 7). For example, the Domain Name was purchased by “motherboards.com.” Id. at 10. For the sake of
clarity, the Court will refer to Defendant as “Ricks” throughout.
Plaintiff also has filed its claims against defendants “does 1 through 10,” who “cannot yet be known,” but who it
alleges are “the agents, partners, joint-ventures, co-conspirators, owners, principals, successors, and predecessors of
Ricks and are in some manner responsible or legally liable for the events, actions, transactions, and circumstances
alleged herein.” (Document No. 1 at 2). However, the motions at issue only concern Defendant Ricks.
3
Plaintiff’s predecessor-in-interest is Superiority Inc. See fn. 1 supra.
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Names and Numbers (“ICANN”).” (Document No. 1 at 3). However the WIPO panel denied the
complaint:
13. [] The panel found that plaintiff had not proven that the respondent lacked legitimate
interests in respect of the Domain Name, because although the respondent initially was
selling light bulbs, it used “Just Bulbs” in its descriptive sense and there was no evidence
that, at the time of the Domain Name registration, the respondent was aware of the
plaintiff’s JUST BULBS service mark. The panel in the Superiority case also noted that
the respondent there “evinced good faith by removing light bulb advertisements from its
site subsequent to being notified of the dispute” and commencing to advertise flower
bulbs at the website. Accordingly, the panel held, “Respondent has a legitimate interest in
using the domain name for flower bulbs.”
14. The panel in Superiority further observed that “this is not a case where Respondent is
deliberately benefitting from the use of the trademark meaning of JUST BULBS by
funneling traffic to its site,” and therefore concluded as follows: “Since Respondent has
represented that it will not resume advertising light bulbs, Respondent's use of the
domain name as a portal for customers interested in flower bulbs is sufficient to
demonstrate a legitimate interest and a bona fide use of the domain name.”
Id. at 3-4. Ten years later, in 2013, Plaintiff filed another complaint against Defendant, WIPO
Case No. D2013-1779, due to new information, including the fact that Defendant was again
using the site to advertise lightbulbs, rather than flower bulbs:
17. In the second WIPO complaint, plaintiff argued that defendant engaged in bad faith as
shown by the following:
(a) Defendant Gregory Ricks ceased using JUST BULBS for flower bulbs (a
central fact in the Superiority decision) and has been using JUST BULBS for light
bulbs (the same goods and services that are the subject of plaintiff’s registered
trademark);
(b) At the time it commenced use of the Domain Name for plaintiff’s goods,
defendant Ricks knew of plaintiff’s trademark, goods and services from having
participated in the Superiority case, but chose to use the Domain Name in
connection with goods and services identical to plaintiff’s;
(c) Defendant Ricks effectively re-registered the Domain Name because during
the pendency of the Superiority case he moved the Domain Name registration
from one privacy or proxy service (Namesecure.com) to another (Internet.bs
Corp.); and
(d) At that time, defendant Ricks repeatedly engaged, over the course of the
eleven years ensuing since the Superiority case, in similarly moving domain name
registration from one privacy or proxy service to another, as set forth in no less
than 148 WIPO UDRP cases in which he was the respondent.
18. The WIPO panel in the second case denied the complaint. It held that defendant’s
movement from one privacy/proxy service to another did not result in a “new”
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registration because the record otherwise showed that the same party maintained the
ownership of the Domain Name registration.
19, Thus, the WIPO panel limited its inquiry, pursuant to the ICANN Policy, to whether
the domain name was registered in bad faith; determined that defendant’s initial
registration of the Domain Name was not in bad faith, as set forth in the Superiority case;
and rejected plaintiff’s UDRP complaint.
20. However, the WIPO panel in the second decision held that “Respondent is now using
the Domain Name in bad faith, since today Respondent is clearly aware of Complainant's
mark [from arbitration of the Superiority case].”
Id. at 4-5. In denying the second complaint, the panel suggested that Plaintiff seek its relief
elsewhere, as it was not “the appropriate vehicle” for resolving the dispute. Id. at 5. Therefore,
Plaintiff filed this suit, alleging (1) infringement of federally registered trademarks, pursuant to
15 U.S.C. § 1114, (2) violations of Federal Trademark and Unfair Competition Law, 15 U.S.C. §
1125(a), (3) violations of the Federal Anti-Dilution Law, 15 U.S.C. § 1125(c), (4) violations of
the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), (5) injury to business
reputation or trade name under Texas Business & Commerce Code § 16.29, and (6) trademark
infringement and unfair competition under Texas common law. Id. at 9-13.
Standard of Review
Summary judgment under Federal Rule of Civil Procedure 56(c) is appropriate when,
viewing the evidence in the light most favorable to the nonmovant, the court determines that “the
pleadings, depositions, answers to interrogatories and admissions on file, together with the
affidavits, show that there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” A dispute of material fact is “genuine” if the evidence
would allow a reasonable jury to find in favor of the nonmovant. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). In a trademark case, “[a]lthough the secondary meaning of a
mark and the likelihood of confusion are ordinarily questions of fact, summary judgment may be
upheld if the summary judgment record compels the conclusion that the movant is entitled to
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judgment as a matter of law.” Bd. of Supervisors for Louisiana State Univ. Agric. & Mech. Coll.
v. Smack Apparel Co., 550 F.3d 465, 474 (5th Cir. 2008) (internal citations omitted) (hereinafter
“Smack Apparel”).
Analysis
Federal Trademark Infringement
“To recover on a claim of trademark infringement, a plaintiff must first show that the
mark is legally protectable and must then establish infringement by showing a likelihood of
confusion.” Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 329 (5th Cir. 2008).
Legally protectable mark
Plaintiff registered the Just Bulbs mark on April 12, 1983. (Document No. 1, Exhibit A at
1). This registration is “admissible in evidence” and is “prima facie evidence of the validity of
the registered mark and of the registration of the mark, of the registrant’s ownership of the mark,
and of the registrant’s exclusive right to use the registered mark in commerce on or in connection
with the goods or services specified in the registration subject to any conditions or limitations
stated therein.” 15 U.S.C. § 1115. However, Plaintiff’s registration “shall not preclude another
person from proving any legal or equitable defense or defect” in its registration. Id.
In addition to the registration of the mark, Plaintiff argues that the mark has become
incontestable pursuant to 15 U.S.C. § 1065. Section 1065 states that “the right of the owner to
use such registered mark in commerce for the goods or services on or in connection with which
such registered mark has been in continuous use for five consecutive years subsequent to the date
of such registration and is still in use in commerce, shall be incontestable.” 15 U.S.C. § 1065.
