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Feb. 7 --A failed bid to secure a new gTLD did not result in a “registration” of a domain name that would support an action under the Anticybersquatting Consumer Protection Act, the U.S. District Court of the Central District of California ruled Feb. 5 in an issue of first impression (Del Monte Int'l GmbH v. Del Monte Corp., C.D. Cal., No. 2:13-cv-05912-RSWL-MAN, 2/5/14).
An expert told Bloomberg BNA that the lawsuit appeared to be an attempt by the plaintiff to appeal an adverse ruling that was issued in July by the World Intellectual Property Organization. The court in this case determined that the success of the legal rights objection in that proceeding prevented the plaintiff from obtaining a “registered” domain name. Because there was no registered domain name, the plaintiff could not assert any claims under the ACPA, the court held.
In July, Del Monte Corp. (DMC) prevailed over one of its many global trademark licensees in a legal rights objection challenging the licensee's application for the .delmonte new top-level domain (152 PTD, 8/7/13). The opinion, posted by the World Intellectual Property Organization's Arbitration and Mediation Center, marked a pair of firsts. It was the first objection to be upheld under ICANN's new LRO process. The decision was also the first involving parties that opted for three-member panel LRO proceedings.
The respondent in that proceeding, Del Monte International GmbH (DMI), is the assignee of three license agreements that permit it to use the Del Monte mark on certain processed food products in Europe, the Middle East and Africa, as well as on fresh produce and certain other products on a worldwide basis. DMI applied for the .delmonte TLD, prompting the filing of a LRO by DMC. By ruling in favor of DMC, the WIPO panel halted the progression of the application. One of the WIPO panelists dissented, arguing that DMI had “a bona fide basis for owning this gTLD.”
DMI filed the instant lawsuit soon after WIPO's ruling. DMI sought a declaration that it has bona ride rights in the Del Monte mark and that it is not in violation of the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d). DMI also sought a declaration that its registration of the .delmonte gTLD will not create an impermissible likelihood of confusion. Finally, DMI sought an order from the court requiring DMC to withdraw its LRO.
DMC moved for dismissal on a number of grounds. Notably, DMC argued that the court lacked subject matter jurisdiction over the claims because there is no case or controversy between the parties either in general or with respect to the ACPA. Additionally, DMC argued that DMI's complaint failed to state a claim for relief under the ACPA.
The court relied on Sallen v. Corinthians Licenciamentos LTDA, 273 F.3d 14, 60 U.S.P.Q.2d 1941 (2d Cir. 2001), to determine that there was a live case or controversy under the ACPA. One of the first cases to deal with the interplay between the ACPA and ICANN's Uniform Domain Name Dispute Resolution Policy, Sallen “found in a case where the plaintiff invoked 15 U.S.C. § 1114(2)(D)(v) that there was a live controversy where: (1) both parties were still claiming exclusive rights to the same domain name, (2) the domain name had been transferred to the defendant, and (3) the defendant was using the domain name,” the court here said.
Like in Sullen, here “a dispute arose with respect to the Parties' respective rights to a mutually excludable internet domain,” Judge Ronald S.W. Lew said. Specifically, the court noted that after DMI filed an application to be the exclusive owner of the .delmonte gTLD, DMC filed a legal rights objection. “And, here, just as in Sallen, a determination was made as to the domain's ownership pursuant to a policy 'prohibiting the registration of a domain name that is identical to, confusingly similar to, or dilutive of another's mark,' ” the court said, quoting 15 U.S.C. § 1114(2)(D)(ii)(II). Accordingly, the court determined that a controversy existed under the ACPA.
But though there was a controversy for jurisdictional purposes, DMI failed to state a claim for relief under the ACPA, the court determined. DMI sought relief under both the ACPA and 15 U.S.C. § 1114(2)(D)(v). The latter provision allows for a “domain name registrant whose domain name has been suspended, disabled or transferred” to “file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter.” 15 U.S.C. § 1114(2)(D)(v). The court noted that to prevail on either claim DMI needed to show at a minimum that a “domain name” was at issue. DMI accordingly needed to demonstrate that the .delmonte TLD is a domain name, the court said.
