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The plaintiff demonstrated a likelihood of confusion, the “famousness” of the mark, and the defendant’s bad faith, as required to prevail in an action under the Anticybersquatting Consumer Protection Act, the U.S. District Court for the Eastern District of California held May 17 in a case challenging the defendant’s offer for sale of the domain name “porschesource.com” ( Porsche Cars North America Inc. v. Spencer, E.D. Cal., No. CIV S-00-471 GEB PAN, 5/17/00). David Spencer, doing business as Spencer Associates, is the registered owner of numerous Internet domain names including Porschesource.com, Mercurysource.com, Audi-source.com, GMCsource.com, Nissansource.com, Acura-source.com, Pontiacsource.com, Lincolnsource.com, Buicksource.com, dodgesource.com. and Chrysler-source.com.The defendant registered Porschesource.com on Dec. 6, 1999. Porsche Cars North America Inc., is the registered owner of the “Porsche” mark. When it visited porschesource.com, it found a statement offering to sell numerous domain names, including porschesource.com. Although the site did not state a price for the domain names, it warned potential customers not to “embarrass yourself by attempting to give us $500 for one of these domains. They are valuable and we have already turned away many buyers that thought we weren’t serious.” It also directed readers to “[c]heck out this recent article, where WallStreet.com sold for over $1 million!” Porsche filed suit in the U.S. District Court for the Eastern District of California, asserting that the defendant’s actions constituted cyberpiracy, trademark dilution, and trademark infringement. It sought a preliminary injunction prohibiting the defendant from auctioning, offering for sale, transferring, and/or using porsche-source.com in any way. Porsche further requested that the court order the defendant to transfer the domain name to Porsche pending a resolution on the merits. PORSCHE COVERED UNDER ACPA Writing the opinion of the court, Judge Garland E. Burrell Jr. stated that a preliminary injunction will issue in a trademark action when the plaintiff demonstrates either: (1) a combination of probable success on the merits and the possibility of irreparable injury; or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in its favor. In order to establish that it is entitled to protection under the ACPA, a plaintiff must first establish that its mark is “famous” within the meaning of the statute, the court said.. “Porsche easily meets th[is] criteria — the mark is sufficiently distinctive, has been used for an extended period of time, has had millions of dollars in advertising spent on it, has been utilized in goods and channels worldwide, is widely recognized throughout the world, and there appear to be no similar marks used by third parties,” the court wrote. “Thus, the Porsche mark is ‘famous’ and is therefore entitled to the protection of the ACPA.” Under the ACPA, the suspect domain name must also — in the case of a mark that is famous at the time of the domain name’s registration — be “identical or confusingly similar to or dilutive of that mark.” Porsche asserted that it is well-established that attempts by a cyberpirate to sell domain names that contain world-famous trademarks to either the trademark holder or to third persons constitute dilution per se. “Defendant’s use of and trafficking in Porsche’s trademark in the domain name PORSCHESOURCE.COM put Porsche’s ‘name and reputation at his mercy,’” the court wrote, quoting Panavision, Int’l LP v. Toeppen, 141 F.3d 1316 (9th Cir. 1998), “by diminishing Porsche’s ability to distinguish its goods or services. … Thus, Porsche’s famous mark will likely be diluted by Defendant’s registration and trafficking in the domain name PORSCHE-SOURCE.COM.” BAD FAITH FACTORS TILT TOWARD PLAINTIFF In addition to meeting these prerequisites for entitlement to coverage under the ACPA, the court noted, Porsche had to demonstrate a likelihood that the defendant acted with a bad faith intent to profit from its mark by trafficking in the dilutive domain name. The statute lists nine factors to consider. First, the court determined that the defendant had no rights in the “Porsche” mark. The defendant asserted, however, that “from a common sense perspective,” he had interpreted the fact that porschesource.com was available for registration and that many other domain names contained the word “porsche” to mean that porschesource.com was a valid name for him to register. The court responded, quoting OHB Inc. v. Spotlight Magazine Inc., 86 F. Supp. 2d 176 (W.D.N.Y. 2000), that “‘registration of a domain name in no way trumps federal trademark law; registration does not itself confer any trademark rights on the registrant.’” In continuing its review, the court stated that the domain name obviously did not consist of the defendant’s legal name and that the defendant showed no prior use of the domain name in connection with the bona fide offering of any goods or service. “Although Defendant contends that he developed the concept of porschesource.com as a potential website address for Niello Porsche, a customer of his website design business, his actions belie this statement,” the court wrote. “Defendant’s attempt to auction off porschesource.com to the highest bidder is inconsistent with his indication that he sought only to benefit Niello Porsche. The evidence suggests instead that he sought to benefit himself.” The court also noted, however, that it was unlikely that the defendant intended to divert consumers from Porsche’s online location to the Porschesource.com location. “Although Porsche asserts that Defendant ‘hoped to sell’ the PORSCHESOURCE.COM name to ‘someone who might attempt to use the trademark Porsche to divert traffic to such web sites and away from Porsche’s own web sites,’ it is not apparent that Defendant himself intended to divert consumers,” the court wrote. And yet, the court said, “The sixth bad faith factor appears directly on point — it considers the ‘person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of goods or services, or the person’s prior conduct indicating a pattern of such conduct.’ Here, Defendant did in fact offer to ‘sell’ the domain name to the ‘mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services,” the court wrote, quoting 15 U.S.C. �1125(d)(1)(B)(i)(VI). In the defendant’s favor, the court noted that the record did not indicate that he provided misleading contact information when applying to register the domain name. But, the court stated, the defendant registered multiple domain names that he knew were identical or confusingly similar to marks of others that were distinctive or famous at the time of registration or were dilutive of those marks. Finally, the court considered the extent to which the mark incorporated in the domain name is or is not distinctive and famous within the meaning of Section 43(c)(1). Since the “Porsche” mark is famous and distinctive, this factor weighed against Defendant as well, the court said. “Thus,” the court concluded, “although two factors arguably weigh against a finding of bad faith, the majority of the factors weigh overwhelmingly in favor of a finding that Defendant likely acted with a bad faith intent to profit from Porsche’s mark. Thus, Porsche has established a strong likelihood of success on its claim that Defendant violated the ACPA.” INJUNCTION AND DEACTIVATION The court also found that Porsche’s inability to control the use of its mark will constitute irreparable injury. Comparatively, the harm the defendant risked suffering — the inability to sell the domain name during the pendency of this litigation — did not outweigh that of Porsche, the court said. For these reasons, the court granted Porsche’s motion for a preliminary injunction and enjoined David Spencer, individually and d/b/a Spencer Associates, and all other persons acting in concert with him or as his agent, from auctioning, offering for sale, transferring, and/or using in any way the domain name Porschesource.com, pending the court’s resolution of this action. The court also ordered the defendant to deactivate the website at porschesource.com and to provide proof to the court that the deactivation took place.

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