Plaintiff has demonstrated that “Just Bulbs has used the mark in connection with the services
specified in the registration (retail store service specializing in light bulbs) for more than five
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continuous years after the registration date,” pursuant to this statute. (Document No. 26 at 16-17;
Document No. 26, Exhibit A, at 5; Document No. 37-3, Section 8 & 15 Declaration).4
Defendant does not directly argue that Plaintiff’s mark is not incontestable, but
Defendant does list the affirmative defense of genericism5 in its Motion for Summary Judgment.
(Document No. 33 at 1). “It is important to note that while genericness is not on the § 33(b) list
[of exceptions to incontestability], Lanham Act § 15(4) specifically mandates that no
incontestable right shall be acquired in a generic name. Lanham Act § 15 is incorporated by
reference by the first sentence of § 33(b).” McCarthy on Trademarks and Unfair Competition §
32:149 (4th ed.) (citations omitted) (hereinafter “McCarthy”). Therefore, the Court will consider
whether the Just Bulbs mark is generic, in order to determine whether the mark is incontestable.
A generic term “refers to an entire class of products (such as ‘airplane’ or ‘computer’),
does not distinguish a product at all, and therefore receives no protection under trademark law.”
Mar. Madness Athletic Ass'n, L.L.C. v. Netfire, Inc., 310 F. Supp. 2d 786, 808 (N.D. Tex. 2003)
(citations omitted). “The test for genericness is whether the public perceives the term primarily
as the designation of the article.” Nola Spice Designs, L.L.C. v. Haydel Enterprises, Inc., 783
F.3d 527, 538 (5th Cir. 2015) (citations omitted). Clearly the term “Just Bulbs” is not generic, as
there are multiple other ways to designate a store selling primarily light bulbs. Furthermore, the
Court agrees with Plaintiff that while “bulbs” on its own could be generic, as referring to an
entire class of products, it may become a trademark when taken together with “just.” (Document
No. 26 at 30) (citing Sugar Busters, LLC v. Brennan, 177 F.3d 258, 269 n. 6 (5th Cir. 1999),
Blinded Veterans Ass’n v. Blinded Am. Veterans Found., 872 F.2d 1035, 1041 (D.C. Cir. 1989);
Service Merch. Co. v. Serv. Jewelry Stores, 737 F. Supp. 983, 999 (S.D. Tex. 1990)). Therefore
4
Defendant does not dispute that the mark has been used continuously by Plaintiff for more than five years.
Defendant merely lists this defense, but nowhere in its motions does it provide additional argument. For the sake of
thoroughness, however, the Court will briefly consider this defense.
5
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the mark “Just Bulbs” is not generic. As Plaintiff has demonstrated that the mark has been in
continuous use for five years, and Defendant makes no other objections to the incontestability of
the mark, the Court finds that the mark is incontestable. Once a mark has become incontestable
under § 1065, “the registration shall be conclusive evidence of the validity of the registered mark
and of the registration of the mark, of the registrant’s ownership of the mark, and of the
registrant’s exclusive right to use the registered mark in commerce.” 15 U.S.C. § 1115(b).
Therefore, subject to affirmative defenses, discussed below, Plaintiff has conclusively
established that it owns a legally protectable mark.
“Trademarks [] are classified into the following categories: (1) generic, (2) descriptive,
(3) suggestive, (4) arbitrary, or (5) fanciful.” Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526,
540 (5th Cir. 1998). Plaintiff’s mark “Just Bulbs” is descriptive, because it “identifies a
characteristic or quality of an article or service, such as its color, odor, function, dimensions, or
ingredients.” Id. The word “bulbs” identifies the product sold by Plaintiff, while “just” is an
adverb describing the store’s focus on only bulbs. Quantum Fitness Corp. v. Quantum LifeStyle
Centers, L.L.C., 83 F. Supp. 2d 810, 817 (S.D. Tex. 1999) (“In many cases, a descriptive term
will be an adjective such as speedy, friendly, green, menthol, or reliable.”) (internal quotations
and citations omitted). A descriptive mark “is protectible only when it has acquired a secondary
meaning in the minds of the consuming public.” Pebble Beach, 155 F.3d at 540.
The following factors are relevant to a trademark’s secondary meaning: “(1) length and
manner of use of the mark or trade dress, (2) volume of sales, (3) amount and manner of
advertising, (4) nature of use of the mark or trade dress in newspapers and magazines, (5)
consumer-survey evidence, (6) direct consumer testimony, and (7) the defendant's intent in
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copying the [trademark].” Id. at 541. Plaintiff has provided convincing evidence6 as to several of
these factors:
(1) Plaintiff has used JUST BULBS continuously since at least 1981, some 34 years ago,
advertising and garnering clients throughout the United States. Brooks7 ¶¶ 8-10, 16, Ex.
A-5, A-6;
(2) Annual sales in the last eight years, for example, have increased every year to nearly
$1.4 million, and in any event, are much greater than Defendant’s sales ($1,300).8 Brooks
¶ 14; Ex. B at 101:1-16;
(3) Over the same time period, annual advertising expenses have grown to $70,000,
totaling almost $300,000. Such advertising has been through Plaintiff’s website
(www.justbulbsnyc.com), consumer magazines like Bella, and trade magazines like
Residential Lighting, the latter of which has garnered inquiries from and sales to
customers of lighting fixture stores throughout the country. Brooks ¶¶ 13-14 and Ex. A-3,
A-4;
(4) Since opening in 1981, Just Bulbs has enjoyed unsolicited, nationwide media
coverage, including the David Letterman Show, articles in the New York Times, the New
York Daily News and New York Magazine, and a variety of trade publications. Brooks ¶
11 and Ex. A-2; []
(Document No. 26 at 17). The fact that Plaintiff has undisputedly used the mark for more than 30
years, combined with its extensive sales, advertisements, and media coverage, is sufficient to
demonstrate secondary meaning.
Plaintiff also argues that Defendant’s intent demonstrates secondary meaning:
Ricks’ intent is shown by his actual knowledge of Plaintiff’s registration since receiving
the 2003 WIPO proceeding complaint; he stopped using the Domain Name for light bulbs
during that arbitration; re-commenced use of the Domain Name for light bulbs after the
2003 WIPO proceeding; and continued using the Domain Name for light bulbs after the
2013 WIPO proceeding. Thus, Ricks intended to use www.justbulbs.com in violation of
Plaintiff’s trademark rights, despite actual knowledge of such.
6
Defendant does not specifically dispute that Plaintiff’s mark has acquired secondary meaning, nor does he dispute
this evidence.
7
This refers to the Declaration of David Brooks, Document No. 26, Exhibit A.
8
Plaintiff also cites to Dallas Cowboys Football Club, Ltd. v. Am.'s Team Properties, Inc., for the proposition that
the fact that its sales are substantially more than Defendant’s weighs in favor of secondary meaning. 616 F. Supp. 2d
622, 636 (N.D. Tex. 2009). See also Nola Spice Designs, L.L.C. v. Haydel Enterprises, Inc., 783 F.3d 527, 544 (5th
Cir. 2015) (Court noted that sales of approximately $30,500 were “low compared to the sales of products bearing
marks that we have found to have secondary meaning,” which included cases where sales consisted of “916,385
cases of Fish–Fri between 1964 and 1979” and where recent sales exceeded $93 million.) (citing Zatarains, Inc. v.