This appears to be a matter of first impression, and the Court keeps in mind that “[n]ot once has any court imputed trademark rights to a gTLD. In fact, rather than look at a gTLD to determine trademark rights, the Ninth Circuit and others ignore the TLD as though it were invisible next to the second level domain name in an infringement action.”
The court said that a determination of whether a gTLD can be a domain name will depend on a determination of whether ICANN is a “domain name registration authority” within the meaning of 15 U.S.C. § 1127. The court noted that same provision clearly provides that a domain name can be “any alphanumeric designation” so long as the designation is registered with “a domain name registrar, domain name registry, or other domain name registration authority.”
Because the .delmonte gTLD would be registered with ICANN, the critical question is whether ICANN is a domain name registration authority, the court said. The court ultimately answered the question in the negative, finding that “the plain language of the statute and its legislative history suggest that ICANN is not a 'domain name registration authority' within the meaning of the ACPA.”
However, it is not clear if that conclusion is still applicable given ICANN's responsibilities with respect to the new gTLDs, the court said. “By receiving and reviewing applications for new gTLDs and by ultimately delegating new gTLDs into the root zone, ICANN acts much like a traditional domain name registrar,” the court said. It thus assumed without deciding that .delmonte was a domain name and turned to other elements of DMI's claim to determine if it had asserted an action under the ACPA.
BMI's complaint ultimately failed to state a claim under the ACPA because it never registered a domain. Only registered domains, if suspended disabled or transferred, can give rise to a claim under Section 1114(2)(D)(v), the court noted. Here, the domain was never registered in part because DMC's legal rights objection prevented the gTLD from being delegated to the root, the court said.
Unlike the process for second level domains, where application and registration occur simultaneously, “the gTLD application process deliberately separates application from registration,” the court said. “By doing so, the process is designed to stymie cybersquatting activity.”
Additionally, the gTLD process has safeguards that are not present with respect to the second level domain registration process, the court said. “As a result, the protections of the ACPA are much less relevant to the gTLD application process than for the current second level domain name registration process.”
The court thus concluded that DMI could not demonstrate a prima facie case for cybersquatting under the ACPA. As a matter of law, the court determined that DMI had also failed to state a claim for relief under Section 1114(2)(D)(v). The court said:
The Court recognizes the paradoxical nature of this result--second level domain disputes adjudicated under the UDRP could be subject to review under the ACPA but disputes over top level domains may not. However, this Court believes that extending the ACPA to cover such disputes would upset the balance reached by ICANN in formulating its new gTLD program.
Brian J. Winterfeldt is head of Katten Muchin Rosenman LLP's Internet practice group in Washington, D.C. Winterfeldt told Bloomberg BNA that the court's struggle to apply the ACPA to the new gTLD program is not surprising given “that the ACPA predates even the first new TLD expansion back in 2000. It simply was not written with an eye to an unlimited roll out of new gTLDs.” “The Central District of California did the best they could with the antiquated definitions in the ACPA,” he said.
Winterfeldt noted that the suit itself “seems intended as an appeal of the Legal Rights Objection determination by WIPO. Unfortunately, appeal mechanisms were not specifically created for new gTLD objections.”
Given the lack of a formal appeal process with respect to the new gTLDs, Winterfeldt said that this is likely just the first of many cases that we will see.
“We can predict that additional lawsuits will be filed as more parties weigh their options in challenging unfavorable new gTLD dispute resolution determinations,” he said. “There will always be certain parties who race to the courthouse.”
Winterfeldt, however, said that it was important to note that “the holding does not necessarily foreclose application of the ACPA in the context of successful gTLD registrations--quite the opposite, we think the opinion invites it.”
Del Monte International was represented by Jason D. Russell of Skadden Arps Slate Meagher and Flom LLP, Los Angeles. Del Monte Corp. was represented by Thomas Harold or Zellerbach Orrick Herrington and Sutcliffe LLP, Menlo Park, Calif.
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