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From Intellectual Property Law Daily, December 17, 2015

Website creator must transfer ‘By Design’ domain names to retailer

By Thomas Long, J.D.

A furniture retailer was likely to succeed on its claims that an individual who had been contracted to create and maintain a commercial website violated the Anticybersquatting Consumer Protection Act by registering four domain names in his own name that incorporated the retailer’s trademark, and then refusing to turn over the domain names unless he was paid for them, the U.S. Court of Appeals in Atlanta has decided. A district court’s issuance of a preliminary injunction requiring the individual to transfer the domain names to the retailer was affirmed (Jysk Bed’N Linen v. Dutta-Roy, December 16, 2015, Tjoflat, G.).

Jysk Bed’N Linen had sold home, office, and patio furniture under the trade name “By Design” since 1990. In early 1999, Jysk contracted with defendant Monosu Dutta-Roy and others to create an online-shopping website. Dutta-Roy was instructed to register the domain name bydesignfurniture.com, listing Jysk as the owner. Dutta-Roy registered the domain name in April 1999, but he listed his own name instead of Jysk’s as the owner. A few years later, the relationship between Jysk and Dutta-Roy’s web design business, Bazaarworks, ended.

On April 9, 2012, the registration for bydesignfurniture.com expired, causing Jysk’s website to go down. Jysk asked Dutta-Roy to re-register the domain name with Jysk listed as the owner; Dutta-Roy refused, and instead re-registered bydesignfurniture.com and registered the names bydesignfurniture.org, bydesignfurnitures.com, and bydesign-furnitures.com. Dutta-Roy offered to transfer the names to Jysk if he were paid for work purportedly done pursuant to a partnership agreement between Jysk and Bazaarworks. That agreement did not exist. Instead of paying Dutta-Roy, Jysk filed suit under the Anticybersquatting Consumer Protection Act (ACPA). The ACPA provides for a cause of action to a mark owner against a person who, acting with a bad faith intent to profit, registers a domain name that is identical to or confusingly similar to the mark. The district court issued a preliminary injunction requiring Dutta-Roy to transfer all four domain names to Jysk; Dutta-Roy appealed.

Re-registration. Resolving a threshold matter, the court held that Dutta-Roy’s re-registration of bydesignfurniture.com in 2012 fell within the purview of the ACPA. There was a circuit split on the issue, with the Third Circuit holding that a re-registration constituted a registration for ACPA purposes, and the Ninth Circuit reaching the opposite conclusion. The Eleventh Circuit sided with the Third Circuit, noting that the ACPA did not limit its scope to the “initial” registration or “creation” of a registration; it simply referred to a registration, and in the court’s view, re-registration was a registration.

Likelihood of success—cybersquatting. Jysk was substantially likely to prevail on the merits of its ACPA claims, the court said. Jysk owned the marks “bydesignfurniture.com” and “By Design.” Those marks were distinctive when Dutta-Roy registered the domain names, either inherently or by virtue of acquired secondary meaning. The evidence indicated that Dutta-Roy acted with a bad faith intent to profit. Dutta-Roy lacked any IP rights in the domain names, and he had never offered goods or services in connection with those names. He registered multiple domain names that he knew were identical or confusingly similar to Jysk’s marks, and he offered to transfer or sell the domain names to Jysk for financial gain. Dutta-Roy’s apparent belief that he was entitled to hold the domain names hostage in exchange for a contract price in a (nonexistent) partnership agreement had no basis in fact or law.

Irreparable harm; other factors. If the domain names were not transferred to Jysk, Jysk would not have full control over websites that bore its trademark and could lose goodwill as a result. The loss of customers and goodwill was an irreparable injury, the court said. The balance of harms favored Jysk, and placing the domain names in the hands of the rightful owner would serve the public interest. Therefore, the district court did not abuse its discretion in issuing the preliminary injunction.

The case is No. 13-15309.

Attorneys: Jonathan H. Fain (Jonathan H. Fain & Associates, PC) for Jysk Bed’N Linen d/b/a By Design Furniture. Monosij Dutta-Roy, pro se.

Companies: Jysk Bed’N Linen; By Design Furniture

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