Oak Grove Smokehouse, Inc., 698 F.2d 786, 795-6 (5th Cir. 1983); Bd. of Supervisors for La. State Univ. Agric. &
Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 478 (5th Cir. 2008)).
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Id. The Court agrees with Plaintiff that after the initial WIPO proceeding, Defendant was aware
of Plaintiff’s trademark, and the fact that it related to lightbulbs. During the initial WIPO
proceeding, Defendant agreed to use his website only to sell flower bulbs, as a showing of good
faith.9 (Document No. 26, Exhibit A-7, at 7). The fact that Defendant resumed selling lightbulbs
after this, despite awareness of Plaintiff’s trademark and his own representation that he would
cease doing so, strongly suggests intentional infringement. Defendant’s claim that he “never read
the entirety of the 2003 WIPO decision” does not change this outcome. (Document No. 36 at 9).
Even if Defendant never read the final opinion, he must have known of Plaintiff’s trademark
regarding light bulbs in order to file his reply to the complaint. (Document No. 26, Exhibit A-7,
at 2). Furthermore, Defendant himself represented to the panel that he would “not resume
advertising light bulbs,” obviously demonstrating his awareness. Id. at 7. “Courts have
recognized that evidence of intentional copying shows the strong secondary meaning of [a
product] because there is no logical reason for the precise copying save an attempt to realize
upon a secondary meaning that is in existence.” Berg v. Symons, 393 F. Supp. 2d 525, 554 (S.D.
Tex. 2005) (internal quotations and citation omitted). Therefore, this factor also weighs in favor
of secondary meaning.
In addition to the incontestable status of the mark, it has also gained secondary meaning
in the eyes of the public. Am. Rice, 518 F.3d at 331 n.29 (“The Lanham Act provides for
incontestable status for descriptive marks.”). See also McCarthy § 15:35 (“If a mark has become
‘incontestable’ […] it is conclusively presumed either that the mark is nondescriptive, or if
descriptive, has acquired secondary meaning.”) (citing 15 U.S.C. § 1115(b)). Although
secondary meaning is typically a question of fact, the Court believes that Plaintiff has
9
Defendant unconvincingly claims that he never made this representation. (Document No. 36 at 9). Regardless, he
was clearly aware of Plaintiff’s mark and continued to infringe upon it.
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demonstrated that there is no genuine issue of material fact as to the secondary meaning of Just
Bulbs, due to its undisputed evidence regarding time of use, sales, advertisements and media
coverage, combined with evidence that infringement after the 2003 WIPO decision was
intentional. Smack Apparel, 550 F.3d at 474.
Likelihood of confusion
“Once a plaintiff shows ownership in a protectible trademark, he must next show that the
defendant’s use of the mark creates a likelihood of confusion in the minds of potential customers
as to the source, affiliation, or sponsorship of the product at issue.” Id. at 478 (internal citations
and quotations omitted). “Likelihood of confusion is synonymous with a probability of
confusion, which is more than a mere possibility of confusion.” Id. The Fifth Circuit uses the
following factors to determine whether a likelihood of confusion exists: “(1) strength of the
plaintiff's mark; (2) similarity of design between the marks; (3) similarity of the products; (4)
identity of retail outlets and purchasers; (5) similarity of advertising media used; (6) the
defendant’s intent; (7) actual confusion; and (8) degree of care exercised by potential
purchasers.” Am. Rice, 518 F.3d at 329 (internal citations and quotations omitted). “The absence
or presence of any one factor ordinarily is not dispositive; indeed, a finding of likelihood of
confusion need not be supported even by a majority of the ... factors.” Id.
(1) strength of the plaintiff’s mark
“Strength of a trademark is determined by two factors. The first factor considers where
the mark falls on a spectrum: ‘Marks may be classified as generic, descriptive, suggestive, or
arbitrary and fanciful .... [W]ithin this spectrum the strength of a mark, and of its protection,
increases as one moves away from generic and descriptive marks toward arbitrary marks.’” Id. at
330-31. As discussed above, Plaintiff’s mark is descriptive.
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The second factor is the standing of the mark in the marketplace. “A descriptive mark can
become distinctive [and thus strong] if over time it has developed secondary meaning, which
occurs when, in the minds of the public, the primary significance [] is to identify the source of
the product rather than the product itself.” Id. As detailed above, Plaintiff’s mark has developed
secondary meaning in the marketplace, and is incontestable. Therefore Plaintiff’s mark is strong.
Id. This factor weighs in favor of Plaintiff.
(2) similarity of design between the marks
The parties do not dispute that the terms are virtually identical. (Document No. 26 at 18;
Document No. 36 at 7). This factor falls in favor of Plaintiff.
(3) similarity of the products
Plaintiff argues that “Defendant promotes, through links to Plaintiff’s competitors and
advertisements, some of the same goods and services as Plaintiff – that is, light bulbs (although
Plaintiff also provides consulting, installation and repair services).” (Document No. 26 at 18-19).
In response, Defendant insists that he sells nothing, but merely “provides links and information
based on the plain meaning of the word bulbs.” (Document No. 36 at 7). However, Defendant
ignores the fact that many of his links are to sellers of lightbulbs, directly competing with
Plaintiff. Although Defendant does not sell the lightbulbs himself, he provides links to those who
do. This creates confusion in a consumer’s mind as to the source of the bulbs purchased via his
website; a consumer who goes to justbulbs.com “could reasonably assume that the website is
owned or operated by an agent affiliated” with Just Bulbs. In re Gharbi, No. 08-11023-CAG,
2010 WL 1544294, at *5 (Bankr. W.D. Tex. Apr. 19, 2010). This factor falls in favor of Plaintiff.
Xtreme Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 229 (5th Cir. 2009) (“The greater the
similarity between the products and services, the greater the likelihood of confusion.”).
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(4) identity of retail outlets and purchasers
Plaintiff argues that “Defendant does not appear to have any retail outlets, so the 4th digit
does not apply.” (Document No. 26 at 19). In response, Defendant argues that his lack of retail
outlets “means that this factor should be decided in Defendant’s favor as no potential customer
could possibly be confused if there are no retail outlets or purchasers.” (Document No. 36 at 8).
The Court finds that this factor is neutral. The fact that Defendant does not have retail outlets or
direct purchasers does not necessarily decrease the likelihood of confusion; Defendant would
need to show dissimilarities between retail outlets and customers to lessen the possibility of
confusion. Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 262 (5th Cir. 1980).
