Entrepreneur Media, Inc. v. B-Entrepreneur.com et al

Filing 23

AMENDED REPORT AND RECOMMENDATION re: 16 MOTION for Default Judgment as to b-entrepreneur.com and s-entrepreneur.com filed by Entrepreneur Media, Inc. Objections to R&R due by 2/23/2012. Signed by Magistrate Judge Theresa Carroll Buchanan on 2/9/2012. (stas)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
ENTREPRENEUR MEDIA, INC.,
Plaintiff,

)
)
)
) Civil Action No. 1:11cv583
)
)
)
)
)

v.
B-ENTREPRENEUR.COM and
S-ENTREPRENEUR.COM,
Defendants.

AMENDED REPORT AND RECOMMENDATION
This matter comes before the Court on plaintiff’s Motion
for Default Judgment (Dkt. 16) and plaintiff’s Objection to the
Report and Recommendation on Plaintiff’s Motion for Default
Judgment (Dkt. 22).

After a representative for defendants

failed to respond to plaintiff’s Motion or to appear at the
hearing on January 27, 2012, the undersigned took plaintiff’s
Motion under advisement.
I.

INTRODUCTION

On May 27, 2011, plaintiff Entrepreneur Media, Inc.
(“plaintiff”) filed this action in rem against defendants Bentrepreneur.com and S-entrepreneur.com (“Infringing Domain
Names” or “defendants”).

In its Verified Complaint, plaintiff

alleges that the Infringing Domain Names are confusingly similar
to plaintiff’s ENTREPRENEUR® trademark, and seeks relief under
the Anti-Cybersquatting Consumer Protection Act (“ACPA”), 15
U.S.C. § 1125(d)(2) (2006).

Plaintiff now seeks default
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judgment against the defendants in rem and a permanent
injunction directing that ownership of the Infringing Domain
Names be transferred to plaintiff.
A.

Jurisdiction and Venue

This Court has subject matter jurisdiction over the action
pursuant to 28 U.S.C. § 1331 and 1338(a) because it involves a
federal question arising under the ACPA, 15 U.S.C. § 1125(d).
This Court has in rem jurisdiction over the Infringing
Domain Names pursuant to 15 U.S.C. § 1125(d)(2)(A) because
plaintiff has alleged violations of its registered trademarks,
and because plaintiff, despite due diligence and proper notice,
is unable to locate a person who would have been a defendant in
this action.
Venue is proper in this District under 15 U.S.C. §
1125(d)(2)(C) because the registry for the Infringing Domain
Names, VeriSign, Inc. (“VeriSign”), is located in this District.
B.

Service of Process

A plaintiff filing an action under the ACPA must provide
notice of the action to the owner/registrant of the allegedly
infringing domain name.

15 U.S.C. § 1125(d)(2)(A)-(B).

Sufficient notice of an in rem action is established by both (a)
sending notice of the violation and intent to bring this action
to the registrant of the domain name at the postal and e-mail
address provided by the registrant to the registrar; and (b)
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publishing notice of the action as the Court may direct after
filing the action.

Id. § 1125(d)(2)(A)-(B).

Plaintiff was unable to locate and personally serve the
registrants of the Infringing Domain Names due to their
provision of false contact information to the registrar.
(Memorandum of Law in Support of Plaintiff’s Motion for Default
Judgment (“Mem. Supp. Mot. Default J.”) at 7.)

Defendants

falsely listed plaintiff’s physical address, telephone number,
and administrative contact as its own contact information in the
WHOIS record.

(Complaint (“Compl.”) ¶¶ 9-10, 25-26.)

As such,

service of process under the in rem provisions of the ACPA is
satisfied by notifying the registrants of the Infringing Domain
Names at their provided postal and email addresses and by
publishing notice of the action as the Court may direct.

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U.S.C. § 1125(d)(2)(A)(ii)(II)(aa)-(bb).
Plaintiff sent a notice of the alleged violation and intent
to proceed under the ACPA to the registrants of the Infringing
Domain Names at the e-mail addresses provided by the registrant
to the registrar.1

(Memorandum in Support of Plaintiff’s Motion

for an Order to Publish Notice of Action (“Mot. Pub. Notice”),

Plaintiff was unable to provide postal notice to defendants
because defendants falsely listed plaintiff’s own postal address
as the address for the Infringing Domain Names. (Compl. at 4.)
As its inability to comply with the full requirements of §
1125(d)(2)(A)(ii)(II)(aa) comes through no fault of its own, the
undersigned finds that this provision has been satisfied.
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Ex. A.)

