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Jurisdictional limitations for actions brought to stop cybersquatting of registered Internet domain names have been upheld by the 2nd U.S. Circuit Court of Appeals. Deciding a case of first impression in the circuit, the court said the “basic jurisdictional grant” in the Anticybersquatting Consumer Protection Act of 1999 (ACPA) “contemplates exclusively a judicial district within which the registrar or other domain-name authority is located.” “A plaintiff must initiate an in rem action by filing a complaint in that judicial district and no other,” 2nd Circuit Judge Sonia Sotomayor said in Mattel, Inc. v. Barbie-Club.com, 01-7680. The 2nd Circuit upheld Southern District Judge Denise Cote’s dismissal of an action brought by Mattel, the owners of the Barbie doll, Matchbox and Hot Wheels trademarks, against 57 Internet sites that allegedly sought to “cybersquat” on those trademarks by registering their domain names in other jurisdictions. Mattel sought to invoke the anti-cybersquatting statute, which was passed by Congress in response to bad-faith registration of domain names by parties who have no connection to the original product and are merely trying to capitalize on the trademark’s fame or force the trademark owner to pay for the domain name. Because Mattel could not obtain personal jurisdiction over the defendants, it sought to invoke the in rem jurisdiction of the court as provided for by the statute, 15 U.S.C. � 1125(d). Section 1125(d)(2) states that the owner of a trademark may file an in rem action against a domain name “in the judicial district in which the registrar, registry, or other domain-name authority that registered or assigned the disputed domain name is located.” But the debate before the 2nd Circuit concerned the depositing of “registrar’s certificates” with the Southern District. Subsection 1125(d)(2)(c)(ii) of the statute contemplates that rather than have disinterested domain registration authorities become embroiled in litigation over the ownership of domain names, the registrars simply deposit the certificate in the relevant court and leave the parties to fight it out themselves. The defendants argued, and Judge Cote agreed, that subsection (d)(2)(A) provides the only basis for in rem jurisdiction under the statute. An in rem action is instituted “against the thing” as opposed to against a specific person, or “in personam,” and seeks to assert a property right that is equally binding on everyone. But Mattel argued that subsection (d)(2)(c)(ii), which lays out the procedure for the deposit of registrar’s certificates, provides an additional basis for in rem jurisdiction. With most of the 57 contested domain names registered in states other than New York, Mattel contended that the provision allowing certificates to be deposited in any court made jurisdiction proper in the Southern District of New York. HOME JUDICIAL DISTRICT But Judge Sotomayor said the language, structure and legislative history of the anti-cybersquatting statute showed that subsection (d)(2)(A) mandates that the home judicial district where the domain name is registered is the only place where in rem jurisdiction can exist. “It would be odd for Congress to have taken pains to enact subsection (d)(2)(A) with its specific procedure for filing an in rem action ‘in the judicial district in which the domain registrar … is located,’ only to qualify, and indeed nullify, that circumscribed requirement by effectively creating nationwide in rem jurisdiction in subsection (d)(2)(C),” she said. Sotomayor said that Congress, in passing subsection (d)(2)(a), “plainly sought to allay concerns that the ACPA’s in rem jurisdiction might offend due process or principles of international comity.” The subsection, she said, “still requires a nexus” between the property and the location of registry that is not met by “domain-name documentation alone. … “Rather, it is the presence of the domain name itself … in the judicial district in which the registry or registrar is located that anchors the in rem action and satisfies due process and international comity,” she said. Judges Jose Cabranes and Chester J. Straub joined in the opinion. William Dunnegan of New York’s Perkins & Dunnegan represented Mattel. Michael Aschen of New York’s Abelman, Frayne & Schwab represented the defendants.

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