(5) similarity of advertising media used
Plaintiff argues that “[b]oth Just Bulbs and Ricks advertise through the internet.”
(Document No. 26 at 19). In response, Defendant states that he “does not advertise at all” and
that the “only way to find Defendant’s Domain Name is to type in the actual Domain Name into
the url of an internet Browser.” Id. However, Defendant has links to several other lightbulb
sellers on the website, thereby also advertising using the internet. The fact that Defendant is
advertising for third parties, not himself, is irrelevant. Furthermore, “simultaneous use of the
Internet as a marketing tool exacerbates the likelihood of confusion, given the fact that entering a
web site takes little effort—usually one click from a linked site or a search engine’s list; thus,
Web surfers are more likely to be confused as to the ownership of a web site than traditional
patrons of a brick-and-mortar store would be of a store’s ownership.” Audi AG v. D'Amato, 469
F.3d 534, 543-44 (6th Cir. 2006) (internal quotations and citations omitted). This factor weighs
in favor of Plaintiff.
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(6) the defendant’s intent
Plaintiff states that Ricks has demonstrated negative intent, because Ricks continues to
use the Domain Name to advertise lightbulbs, despite knowledge from the WIPO proceedings of
Plaintiff’s similar business and its trademark on the phrase Just Bulbs. (Document No. 26 at 17).
Defendant states that “Defendant had no knowledge of the Plaintiff at time of registration and no
notice of their continued disapproval of the usage until over a decade later. Registration and use
was in good faith and its only intended use has been to supply information and links based on the
plain meaning of the word bulbs.” (Document No. 36 at 8) (citing Declaration of Gregory Ricks,
¶ 13, 14).
“Proof of the defendant’s intent to benefit from the good reputation of the plaintiff's
products is not required in order to establish infringement. If such intent can be shown, however,
it may provide compelling evidence of a likelihood of confusion.” Am. Rice, 518 F.3d at 332
(citations omitted). “Direct proof of bad faith is rarely present. Nor does an inference of bad faith
necessarily arise from the junior user’s knowledge or awareness of the senior user’s trademark.
The proper focus is whether defendant had the intent to derive benefit from the reputation or
goodwill of plaintiff.” Quantum Fitness, 83 F. Supp.2d at 828.
Plaintiff focuses on Defendant’s knowledge that he is infringing upon their trademark.
The Court agrees that the first WIPO proceeding put Defendant on notice of the existence of
Plaintiff’s mark, and of the fact that using his website to sell lightbulbs would infringe upon
Plaintiff’s trademark. (Document No. 26, Exhibit A-7). However, this fact does not necessarily
demonstrate bad faith, or that Defendant intended to benefit from Plaintiff’s goodwill. Quantum
Fitness, 83 F. Supp. 2d at 828. See also Conan Properties, Inc. v. Conans Pizza, Inc., 752 F.2d
145, 151 n.2 (5th Cir. 1985) (“A showing that the defendant intended to use the allegedly
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infringing mark with knowledge of the predecessor’s mark may give rise to a presumption that
the defendant intended to cause public confusion as to the source or sponsorship of the product
or service. The same showing, however, does not give rise to a presumption that the defendant
intended to appropriate the plaintiff's goodwill from its use of the allegedly infringing mark.”)
(citations omitted).
Furthermore, “the intent of defendants in adopting (their mark) is a critical factor, since if
the mark was adopted with the intent of deriving benefit from the reputation of (the plaintiff,)
that fact alone may be sufficient to justify the inference that there is confusing similarity.” Am.
Rice, 518 F.3d at 332 (citations omitted). In this case the WIPO panel found that Defendant did
not exhibit bad faith when he first purchased the Domain Name. (Document No. 26, Exhibit A-7,
at 6-11). Therefore the Court finds that this factor does not weigh in favor of likelihood of
confusion.
(7) actual confusion
Plaintiff submits the testimony of Brooks as evidence of actual confusion. (Document
No. 26 at 19). “Brooks testified in his deposition about instances of actual confusion: potential
customers had contacted Plaintiff and complained that goods they had ordered through ‘the
website’ were defective. Brooks knew that the consumers had gone to Defendants’ Website
rather than Plaintiff’s, because Plaintiff advertises but does not sell goods through website.” Id.
at 19-20 (citing Document No. 26, Exhibit A, at ¶ 31). Defendant objects to this evidence as
“anecdotal” and states that “Defendant does not sell goods from its website [] it is therefore
impossible to confuse the two entities.” (Document No. 36 at 9).
The Court disagrees with Defendant that it would be impossible to confuse the two
entities; a consumer could have purchased a faulty product from one of Defendant’s links,
thinking that Just Bulbs sold that product. However, Brooks’ testimony does not demonstrate
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that he had any personal knowledge of actual confusion; he merely heard about confusion and
made an assumption as to its source. Without more, there is insufficient evidence to demonstrate
actual confusion. However, “[a]lthough actual confusion is the ‘best evidence’ of confusion, it ‘is
not necessary to a finding of likelihood of confusion.’” Am. Rice, 518 F.3d at 333.
(8) degree of care exercised by potential purchasers
Neither party addresses this factor. (Document No. 26 at 19-20; Document No. 36 at 9).
Therefore the Court will not consider it.
Plaintiff has demonstrated that there is a possibility of confusion between its products,
and products advertised on Defendant’s website. As discussed above, a consumer could think
that Defendant’s website is authorized or run by Plaintiff, creating confusion as to the source of
the lightbulbs. However, likelihood of confusion requires a showing of probability of confusion,
not a mere possibility. Smack Apparel, 550 F.3d at 478 (citations omitted). It is also possible that
consumers who mistakenly go to Defendant’s website would not be confused as to the source of
the lightbulbs sold there. Without conclusive evidence of Defendant’s bad faith intent, or actual
confusion, the Court is reluctant to find likelihood of confusion at this stage in the litigation.
Likelihood of confusion is usually a question of fact, and in this case is best reserved for a jury.
Id. at 474.
Defenses
Once incontestable, a mark is subject only to the following defenses or defects:
1. Fraud in obtaining the registration or the status of incontestability;
2. Abandonment;
3. Use of the mark to misrepresent source;
4. “Fair use” of the mark;
5. Limited territory defense of an intermediate junior user;
6. Prior registration of defendant;
7. Use of the mark to violate federal antitrust law; and
8. That the mark is functional; or
9. Equitable defenses such as laches, estoppel and acquiescence.
15 / 30
McCarthy § 32:149 (citing 15 U.S.C. § 1115(b)) (other citations omitted). Of these applicable
defenses, Defendant asserts the defenses of laches, statute of limitations, and the “fair descriptive
use defense.” (Document No. 33 at 4-8); (Document No. 36 at 19-24).
