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The U.S. Supreme Court will not review a ruling by the 2nd U.S. Circuit Court of Appeals finding a domain name holder guilty of bad faith under the Anti-Cybersquatting Consumer Protection Act (ACPA), but declining to award damages to a trademark holder. ( Sporty’s Farm v. Sportsman’s Market, No. 99-1752). In an order issued June 26, the high court denied a petition by Sporty’s Farm for review of the 2nd Circuit’s ruling, the first by a federal appeals court under the ACPA. Sporty’s Farm filed an action for declaratory relief in 1996 against Sportsman’s Market Inc. over rights to the “sportys.com” domain name. Sportsman’s counterclaimed, contending that it has used “Sporty’s” for years in its mail order sales of aviation equipment, tools and home accessories. Sportsman’s contended that third-party defendant Omega Engineering Inc. was a competitor which began using the domain name “sportys.com” in 1996 before transferring it to its subsidiary. TRADEMARK DILUTION The action originally involved the application of the Federal Trademark Dilution Act (FTDA). The U.S. District Court for the District of Connecticut rejected Sportsman’s trademark infringement claim, finding little likelihood of confusion in the marketplace. But the court found for Sportsman’s on trademark dilution. The court concluded that “Sporty’s” was a famous mark entitled to protection and that registration of a similar domain name diluted the mark. The District Court ordered the domain name reassigned to Sportsman’s but declined to award punitive damages, disgorgement of profits or fees because Omega’s and Sporty’s Farm’s conduct was not willful. BAD FAITH Congress passed the ACPA while the case was on appeal and the 2nd Circuit applied it after asking for additional briefing from the parties. After agreeing that the mark “Sporty’s” is distinctive under the ACPA, the 2nd Circuit concluded that “sportys.com” is “confusingly similar” in violation of the act. The court then concluded that use of the domain name was a bad faith intent to profit from the use of a mark. The court found that neither Omega nor Sporty’s Farm had any intellectual rights to the “Sporty’s” name, that it is not the name of the party that registered it, and that it was not used until after the litigation began. The court also found that the mark was sold to Sporty’s Farm “under suspicious circumstances” by a company that the lower court found was planning to enter into direct competition with Sportsman’s. NO DAMAGES Despite that bad faith finding, the Second Circuit declined to order damages. The ACPA’s statutory remedies were not available because the act was not in effect at the time the domain was registered, the court said. Nor can Sportsman’s seek damages under the FTDA absent a showing of willful intent to dilute, the court found. The District Court made no such finding and its decision can only be overturned on a finding of clear error, the court concluded. Sportsman’s Market was represented by James Sicilian (who argued) and Peter M. Holland of Day, Berry & Howard of Hartford, Conn., and General Counsel William H. Anderson of Batavia, Ohio. Sporty’s Farm and Omega were represented by James R. Fogarty of Kirlin, Fogarty, Cohen, Selby & Nemiroff of Greenwich, Conn. (who argued), and W. James Cousins of McGowan & Cousins of Wilton, Conn. �; Copyright 2000 Mealey Publications, Inc.

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