Misleading UDRP Exhibits Could Create Liability Under Anticybersquatting Consumer Protection Act
In an unpublished opinion, the U.S. Court of Appeals for the Fifth Circuit held that a company that allegedly redacted portions of an exhibit submitted in connection with a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) may be liable for misrepresentation under the Anticybersquatting Consumer Protection Act (ACPA). ISystems v. Spark Networks, Ltd., Case No. 10-10905 (5th Cir., Mar. 21, 2012) (per curiam).
In 1997, defendant Spark Networks Limited purchased the domain name jdate.com, through which it provides online dating services that cater to Jewish singles. The defendant registered the “JDate” mark with the U.S. Patent and Trademark Office for its web-based introduction services in January 2001. In May 2001, plaintiff ISystems purchased the domain name jdate.net to market its Julian date (or “JDATE”) computation software product. The plaintiff later allowed an organization called the Jewish Dating Network to use a subdomain of its jdate.net website to provide a non-profit service that rates Jewish online dating resources. When the plaintiff did not comply with the defendant’s request that the plaintiff transfer to it the jdate.net domain, the defendant filed an arbitration complaint under the UDRP. The defendant won transfer of the jdate.net domain, causing the plaintiff to file a complaint in federal district court against the defendant and its parent company alleging, among other claims, that the defendant’s efforts in the UDRP action violated the Anticybersquatting Protection Act (ACPA). The district court ultimately granted the defendant’s motion to dismiss, and the 5th Circuit affirmed the district court. The 5th Circuit later granted the plaintiff’s petition for rehearing.
Under the ACPA, a party is liable for damages if a registrar transfers a domain name based on such party’s “knowing and material misrepresentation…that a domain name is identical to, confusingly similar to, or dilutive of a mark.” The plaintiff alleged that the defendant materially misrepresented the nature of the plaintiff’s site by presenting a “true and correct copy” of the plaintiffs’ webpage as an exhibit to its UDRP complaint, while blacking out certain portions of the exhibit to make its website appear to be a commercial site rather than a non-profit resource. The plaintiff claimed that an actual copy of the opening page of the site would have identified the website as a not-for-profit resource, but instead, the redacted image of the site suggested that it redirected visitors to other websites for profit. Taking the plaintiff’s factual allegations as true (consistent with the applicable motion to dismiss standard of review), the 5th Circuit agreed that the defendant’s alleged misrepresentation was material because the ACPA’s definition of dilution specifically excludes noncommercial uses of a mark. In fact, the arbitrator explicitly relied on the lack of evidence of noncommercial use of jdate.net in its decision to transfer the domain. On this basis, the 5th Circuit reversed and remanded this ACPA claim, finding that the plaintiff pled the facts with sufficient particularity to survive the motion to dismiss.
The plaintiff also met its burden under the ACPA to proceed in seeking an order that its registration of jdate.net was not unlawful at the outset, which is determined by reviewing evidence of bad faith intent to profit from the domain name. The plaintiff alleged that it selected the “JDate” name solely to use in connection with its software product and that any similarity with the jdate.com site did not benefit the plaintiff’s marketing of its software. Further, the plaintiff alleged that although the Jewish Dating Network eventually used a portion of its site, the use was purely non-commercial and resulted in no profits. Taking the plaintiff’s allegations as true, the 5th Circuit was persuaded that the plaintiff lacked bad-faith intent and reversed and remanded this ACPA claim as well.
Practice Note: Practitioners should exercise caution in submitting UDRP-related filings, as any alteration to exhibits may be construed as misrepresentation.