(1) laches
Defendant argues that laches prevents Plaintiff’s claim of infringement, because Plaintiff
has known of his website since 2003, and Plaintiff’s delay in filing suit caused prejudice to him.
(Document No. 33 at 6). This prejudice is Defendant’s inability “to recover many documents
which might have been able to show conclusively that the allegations brought by the Plaintiff
were conclusively false or which established defendant’s defenses.” Id. at 7. Furthermore, “many
of the third parties that Defendant employed over the past twelve years have gone out of business
[or] are unable to testify.” Id.
In response, Plaintiff states that Ricks was on notice of these claims due to the WIPO
arbitration decisions, and therefore “cannot assert that he was unfairly surprised by this lawsuit.”
(Document No. 37 at 9). Plaintiff also argues that Defendant does not have the “clean hands”
required to assert the defense of laches, and that Defendant has not demonstrated any undue
prejudice. (Document No. 35 at 13).
“Laches is an inexcusable delay that results in prejudice to the defendant. Laches
comprises three elements: (1) delay in asserting one’s trademark rights, (2) lack of excuse for the
delay, and (3) undue prejudice to the alleged infringer caused by the delay.” Smack Apparel, 550
F.3d at 489-90 (internal quotations and citations omitted). “A defendant who intentionally
infringes a trademark with the bad faith intent to capitalize on the markholder’s good will lacks
the clean hands necessary to assert the equitable defense.” Id. “Any acts after receiving a cease
and desist letter are at the defendant’s own risk because it is on notice of the plaintiff's objection
16 / 30
to such acts.” Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 205 (5th Cir. 1998) (citing
Conan Properties, 752 F.2d at 151-2).
Defendant has been on notice of Plaintiff’s objection to its use of the “Just Bulbs” mark
since 2003, when Plaintiff filed its first WIPO complaint. (Document No. 26, Exhibit A-7, at 1).
Defendant represented to the initial panel that he would cease using his website to advertise
lightbulbs, but resumed doing so. Id. at 7. Therefore Plaintiff filed another WIPO complaint in
2013, of which Defendant was aware, as evidenced by his email to the panel. (Document No. 26,
Exhibit A-8, at 1-2). The panel decided against Plaintiff in January 2014, and Plaintiff filed this
lawsuit in December 2014. Id. at 6.
The Court finds that the defense of laches is not appropriate here, as Defendant’s actions
after the 2003 WIPO decision were “at his own risk,” because he was aware of Plaintiff’s
objections to his website. Elvis Presley Enterprises, 141 F.3d at 205.
Also, Defendant’s arguments that Plaintiff has been delaying since 2003 are completely
inaccurate, because Plaintiff filed its first WIPO complaint almost immediately after discovering
Defendant’s website. Plaintiff then filed another complaint, after learning that Defendant had
resumed advertising lightbulbs. Therefore Plaintiff has not delayed in asserting its trademark
rights, but has repeatedly tried to curb Defendant’s infringement.
Finally, Defendant has not demonstrated that he has suffered any undue prejudice.
Plaintiff correctly notes that “Ricks does not allege what documents he allegedly cannot recover,
or which witnesses he allegedly cannot reach, let alone suggest how they would allegedly
support his defense,” nor does he provide any evidence thereof. (Document No. 35 at 12).
Unsupported allegations cannot create a genuine issue of material fact, and Defendant’s failure to
provide evidence of prejudice suffered “renders all other facts immaterial.” Celotex Corp. v.
17 / 30
Catrett, 477 U.S. 317, 323 (1986); Morris v. Covan World Wide Moving, Inc,, 144 F.3d 377, 380
(5th Cir. 1998).
As Defendant was on notice of Plaintiff’s objections to his website, and has not presented
any evidence of undue prejudice, the defense of laches is not appropriate.10
(2) statute of limitations
Defendant claims that the applicable four-year statute of limitations bars Plaintiff’s
claims, because Defendant’s actions began in 2003. (Document No. 36 at 24). In response,
Plaintiff argues that Defendant’s actions have been continuous, and were “renewed” each day
that the trademark was used without authorization. (Document No. 26 at 35). Therefore,
Plaintiff’s claims are not barred, but the statute of limitations “limits damages to those incurred
as early as four years before the lawsuit was commenced.” (Document No. 35 at 14).
“[A] Lanham Act violation is governed by the four year statute of limitations under Texas
law.” Edmark Indus. SDN. BHD. v. S. Asia Int'l (H.K.) Ltd., 89 F. Supp. 2d 840, 846 (E.D. Tex.
2000) (citing Tex. Civ. Prac. & Rem. Code § 16.004; Derrick Mfg. Corp. v. Southwestern Wire
Cloth, Inc., 934 F.Supp. 796, 805 (S.D. Tex. 1996)). The statute of limitations begins to run from
the moment that a cause of action accrues, or causes some legal injury. Horseshoe Bay Resort
Sales Co. v. Lake Lyndon B. Johnson Imp. Corp., 53 S.W.3d 799, 812 (Tex. App. 2001)
(citations omitted). However, “[a]n exception to this rule exists for continuing torts,” which
involve “wrongful conduct that is repeated over a period of time and each day creates a separate
cause of action.” Id. “Each subsequent violation is a separate event, separately actionable, which
begins anew the running of the statute of limitations.” Id. “Trademark infringement […] is a
continuous wrong, and as such gives rise to a claim for relief as long as the infringement
persists.” Two Pesos, Inc. v. Gulf Ins. Co., 901 S.W.2d 495, 500 (Tex. App. 1995).
10
Therefore the Court does not need to consider Plaintiff’s claim that Defendant has “unclean hands.”
18 / 30
In Horseshoe Bay, the Texas Court of Appeals specifically found that continued use of a
trademarked domain name constituted a continuing harm, giving “rise to a separate cause of
action each day it [was] repeated.” 53 S.W.3d at 813. Similarly, Defendant’s use of Plaintiff’s
trademark in its Domain Name is a continuing harm.11 Furthermore, Defendant’s actions
constitute a continuing harm because the links on his website “continuously changed with its
providing different links to sell light bulbs;” therefore Defendant’s argument that his website was
a “single publication” is disingenuous. (Document No. 37 at 15). Each change of the website
constitutes a separate, new harm, with its own four-year statute of limitations. This is
demonstrated particularly by Defendant’s change from advertising only flower bulbs to
advertising light bulbs again, a substantive change to the website. The statute of limitations does
not bar Plaintiff’s infringement claim, but merely limits Plaintiff’s damages to those occurring
within four years of Plaintiff filing suit on December 23, 2014. Derrick Mfg., 934 F. Supp. at
808; Ironclad, L.P. v. Poly-Am., Inc., No. CIV.A. 3:98-CV-2600P, 1999 WL 826946, at *4 (N.D.
Tex. Oct. 14, 1999).