Plaintiff also sent e-mail and postal notice to the

Registrar of the Infringing Domain Names, Register.com, Inc.
(Mot. Pub. Notice, Ex. B.)

Additionally, on August 26, 2011,

the Court entered an Order granting plaintiff’s Motion for
Service by Publication.

(Dkt. 10.)

On September 9, 2011, a

notice of the action was published in The Washington Times.
(Declaration of Tara Lynn R. Zurawski Describing Compliance with
the Court’s Order to Publish Notice of Action (“Zurawski Decl.”)
¶¶ 3-4.)
Thus, the requirements of § 1125(d)(2)(A)(ii)(II) have been
satisfied, and service of process is deemed complete.

15 U.S.C.

§ 1125(d)(2)(B).
C.

Grounds for Entry of Default

To date, no party with an interest in the Infringing Domain
Names has appeared or otherwise participated in these
proceedings.

On September 9, 2011, The Washington Times

published the notice of this action, informing parties with an
interest in Infringing Domain Names of the need to respond in
this case within twenty-one (21) days, or by September 30, 2011.
(Zurawski Decl. ¶¶ 3-4.)

By October 19, 2011, no party had

responded on behalf of the Infringing Domain Names, and
plaintiff requested entry of default.

(Dkt. 12.)

On November

15, 2011, the Clerk of this Court entered default against the
Infringing Domain Names.

(Dkt. 15.)
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Plaintiff filed its Motion

for Default Judgment on January 5, 2012.

(Dkt. 16.)

The

undersigned held a hearing on plaintiff’s Motion on January 27,
2012, at which no representative for the Infringing Domain Names
appeared.

(Dkt. 20.)

Finding this matter uncontested, the

undersigned took plaintiff’s Motion under advisement to issue
this Report and Recommendation.
II.

FINDINGS OF FACT

Upon a full review of the pleadings and the record in this
case, the undersigned finds that the plaintiff has established
the following facts.
Plaintiff Entrepreneur Media, Inc. is a California
corporation and has its principal place of business in Irvine,
California.

(Compl. ¶ 8.)

The unknown defendants used false

identities to register the Infringing Domain Names with
VeriSign, which is located in this district.

Defendant Domain

Name b-entpreneuer.com is registered to “Pamela Lynn” and
Defendant Domain Name s-entrepreneur.com is registered to
“Entrepreneur, Inc., Verita Powell.”

(Id. ¶¶ 9-10.)

Both

Infringing Domain Names falsely list plaintiff’s contact
information as their own.

(Id.)

The Infringing Domain Names

also falsely list Michael Frazier, plaintiff’s current employee,
as an Administrative Contact.

(Id. ¶¶ 25-26.)

Plaintiff is the owner of U.S. Trademark Registration Nos.
1,453,968; 2,502,032; and 2,263,883 for its ENTREPRENEUR mark.
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(Id. ¶ 14, Ex. B.)

Plaintiff also owns all rights and interest

in various U.S. Trademark Registrations of marks incorporating
the term ENTREPRENEUR, including: 3,470,064; 3,924,374; 3,519,
022; 3,470,063; 3,266,532; 3,374,476; 3,652,950; and 3,204,899.
(Id. ¶ 15, Ex. C.)
Plaintiff has used the ENTREPRENEUR mark to identify its
brand since 1978.

(Id. ¶ 12.)

Plaintiff publishes magazines,

business guides, websites, and other publications that
incorporate the ENTREPRENEUR mark in their titles.

(Id. ¶ 11.)

These publications distribute “free enterprise and business
news.”

(Mem. Supp. Mot. Default J. at 3.)

One publication,

ENTREPRENEUR® Magazine, has a current circulation of 600,000 and
is distributed in over 100 foreign countries.

(Compl. ¶ 11.)

Plaintiff’s websites include its flagship website,
www.entrepreneur.com (“the E.com site”), which averages 6
million unique visitors a month and 52.6 million page views per
month.

