Last Friday the Court in Virginia ruled that it had jurisdiction
over every
domain name registered by or through NSI.
Given the importance of this issue, we thought the attached comment
would
be of interest to you.
Regards
David Flint
************************************
152 Bath Street
GLASGOW
G2 4TB
Tel: +44 141 332 9988
Fax: +44 141 332 8886
E-Mail: [EMAIL PROTECTED]
PRESS RELEASE
US SEIZES JURISDICTION OVER DOT.COM COMPANIES
� Mere registration of top level domain sufficient
� US companies able to seize worldwide registrations
� US trademark owners able to have domain names of others
expropriated
Over the last few years we have commented on Internet cases from
around the
world which we believe would be of interest to UK businesses and
others.
For some readers these cases may have been more relevant than
others. Today
however we report on a decision of the District Court for the
Eastern
District of Virginia which has perhaps the furthest reaching
implications
for worldwide internet governance.
In its Decision of Friday 5th March 2000, Caesars World, Inc -v-
Caesars-Palace .Com and others (Civil Action No 99-550-A), Judge
Albert
Bryan effectively decreed that his court would be the arbiter of the
property rights in respect of all the approx. 7,000,000 .COM, .EDU,
and
.ORG top level domains registered. Although the Decision dealt
solely with
the motions of two of the defendants to dismiss an action for lack
of
jurisdiction, the effect of the Decision is to open the floodgate to
litigation by holders of US trademarks against domain name
proprietors
based outwith the US (or at least outwith Virginia.
In the particular circumstances of the case, it may be that
ultimately the
defendants will prevail in respect of the substantive issues of the
case.
Certainly there are many reasons why this may be so. However, for
the bulk
of the Internet community the issue is not one of the substantive
issues
but one of jurisdiction and being subject to the jurisdiction of the
US
courts.
The action was brought originally under the Federal Trademark
Dilution Act
and amended to include claims under the Anti-Cybersquatting Consumer
Protection Act 1999. The basic change brought about by the ACPA was
to
allow in rem jurisdiction to be taken in specific cases. The same
Virginia
Court had previously ruled in Porsche Cars -v- Porsche.com that in
rem
jurisdiction could not be asserted over a domain name.
The court's brief decision rejects all the arguments of the
defendants who
chose to defend the case; the others (mistakenly it may appear) took
the
view that the US court had no jurisdiction and chose not to enter
appearance. The decision seems to go against the clear wording of
the ACPA
which seemed to suggest that in rem jurisdiction was only to be
exercised
as a fall-back position. Section 43(d)(2A) of the Trademark Act of
1946 (15
U.S.C. 1125) ("the Lanham Act")
"The owner of a mark may file an in rem civil action against a
domain name
in the judicial district in which the domain name registrar, domain
name
registry, or other domain name authority that registered or assigned
the
domain name is located if--
`(i) the domain name violates any right of the owner of a mark
registered
in the Patent and Trademark Office, or protected under subsection
(a) or
(c); and
`(ii) the court finds that the owner--
`(I) is not able to obtain in personam jurisdiction over a person
who would
have been a defendant in a civil action under paragraph (1); or
`(II) through due diligence was not able to find a person who would
have
been a defendant in a civil action "
Judge Bryan considered that the Plaintiff could proceed straight to
the in
rem action, as the defendants had not indicated that they were
amenable to
in personam jurisdiction. In this case there is no indication that
the
Plaintiff tried to do so although the addresses of many of the
defendants
were known.
According to the Court, the mere fact that the domain name was
registered
with Network Solutions Inc in Virginia was of itself sufficient to
satisfy
the minimum contacts requirements of the US Constitution. Given that
until
recently NSI was the only registrar and still maintains the
registry, this
is hardly a jurisdiction of choice for parties having a .COM
registration.
In a very curious statement, Judge Bryan states "given the limited
relief
afforded by the [Anti-Cybersquatting Consumer Protection] Act,
namely "the
forfeiture or cancellation of the domain name or the transfer of the
domain
name to the owner of the mark", no due process violation occurred to
the
defendants personally". Whilst the types of relief may be limited
(and
damages are also possible under that Act) the consequences of the
relief
are not.
David Flint, Partner in MacRoberts Solicitors Glasgow (who advised
one of
the defendants in this case) comments: - "This decision may have the
greatest effect ever of any US cyberlaw case to date. Effectively
all those
international businesses using Top Level Domains (which is now the
norm)
may find their domains being challenged by US businesses. Even if
ultimately successful, the cost to business in fighting challenges
before
the US courts is not insubstantial and the possibility of little or
no
recovery of expenses may lead to a swing in the balance of power to
the
powerful US trademark lobby.
Developments in this case will be watched with interest by
world-wide
Internet users".
For Further Information Contact:
David Flint Tel: +44 141 332 9988
[EMAIL PROTECTED]
Joanna Boag-Thomson
[EMAIL PROTECTED] Fax: +44 141 332 8886
Elaine McKinney
[EMAIL PROTECTED]
*********************
David Flint Tel: +44 141 332 9988
IP & Technology Law Group Fax: +44 141 332 8886
MacRoberts, Solicitors
152 Bath Street E-Mail: [EMAIL PROTECTED]
GLASGOW G2 4TB
Scotland UK URL:
http://www.macroberts.co.uk
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Michael Sondow I.C.I.I.U. http://www.iciiu.org
Tel. (718)846-7482 Fax: (603)754-8927
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