11
The cases cited by Defendant are inapplicable or less relevant for a number of reasons. First, some of the cases
merely limit the plaintiff’s damages, but do not bar the entire action. Ironclad, L.P. v. Poly-Am., Inc., No. CIV.A.
3:98-CV-2600P, 1999 WL 826946, at *4 (N.D. Tex. Oct. 14, 1999) (limiting the plaintiff’s Lanham Act damages to
those occurring within the four-year statute of limitations); Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321,
337 (5th Cir. 2008) (limiting damages to defendant’s profits in recent years). Plaintiff is correct that in Edmark
Indus. SDN. BHD. v. S. Asia Int'l (H.K.) Ltd. the defendant had ceased its infringing conduct and was not liable for
the more recent re-distribution of the packaging by third parties. 89 F. Supp. 2d 840, 846 (E.D. Tex. 2000);
(Document No. 37 at 16). In addition, the Court was barring a common law unfair competition claim. Id.
Furthermore, in Bernardo Footwear, LLC v. Ashley Nettye, Inc., the plaintiff’s claims were closely related to timebarred breach of contract claims, and the plaintiff conceded that its Lanham Act claim arose eight to ten years
earlier. No. CIV.A. H-11-2057, 2012 WL 1076252, at *5 (S.D. Tex. Mar. 28, 2012); (Document No. 37 at 17). The
relevant portion of the decision in Bernardo Footwear also rests upon the conclusion that plaintiff should have
discovered defendant’s actions sooner; the discussion of a continuing cause of action was limited to the breach of
contract claim. Id.
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(3) “fair descriptive use”
Defendant appears to conflate two defenses here: descriptiveness and fair use. To the
extent that Defendant attempts to argue that Plaintiff’s mark is merely descriptive, that argument
is discredited above, due to the incontestability and secondary meaning of the mark. Park 'N Fly,
Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 189 (1985) (“The [Lanham] Act’s language also
refutes any conclusion that an incontestable mark may be challenged as merely descriptive.”);
Pebble Beach, 155 F.3d at 540 (A descriptive mark is protectible once it has acquired a
secondary meaning).
Defendant argues that the fair use defense applies here, because he “uses ‘just bulbs’
fairly and in good faith only to describe the goods and services it provides to users: links which
provide information regarding just bulbs.” (Document No. 36 at 19). In response, Plaintiff argues
that “the fair use defense is unavailable where the defendant uses a trademark for commercial
purposes.” (Document No. 37 at 12).
The Lanham Act provides as a defense to infringement: “That the use of the name, term,
or device charged to be an infringement is a use, otherwise than as a mark [] of a term or device
which is descriptive of and used fairly and in good faith only to describe the goods or services of
such party, or their geographic origin.” 15 U.S.C.A. § 1115(b)(4). “The ‘fair-use’ defense, in
essence, forbids a trademark registrant to appropriate a descriptive term for his exclusive use and
so prevent others from accurately describing a characteristic of their goods.” Soweco, Inc. v.
Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir. 1980). In order to demonstrate a defense of fair use,
the Defendant must be using the mark in a “nontrademark sense.” Galvotec Alloys, Inc. v. Gaus
Anodes Int'l, LLC, No. 7:13-CV-664, 2014 WL 6805458, at *12 (S.D. Tex. Dec. 2, 2014)
(“[T]he defense ‘allows [the defendant] to use a term in good faith to describe its goods or
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services, but only in actions involving descriptive terms and only when the term is used in its
descriptive sense rather than in its trademark sense.’”) (citations omitted); McCarthy § 11:46 (“It
is important to note that the only type of use which should suffice as a ‘classic fair use’ is use by
defendant in a nontrademark sense.”). “Often, an infringing trademark usage of the challenged
term is evidenced by its employment as an ‘attention-getting symbol.’” McCarthy § 11:46 (citing
Mobil Oil Corp. v. Mobile Mechanics, Inc., 192 U.S.P.Q. 744, 749 (D. Conn. 1976); Sands,
Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 24 U.S.P.Q.2d 1001, 1007 (7th Cir.
1992); Breuer Elec. Mfg. Co. v. Hoover Co., 47 Env't. Rep. Cas. 1705, 48 U.S.P.Q.2d 1705,
1998 WL 427595 (N.D. Ill. 1998)).
In this case, Defendant uses Plaintiff’s trademark to attract attention from the public,
because unwitting consumers will enter www.justbulbs.com into their web browser or search for
“just bulbs,” looking for Plaintiff’s website. Defendant benefits from this, receiving more traffic
than his website would otherwise. If Defendant truly intended only to provide “links which
provide information regarding just bulbs,” he could have used many other domain names to do
so. (Document No. 36 at 19).
Other courts have found that the use of a mark in a web address is not descriptive, but
constitutes use as a trademark, making the fair use defense inapplicable. Namer v. Broad. Bd. of
Governors, No. CIV.A. 12-2232, 2013 WL 4875087, at *4 (E.D. La. Sept. 10, 2013), citing
TCPIP Holding Co. v. Haar Commc'ns, Inc., 244 F.3d 88, 104 (2d Cir. 2001).12 See also E. & J.
Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 275 (5th Cir. 2002) (hereinafter “Gallo
12
The Court explained that,
Haar [the alleged infringer] uses the name “thechildrensplace.com” as the address, or name, of its website,
and has similarly reserved all the other names in contention. This is not simply an adjectival use, as might
be the case if Haar named his website otherwise, but referred to it in publicity materials as “a children's
place.” Haar's use is as a mark. It therefore cannot qualify for the protection of 15 U.S.C. § 1115(b)(4).
TCPIP Holding Co. v. Haar Commc'ns, Inc., 244 F.3d 88, 104 (2d Cir. 2001).
21 / 30
Winery”) (In finding that the defendant’s use of the domain name was commercial, and thus not
fair use under the ACPA, the Court noted, “[f]urther, at least two other courts have found that
when a defendant registers a domain name that is identical to someone else’s trademarked name
and thereby impacts the trademark owner’s business by preventing internet users from reaching
the trademark owner’s own web site, this [] impacts the trademark owner’s business and is a use
‘in connection’ with goods and services.”) (citing People for the Ethical Treatment of Animals v.
Doughney, 113 F. Supp. 2d 915, 919 (E.D. Va. 2000), aff’d 263 F.3d 359 (4th Cir. 2001);
Planned Parenthood Federation of America, Inc. v. Bucci, 42 U.S.P.Q.2d 1430, 1435 (S.D.N.Y.
1997)). Because Defendant is using the Domain Name as a trademark, rather than merely
descriptively, the fair use defense does not apply.
Conclusion
Plaintiff has demonstrated as a matter of law that Just Bulbs is a protectable mark, which
is incontestable and has acquired secondary meaning in the eyes of the public. Furthermore, each
of the defenses raised by Defendant is inapplicable in this case. However, a genuine issue of
material fact remains as to the likelihood of confusion between Plaintiff’s company and
Defendant’s website. Therefore both parties’ motions for summary judgment as to trademark
infringement are denied.
