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Expanding the reach of a 1999 federal act meant to curb cybersquatting, the 4th U.S. Circuit Court of Appeals has ruled that aggrieved parties can use the act’s in rem provisions not just to stop bad-faith Internet domain name registration, but also to combat trademark infringement and dilution. The ruling, handed down in Harrods Ltd. v. Sixty Internet Domain Names, No. 00-2414, enables the filing of infringement and dilution claims against cybersquatters without obtaining personal jurisdiction over them, by going to the jurisdiction where they registered the offending domain name. Filed in a federal district court in Virginia two years ago, the case pitted Harrods Ltd., the august British retailer, against an estranged and moribund Argentinean offshoot, Harrods (Buenos Aires) Ltd. The complaint named as defendant not the Argentine entity, but 60 of the domain names that Harrods BA had registered with the Herndon, Va.-based Network Solutions Inc. (now VeriSign). The older Harrods alleged that the Argentinean company registered all 60 names in bad faith. It also accused the spinoff of infringing on, and diluting, its “Harrods” trademark, which is registered in the United States. Harrods UK elected to proceed against the names — and not Harrods BA — its attorney said, not solely because the names were registered in Virginia, but because Argentina has no comparable law. The U.S. law, formally known as the Anticybersquatting Consumer Protection Act, gives established businesses a legal remedy against fly-by-night operators that register the established entities’ likely domain names with the intent of selling those names to the expected owners for exorbitant fees. The 4th Circuit’s decision affirmed a finding by Judge Leonie Brinkema of the Eastern District of Virginia that 54 of the names were registered in bad faith. Those names, which included harrodsshopping, harrodsbank and harrodsvirtual, were all registered with the suffixes “.com,” “.net” and “.org.” Brinkema ruled the names had been forfeited and ordered that they be turned over to Harrods UK. The panel reversed Brinkema’s finding that the act did not permit Harrods UK to file its in rem infringement and dilution claims. “The court’s decision establishes a new tool,” said Harrods UK attorney Ralph A. Taylor Jr., a partner at Minneapolis’ Dorsey & Whitney. Taylor said it was previously understood that the in rem provision allowed only actions to wrest domain names from bad-faith filers. But with the new ruling, it is now possible to bring in rem infringement and dilution actions that are independent of a bad-faith claim. Pillsbury Winthrop partner Susan J. Kohlmann, who represented the domain names, declined to comment on the ruling. Rose Auslander, an intellectual property lawyer with New York’s Carter, Ledyard & Milburn, said there was no real advantage in filing an in rem dilution or infringement claim. According to her, one still must prove bad faith before winning a forfeiture order. Incorporated separately from its parent, Harrods BA opened in 1914. It soon registered “Harrods” as a trademark in Argentina, Brazil, Venezuela and other Latin American countries. Over time the two Harrods drifted apart and, in 1963, they dissolved their remaining legal ties, the 4th Circuit recounted. Noting the Latin flavor of the remaining six domain names, which included harrodsbuenosaires and harrodsargentina, Brinkema had granted summary judgment in favor of Harrods BA. Finding the grant was premature, the 4th Circuit reversed that ruling, remanding the case for further proceedings.

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