At 03:56 PM 2/17/99 , Martin B. Schwimmer wrote:
>In the barrage of questions that you answered for me with a "no, I don't
>think so" you neatly ducked the question I had asked first, which is to
>identify cases brought under Section 32 against domain name owners where
>plaintiff had no colorable claim.
I don't see the relevance of your question. I never said there were lots
of such cases, or even any such cases. The problem I was describing was
the problem of NSI siding with a challenger (as it always does) and forcing
the domain name owner to go to real court.
Can you point to anybody who has claimed that there are many (or even any)
cases of the odd fact pattern that you described, a "no colorable claim"
case under Section 32 of the Lanham Act?
>I asked because there is this assumption spread on this list that there is
>a roving pack of trademark owners who bring meritless claims against DN
>owners, and that there are no legal remedies left to these DN owners, all
>of whom are too poor to defend themselves.
It is not a mere assumption. It is simple fact, proven (if I were violate
attorney confidentiality) by a full shelf of case files in my office. But
the claims are not brought in court (as you seem to challenge me to prove),
they are brought in NSI's self-appointed "court". I know of many dozens of
domain name owners (DNOs) too poor to fund a DJ litigation, whose domain
names have been cut off by NSI.
>I think the truth is perhaps a little bit different. I think that these TM
>owners usually do have colorable claims and then the DN owners settle out,
>neatly turning a profit.
Not the cases I am talking about. I am talking about dozens and dozens of
cases in which there is no colorable claim of infringement and yet NSI has
cut off the domain name, because the DNO does not have the resources to
fund a DJ litigation. And no, these DNOs do not "turn a profit", neat or
otherwise. Instead, their domain names are cut off. The ones with
domain-name-dependent businesses have their businesses ruined.
>Cause if they didn't, it would make economic
>sense for them to defend their property.
Nope. Not if they don't have several tens of thousands of dollars to fund
a litigation.
>And the law favors the DN owner against the meritless claim. While the DJ
>action doesn't necessarily award the DN owner all of its costs (assuming it
>wins), the mere action of filing the DJ suspends the NSI proceeding, and
>gives the DN leverage.
No, you are mistaken, in several ways. Most importantly (as I explained
earlier, though you edited it out) courts in America almost never award a
prevailing party *any* of its legal costs, other than certain very small
"court costs" like the $120 court fee for filing the lawsuit.
>Now I'm not defending NSI's policy (you know my position on that).
>
>My point is that if the facts were as some would portray them, we would be
>seeing a lot more declaratory judgment actions out there (and tort claims
>against the "covetous" TM owner).
There are a lot of such actions. I am litigating one right now in federal
court in New Jersey. But for each DNO who has tens of thousands of dollars
to spend on a DJ litigation, there are dozens of other DNOs who do not have
those tens of thousands of dollars to spend on a litigation. NSI cuts off
their domain names and that's the end of the matter. It is never reviewed
by a real judge.
>If there were that many active web sites
>being attacked by "Meritless" claims, some of them would have gotten
>together enough cash to file a DJ action (if for no other reason than to
>nullify the TM registrant's leverage in bringing the NSI proceeding).
They can't do it "together". The cases are in different states between
different parties. Each one has to find the tens of thousands of dollars
on its own.
>You point out that where the DN owner brings a DJ action, the case settles
>out. So? In these settlements do DN owners sell for 90 cents what is
>worth a dollar to them, or could it be the other way around?
In those settlements the DNO keeps its domain name, the challenger scuttles
under the nearest rock, and the DNO is still stuck paying its own lawyers
five figures of money.
>Maybe the reason everybody knows about the juno.com and epix.com cases is
>because they are unusual.
The juno.com case settled. Epix.com, cds.com, and dci.com are cases in
which courts explicitly ruled in favor of DNOs. And for each of those,
there are dozens of others in which a court would have ruled the same way
(in favor of the DNO) except that the DNO did not have enough money to fund
a litigation. As I say, I have a shelf filled with dozens of such cases.
>Now, there are a couple of misstatements in your post. Isn't just
>overblowm rhetoric to state that petitioner risks 66 cents to bring a NSI
>proceeding? They have to send a demand letter to the DN owner. The letter
>must state how the DN violates the TM owner's rights. The TM owner is now
>vulnerable to a DJ action.
Only if the DNO has enough money to fund a litigation. Most that I have
seen do not have enough money.
>If an action is brought someone is going to
>have to sign papers for declaratory defendant (yes, I've read Rule 11).
No, that is false, not if the case settles before the filing of an answer
(as most domain name cases do).
>Now some Judges have never awarded Rule 11 sanctions. Which proves what?
>All judges hate meritless claims clogging up their dockets so lawyers try
>not to bring meritless actions.
And in cases other than domain name cases, that is indeed what happens.
But in domain name cases, if the lawyer finds the case to be meritless, the
lawyer simply selects NSI's "court" instead, where there is no risk of
sanctions, Rule 11 or otherwise. Again, I have a shelf filled with such
cases.
>And as for the NSI "court awarding the DN" - in what situations is the
>remedy suspension, and in what situations is the remedy de-registration?
The initial remedy is that the DNO can't use the domain name any more.
Then if the DNO goes out of business (as I have seen several times) then
the annual fee is not paid and NSI (in a secret policy) gives the
challenger right of first refusal to pick up the domain name. The same
happens if the DNO stops paying the annual fee, the challenger gets the
domain name.
>Now you say that you have seen "many, many dozens of cases in which
>covetous parties brought meritless claims in NSI's "court" and in which NSI
>ruled in their favor, announcing that it had determined to take the domain
>name away from its owner. "
Yes, I have. And I cannot imagine that more than a tiny fraction of such
DNOs happened to have consulted my firm, so the actual number is surely
much, much more than the number I have seen.
>Many many dozens - that has to be at least 36 I would say. You are
>familiar with enough of the facts of 36 cases to conclude that in each of
>those cases:
>
>(1) a TM owner had no colorable cause of action; and
>(2) NSI awarded the TM owner the domain name [actually, cut off the
domain name]
>(3) without compensation to the DN owner?
>Who the heck was the DN owners' lawyer?
Our firm, in the several dozen cases I know about. And in most of these
cases, the DNO did not have enough money to fund a litigation.
Keep in mind that even if we work for free or for a reduced fee (as we have
done in several cases) it would still be necessary for someone to pay for
local counsel in the place where the DJ action would be brought.
Occasionally one of these wronged DNOs has the money to sue, for example
the case we are litigating right now in New Jersey. But most don't.