Cybersquatting
Plaintiff argues that Defendant has violated § 1125(d)(1)(A) of the Anti-Cybersquatting
Piracy Act (the “ACPA”). The ACPA states that:
(1)(A) 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-22 / 30
(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;
15 U.S.C.A. § 1125 (West). “To prevail on the merits of an ACPA claim, [a plaintiff] must show
that 1) its mark is a distinctive or famous mark entitled to protection; 2) [defendant’s] domain
names are identical or confusingly similar to [the plaintiff’s] mark; and 3) [defendant] registered
the domain names with the bad faith intent to profit from them.” Texas Int'l Prop. Associates v.
Hoerbiger Holding AG, 624 F. Supp. 2d 582, 587 (N.D. Tex. 2009) (internal quotations and
citations omitted).
As discussed above, “Just Bulbs” is a distinctive mark entitled to protection; it has
incontestable status and has gained secondary meaning. Therefore the first prong is met. Id.
Regarding the second element, Defendant does not contest that the Domain Name is identical to
Plaintiff’s trademark.
Finally, Plaintiff must demonstrate that Defendant “registered the domain names with the
bad faith intent to profit from them.” Id. “[A] court may consider nine non-exclusive factors
when determining whether a defendant had a bad faith intent to profit.” Id. at 588-589 (citing
TMI, Inc. v. Maxwell, 368 F.3d 433, 436 (5th Cir. 2004)). The factors 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
23 / 30
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.
Id. at 589 (citing 15 U.S.C. § 1125(d)(1)(B)(i)). The Court will consider each factor in turn.
(I)
Plaintiff has a trademark in “Just Bulbs” which is registered, incontestable, and has
attained secondary meaning. (Document No. 26 at 25). Defendant has no intellectual property
rights in the name “Just Bulbs.” This factor weighs in favor of Plaintiff.
(II)
Plaintiff states that “‘Just Bulbs’ does not identify Ricks,” which Defendant does not
contest. (Document No. 26 at 25; Document No. 36 at 13-15). This factor weighs in favor of
Plaintiff.
(III)
Plaintiff states that “Ricks did not sell light bulbs before using the Domain Name,” which
Defendant does not contest. Id. This factor weighs in favor of Plaintiff.
24 / 30
(IV)
As discussed above, Ricks did not engage in bona fide non-commercial or fair use of the
mark. This factor weighs in favor of Plaintiff. Texas Int'l Prop., 624 F. Supp. 2d at 591 (fair use
defense did not apply where defendant was using a domain name to provide advertising links for
products associated with the plaintiff’s mark). See also Gallo Winery, 286 F.3d at 275.
(V)
Plaintiff states that “Ricks’ [intent] is demonstrated by his knowing and continuing
violation of Just Bulbs’ trademark rights.” (Document No. 26 at 25). In response, Defendant
states that he “has no intent to divert customers from the Plaintiff’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.” (Document
No. 36 at 14). Defendant also adds that he “had no knowledge of the plaintiff at time of
registration and is not in violation of any rights because of its fair use.” Id.
Currently Defendant is intentionally infringing upon Plaintiff’s mark. Emerald City
Mgmt., LLC v. Kahn, No. 4:14-CV-358, 2016 WL 98751, at *14 (E.D. Tex. Jan. 8, 2016)
(“Evidence of bad faith may arise well after registration of the domain name.”) (citing DSPT
Int'l, Inc. v. Nahum, 624 F.3d 1213, 1220 (9th Cir. 2010)). His awareness of Plaintiff’s mark and
its relationship to lightbulbs strongly suggests that he is attempting 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, […] for commercial gain.” 15 U.S.C. § 1125(d)(1)(B)(i).
Defendant’s claims that this is not his intent are self-serving, and are unconvincing to the Court.
25 / 30
However, the Court cannot make credibility determinations on summary judgment, and therefore
finds that this factor is neutral. Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir. 2009).
(VI)
Plaintiff states that “Ricks has engaged in a pattern of selling domain names without
using, or intending to use, the domain names for bona fide offering of any goods or services.”
(Document No. 26 at 25). In response, Defendant states that he “has never offered to transfer,
sell, or otherwise assign the Domain Name directly to Plaintiff or any third party for financial
gain.” (Document No. 36 at 14).13
Defendant’s claim that he has not tried to sell this Domain Name to Plaintiff would
typically weigh in his favor.14 However, the fact that Defendant is “using the name for another
source of monetary gain-- generating click-through advertising revenue” weighs against him.
Texas Int'l Prop., 624 F. Supp. 2d at 590. See also Emerald City, 2016 WL 98751, at *14
(“Courts have found bad faith intent to profit from a domain name even where the holder did not
make an offer to sell the domain name.”) (citing Basile Baumann Prost Cole & Assocs., Inc. v.
BBP & Assocs. LLC, 875 F. Supp. 2d 511, 517 (D. Md. 2012)). Furthermore, the fact that he has
offered other domain names for sale (and currently makes more money selling domains than
from ads) suggests bad faith. Gallo Winery, 286 F.3d at 276; (Document No. 26, Exhibit B at
22:14-19, 23:20-25).
13
Plaintiff asks that this claim be stricken from the record, because such evidence violates Federal Rule of Evidence
408. (Document No. 37 at 2). However Defendant’s claim refers to a lack of a settlement offer. Furthermore, the
Court is considering Defendant’s statement as relevant to his bad faith under the ACPA, not “to prove or disprove
the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction.” Fed.
R. Evid. 408; Zinner v. Olenych, 108 F. Supp. 3d 369, 391 (E.D. Va. 2015). But see Fairbanks Capital Corp. v.
Kenney, 303 F. Supp. 2d 583, 594 (D. Md. 2003).
Plaintiff also asks that other portions of Defendant’s Memorandum be stricken from the record. (Document No. 37
at 2). However, as those sections are not relevant, the Court will not rule on those requests.
14
Interestingly, Plaintiff does not bring up the fact that, at one point, there was a button on the website where one
could make offers to purchase it, calling into question the veracity of Defendant’s statement that he never attempted
to sell the Domain Name. (Document No. 33-1 at 39:8-10; Document No. 26, Exhibit B-5, at 409).
26 / 30
(VII)
Plaintiff states that “Ricks has a pattern of using misleading contact information when
applying for registration of domain names [for example, ‘Motherboards.com,’ ‘Covanta.com,’
and ‘Gee Whiz Private WhoIs’] even if he allegedly does so for the purpose of protecting his
privacy.” (Document No. 26 at 25) (citing Document No. 26, Exhibit B, at 54:10-21, 59:7-22). In
response, Defendant states that:
[his] enrollment of commonplace privacy measures in registering the Domain Name does
not rise to the 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. It is common practice for owners of domain names to utilize whois
privacy services as they are typically cheap or free and can maintain the privacy and
security of both personal information and of loved ones. See Declaration of Gregory
Ricks, ¶ 19.