(Id. ¶ 13.)

In each of plaintiff’s media outlets, the

ENTREPRENEUR mark is prominently displayed.

(Id. ¶ 12.)

The Infringing Domain Names each contain the word
“entrepreneur” combined with a single letter.

They are

confusingly similar to the federally registered and
incontestable ENTREPRENEUR mark.

The websites at those domain

names display content similar to that displayed at plaintiff’s
websites, including the E.com site.
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(Id. ¶¶ 18-21.)

None of the record owners of the Infringing Domain Names
has any trademark or intellectual property rights in the
ENTREPRENEUR mark or the domain names for which it is the owner
of record.

(Id. ¶ 27.)

Each of the Infringing Domain Names was

registered without authorization from the plaintiff.

(Id.)

Plaintiff has not licensed or otherwise permitted any of the
Infringing Domain Names to use its ENTREPRENEUR mark in
connection with the distribution of business media, or to apply
for any domain names similar to the ENTREPRENEUR mark.

(Id.)

The Infringing Domain Names were registered and used to divert
consumers from plaintiff’s website to websites accessible under
those domain names, for the registrant/owner’s commercial gain,
by creating a likelihood of confusion as to the source,
sponsorship, affiliation, or endorsement of those web sites.
III. EVALUATION OF PLAINTIFF’S VERIFIED COMPLAINT
Where a defendant has defaulted, the facts set forth in the
plaintiff’s complaint are deemed admitted.

Before entering

default judgment, however, the Court must evaluate the
plaintiff’s complaint to ensure that the complaint properly
states a claim.

GlobalSantaFe Corp. v. Globalsantafe.com, 250

F. Supp. 2d 610, 612 n.3 (E.D. Va. 2003).

As such, it is

appropriate to evaluate plaintiff's claim against the standards
of Federal Rule of Civil Procedure 12(b)(6).

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A.

Legal Standard

The ACPA allows the owner of a mark to file an in rem civil
action against a domain name if the domain name violates the
owner’s trademark rights, and if the owner of the mark satisfies
certain procedural provisions.

15 U.S.C. § 1125(d)(2)(A).

The

procedural provisions include establishing that the Court lacks
in personam jurisdiction over the defendants, or that the
plaintiff has been unable to locate the defendants through due
diligence.

Id. § 1125(d)(2)(A)(ii).

In an in rem action, the

remedies are limited to forfeiture, cancellation, or transfer of
the Infringing Domain Name to the owner of the mark.

Id. §

1125(d)(2)(D).
Thus, to be entitled to relief in rem, the owner of a mark
must prove a violation of “any right of the owner of a mark
registered in the Patent and Trademark Office,” or of
subsections 1125(a) or (c).

Id. § 1125(d)(2)(A)(i).

The phrase

“any right of the owner of a mark” encompasses claims brought
under § 1125(d)(1).

Harrods Ltd. v. Sixty Internet Domain

Names, 302 F.3d 214, 224, 228, 232 (4th Cir. 2002).
Plaintiff has elected to seek relief under § 1125(d)(1).
That provision creates civil liability for registering,
trafficking in, or using a domain name that is “identical or
confusingly similar” to a plaintiff’s mark, with a bad faith
intent to profit from that mark.

15 U.S.C. § 1125(d)(1)(A).
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Thus, to prevail under § 1125(d)(1), a plaintiff must prove (1)
plaintiff’s ownership of a valid and protectable mark; (2)
defendant’s use of a domain name that is “confusingly similar”
to plaintiff’s mark; and (3) defendant’s bad faith intent to
profit from the mark.
1.

Plaintiff Possesses a Valid and Protectable Mark
The undersigned finds that the plaintiff has sufficiently

pled protectable rights in the trademarks alleged in the
Verified Complaint.

Plaintiff has used the ENTREPRENEUR mark

extensively in the United States and worldwide in connection
with its products.

(Compl. ¶ 12.)

In addition, plaintiff

registered its ENTREPRENEUR mark with the United States Patent
and Trademark Office.
a famous mark.

(Id. ¶¶ 14-15.)

The ENTREPRENEUR mark is

Therefore plaintiff is entitled to enforce the

provisions of § 1125(d) against any domain name that violates
its rights in the ENTREPRENEUR mark.
2.

