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Bidder Domain Buy, Use After Loss May Violate ACPA

Friday, December 21, 2012
An auto dealership that purchased a pair of domain names linked to its bid to operate a new dealership, and use of the domains after a rival was awarded the project, may generate liability under the Anticybersquatting Consumer Protection Act, the U.S. District Court for the District of New Jersey ruled Oct. 19, denying the dealer's motion to dismiss (Edison Motor Sales LLC v. Dibre Auto Group LLC, D.N.J., No. 12-239, 10/19/12).

Edison Motor Sales LLC and Dibre Auto Group LLC both operate Nissan dealerships in New Jersey. In mid-2010, Nissan invited them to apply to become owners of a new dealership. Both parties applied. Before Edison was announced as the winner, Dibre registered a pair of domain names, edisonnissan.com and nissanofedison.com. Dibre later used the domains to divert traffic to its website, Edison alleged. Edison added that Dibre knew Nissan restricts the use of combinations of its marks and geographic names to dealers pursuant to its dealer agreement.

Those allegations supported a claim for cybersquatting under 15 U.S.C. §1125(d), among other things, Judge Dennis M. Cavanaugh concluded in an unpublished opinion.

The ACPA makes it unlawful to register or use a domain name with a bad faith intent to profit. Here, Edison alleged that Dibre intended to trade on its reputation and cause dilution of Edison's mark, with a bad faith intent to profit. While it was possible that Dibre may have registered the domains with a bona fide intent to use them in commerce, it failed to do so until after the dealership was awarded to Edison.

The court also allowed a false designation of origin claim to proceed. The court rejected Dibre's argument that it used the mark first, holding that mere registration of a mark as a domain name is not a use in commerce.


Opinion at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/bidder(1).pdf

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