(Document No. 36 at 14). However, Defendant does not cite any case law for this assertion, nor
does he provide evidence that it is common practice to use privacy services, beyond his own
statement. The Court agrees with Plaintiff that Defendant’s pattern of providing misleading
contact information, including in this case, weighs against him.
(VIII)
Plaintiff states that “Ricks has registered or acquired thousands of domain names with
reckless disregard of whether they infringe on trademarks of others.” (Document No. 26 at 25-6).
In response, Defendant states that, while he has invested in thousands of domains, “[o]nly an
inconsequential fraction coincidentally overlap with a registered trademark. There is no duty to
search for a trademark before starting a business or registering a domain.” (Document No. 36 at
15).
Despite Defendants’ argument that only a small amount of his domains overlap with a
registered trademark, the fact remains that Defendant has acquired or registered several domain
27 / 30
names which are clearly “identical or confusingly similar to marks of others.” Examples include
the following domain names: “hpshoping.com,15” “pocketmac.com,” “playboybunny.com,”
“WWF.com,” “Wharton.com,” and “poe.com.” (Document No. 26, Exhibits C-1 through C-17,
Exhibits D-1 through D-20). Some of these marks are so famous that any argument by Defendant
that he was merely an investor in domain names, that he was unaware of his infringement upon
their trademarks, or that it was a coincidence, is unbelievable. See Texas Int'l Prop., 624 F. Supp.
2d at 590 (discounting argument that company “registered numerous domain names because they
are ‘valuable internet property,’” not because they were trademarked terms). In other cases,
domain names purchased by the Defendant are so specific that they suggest prior knowledge of
trademark
terms.
Examples
include
“Marshalsylver.com,”
“Datecheck.com,”
and
“Lexingtonmedicalgroup.com.” (Document No. 26 at 21, citing Exhibits C-13, C-16, and D-13).
Lastly, Plaintiff is correct that Defendant’s failure to check the PTO before using domain names
was “at his own peril,” because “the filing of the application to register such mark shall
constitute constructive use of the mark, conferring a right of priority.” 15 U.S.C.A. § 1057. This
factor suggests bad faith.
(IX)
The parties agree that Plaintiff’s mark is not famous. (Document No. 26 at 26; Document
No. 36 at 15). This factor weighs against Plaintiff. Texas Int'l Prop., 624 F. Supp. 2d at 591.
Overall, seven of the nine factors suggest bad faith on the part of the Defendant.
However, the Court does not “simply count up which party has more factors in its favor after the
15
Omitting the second “p” in shopping is known as “typosquatting,” where a party uses a domain name containing a
typo or intentional misspelling of distinctive or famous names. Texas Int'l Prop. Associates v. Hoerbiger Holding
AG, 624 F. Supp. 2d 582, 587 (N.D. Tex. 2009). Any argument that Defendant was unaware of HP’s trademark is
particularly absurd here, as there is no other reason to intentionally purchase a domain name with a typo.
28 / 30
evidence is in,” but must consider the “totality of the circumstances.” Id. at 590-1. In this case
the Court finds that Plaintiff has conclusively demonstrated that Defendant acted in bad faith
under the ACPA. An overwhelming majority of the factors suggest bad faith, and the Court is
particularly convinced that Defendant’s egregious pattern of cybersquatting shows bad faith. The
prior WIPO decisions are also relevant to the “totality of the circumstances,” because they
clearly demonstrate that Defendant knew or should have known that his conduct was illegal, but
continued to use his website to advertise lightbulbs.
Furthermore, the safe harbor under the ACPA does not apply to Defendant, as Defendant
did not believe or have reasonable grounds to believe that the use of the domain name was a fair
use or otherwise lawful. 15 U.S.C. § 1125(d)(1)(B)(ii). The safe harbor “provides a narrow berth
for fair use arguments.” S. Co. v. Dauben Inc., 324 F. App'x 309, 317 (5th Cir. 2009). As
described above, the fair use defense clearly does not apply to Defendant’s use of the Domain
Name. Furthermore, after the second WIPO decision, Defendant had constructive notice that his
use was not protected by the fair use doctrine, but continued to infringe. This was clearly
unreasonable, and bars the application of the safe harbor.16
Conclusion and Damages
Plaintiff has demonstrated as a matter of law that Defendant has violated the ACPA;
therefore its Motion for Summary Judgment (Document No. 26) is granted regarding this claim.
See Gallo Winery, 286 F.3d at 276; Texas Int'l Prop., 624 F. Supp. 2d at 591. Plaintiff requests
that the Court transfer the Domain Name to Plaintiff, and that the Court award statutory damages
of $100,000. (Document No. 26 at 26-27). However, the Court will address appropriate remedies
for Defendant’s violation of the ACPA at the conclusion of the entirety of the litigation.
16
Defendant’s extensive involvement in litigation regarding cybersquatting and trademarks also suggests that he did
not have a reasonable belief that his use of the Domain Name constituted fair use.
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Texas Anti-Dilution Statute
Both parties cite to Tex. Bus. & Com. Code § 16.29 in their discussions of liability for
dilution under Texas law. However, neither party appears to be aware that this statute was
recodified as Tex. Bus. & Com. Code § 16.103, in order to “make the Texas dilution standard
‘substantially consistent’ with federal law, including changing the dilution analysis so that only
‘famous’—as opposed to ‘distinctive’—marks received protection from dilution.” US Risk Ins.
Grp., Inc. v. U.S. Risk Mgmt., LLC, No. 3:11-CV-2843-M-BN, 2013 WL 4504754, at *20 (N.D.
Tex. Aug. 20, 2013) (citing Notes to Tex. Bus. & Com. Code § 16.103). See also Galvotec
Alloys, 2014 WL 6805458, at *10. Plaintiff’s mark is admittedly not famous; therefore
Defendant cannot be liable for dilution under Texas law. (Document No. 26 at 26). This claim is
dismissed.
Conclusion
The Court hereby
ORDERS that both parties’ motions for summary judgment (Document Nos. 26, 33)
regarding the trademark infringement claim are DENIED;
Plaintiff’s Motion for summary judgment regarding the ACPA claim is GRANTED and
Defendant’s Motion regarding the ACPA claim is DENIED; and
Defendant’s Motion regarding the dilution claim is GRANTED and Plaintiff’s Motion is
DENIED. Plaintiff’s claim of dilution under Texas law is hereby DISMISSED.
SIGNED at Houston, Texas, this 10th day of August, 2016.
___________________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE
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