The Infringing Domain Names are Confusingly Similar
The undersigned also finds that plaintiff has pled facts

showing that the Infringing Domain Names are confusingly similar
to the ENTREPRENEUR mark, and that the registration of those
domain names was likely to result in damage to the plaintiff.
The confusing similarity standard is satisfied when a domain
name is virtually identical to the plaintiff’s mark.

See Agri-

Supply Co. v. Agrisupply.com, 457 F. Supp. 2d 660, 663 (E.D. Va.
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2006).

The Infringing Domain Names are both combinations of

word “entrepreneur” with an additional letter and hyphen.

These

websites – competitors of the plaintiff’s E.com site – create a
likelihood of confusion.
3.

Defendants Have Acted with a Bad Faith Intent
Finally, the undersigned also finds that plaintiff has pled

facts evidencing defendants’ bad faith intent to profit from
plaintiff’s ENTREPRENEUR mark.

Under the ACPA, bad faith intent

may be evidenced by weighing nine non-exhaustive factors.
§§ 1125(d)(1)(B)(i).

Id.

“The factors are given to courts as a

guide” and need not be exhaustively considered in every case.
Lamparello v. Falwell, 420 F.3d 309, 319-20 (4th Cir. 2005).

In

relevant part, the factors supporting a finding of a bad faith
include: a defendant’s intellectual property rights in the
domain name; a defendant’s intent to divert consumers from the
mark owner’s website in such a way that could harm the goodwill
of the mark; and a defendant’s provision of misleading or false
contact information when applying for registration of the domain
name.

15 U.S.C. §§ 1125(d)(1)(B)(i)(I), (V), (VII).
Based on these factors, the undersigned finds that the

defendants have acted with a bad faith intent to profit from
plaintiff’s mark in violation of the ACPA.

They have no

intellectual property rights in the Infringing Domain Names.
(Compl. ¶ 27.)

They do not offer bona fide goods or services,
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and apparently only generate pay-per-click revenue.

(Id. ¶ 24.)

The content offered at the Infringing Domain Names’ sites is
confusingly similar to that available at plaintiff’s E.com site.
(Id. ¶¶ 18-21.)

This evidences an intent to divert consumers

from plaintiff’s site in a way that could tarnish the goodwill
represented by plaintiff’s ENTREPRENEUR mark.

Finally,

defendants supplied false contact information when registering
the Infringing Domain Names, thus demonstrating a bad faith
intent to profit from plaintiff’s ENTREPRENEUR mark.
B.

Conclusion

Because the remaining procedural provisions of 15 U.S.C. §
1125(d) have been satisfied, see supra pp. 2-4, the Court may
order the forfeiture or cancellation of the Infringing Domain
Names or the transfer of the domain names to the owner of the
ENTREPRENEUR mark – the plaintiff. 15 U.S.C. § 1125(d)(2)(D)(i).
IV.

REQUESTED RELIEF

The plaintiff seeks an injunction under 15 U.S.C. § 1125(d)
ordering the domain name registry VeriSign to transfer each of
the Infringing Domain Names to a registrar of the plaintiff’s
choosing and ordering that the chosen registrar transfer
ownership of the Infringing Domain Names to plaintiff.
V.

RECOMMENDATION

For the reasons outlined above, the undersigned recommends
that default judgment be entered in favor of the plaintiff
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Entrepreneur Media, Inc. with respect to the Infringing Domain
Names b-entrepreneur.com and s-entrepreneur.com for violations
of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. §
1125(d).

The undersigned further recommends that VeriSign be

required to transfer ownership of the Infringing Domain Names
from their current registrants to plaintiff pursuant to 15
U.S.C. § 1125(d)(1)(C).
VI.

NOTICE

The parties are advised that exceptions to this Report and
Recommendation, pursuant to 28 U.S.C. § 636 and Rule 72(b) of
the Federal Rules of Civil Procedure, must be filed within
fourteen (14) days of its service.

Failure to object to this

Report and Recommendation waives appellate review of any
judgment based on it.
The Clerk is directed to send a copy of this Report and
Recommendation to all counsel of record.

/s/
THERESA CARROLL BUCHANAN
UNITED STATES MAGISTRATE JUDGE
February 9, 2012
Alexandria, Virginia

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