The proliferation of “gripe sites” (Internet sites maintained by consumers, public advocacy groups and others that criticize a company’s products or services) is causing trademark owners increasing concern. That concern is particularly acute when the site is identified by a domain name that contains a trademark or tradename belonging to the company criticized on the site.

Trademark owners claim that the unlicensed use of a mark in a domain name owned by a third party constitutes knowing and willful trademark infringement and dilution. On the other hand, gripe site operators claim that domain name use of the trademark is non-commercial speech protected by the First Amendment.

The arguments on both sides are compelling. A trademark is a word or symbol that identifies a single and exclusive source of origin. As Professor McCarthy notes, ” . . . a firm’s trademark is the most important element of commercial speech which is communicated to consumers. All other elements of advertising revolve around, relate to and are symbolized by the trademark.” 1

Trademarks used in domain names associated with sites critical of the trademark owner or its goods and services use the trademark owner’s most direct communication vehicle to attack the trademark owner’s goodwill. Gripe site operators claim, and courts have so far generally agreed, that although economic damage may be the intended effect of the contested domain name and related gripe site, the First Amendment protects critical commentary when there is no confusion as to source even when it involves criticism of a business.

Initially, gripe site operators used domain names that included a trademark or trade name with pejorative terms such as “sucks,” “fraud,” “deceit,” and “not.” For example, in Taubman Co. v. Webfeats, the defendant used the domain names taubmansucks.com and shopsatwillowbendsucks.com in connection with a site critical of real estate developer Alfred Taubman and his shopping centers. 2 The court refused to enjoin use of these domain names, stating:

We find that the domain name is a type of public expression, no different in scope than a billboard or a pulpit, and Mishkoff has a First Amendment right to express his opinion about Taubman, and as long as his speech is not commercially misleading, the Lanham Act cannot be summoned to prevent it. Id. at 778.

The ruling in Taubman, which has been followed by other courts, 3 led owners of famous marks to register domain names that included their marks used in association with pejoratives such as “sucks” to keep these domain names out of the hands of gripe site operators. Many of the original “sucks” gripe site domain names, however, are still owned by gripe site operators.

The continued ownership and use of “sucks” domain names by third parties damages trademark owners in two significant respects: first, the trademark owner loses control over the manner in which its mark is used and displayed, and second, the mark is associated with content that directly attacks the trademark owner’s products and/or business practices, which tends to diminish the goodwill of the mark and associated business.

The Taubman court’s analogy of a domain name and associated site to a billboard is not entirely accurate. A billboard, like a newspaper article, TV news report, or other critical commentary, has a limited life span, such as the limited lease term of the billboard or the daily news cycle. A domain name and related gripe site are continuously available on the worldwide Web for as long as the domain name owner and site operator pay the nominal fees required to maintain the domain name registration.

Further, a domain name that contains a third party trademark is instantly and continuously accessible to Internet users who search under the trademark on Yahoo, Google or other search engines. None of the cases involving third party use of trademarks in domain names associated with gripe sites has focused on the worldwide scope and continuous availability of these domain names or the importance of trademarks in search engine use in balancing the harm to the trademark owner against the public benefit arising from critical commentary.

Law on Third Party Use Is in Flux

While the law relating to use of “sucks” domain names is somewhat settled, the caselaw relating to third party use of domain names containing a famous mark in association with a gripe site is in flux. The courts in the latter cases have looked closely at the domain name itself, as well as the site content to determine whether (1) the domain name is likely to cause consumer confusion, and (2) the content on the gripe site consists of non-commercial speech.

In Coca-Cola Co. v. Purdy, the Eighth Circuit affirmed the issuance of a preliminary injunction against the use of the domain names drinkcoke.org, mycoca-cola.com, mymcdonalds.com, and mypepsi.org, notwithstanding defendant’s claims that (1) registration and use of such domain names was not likely to cause confusion with the domain names of the owners of the marks at issue, and (2) defendant’s domain names were used solely as links to his non-commercial, anti-abortion Web site abortionismurder.com and were, accordingly, protected by the First Amendment. 4

The court held that defendant’s use constituted infringement of the famous marks “Coca-Cola” and “Pepsi” and rejected his First Amendment defense, stating that the First Amendment did not protect defendant’s appropriation of famous marks to spread his protest message by confusing Internet users into believing that they had entered plaintiff’s Web sites. The record in this case contained fairly extensive evidence of actual confusion among Internet users.

The court also found that defendant’s domain names created initial interest confusion as to the sponsorship of his Web site as the presence of famous marks in the domain names implied that the trademark owners had taken a position on a hotly contested issue.

Defendant’s attachment of the domain names at issue to critical commentary sites that contained links to sites that solicited funds for the anti-abortion cause and sold related merchandise was held to violate the Anti-Cybersquatting Consumer Protection Act (ACPA) as defendant used the domain names to profit organizations of defendant’s choice. Accordingly, the linked sites were not considered completely non-commercial. The Eighth Circuit’s decision in this case is consistent with the views of Professor McCarthy, who explains that “[t]he right to disseminate criticism on the Internet cannot trump the public’s right not to be deceived by a confusingly similar domain name.” 5

In Nat’l Collegiate Athletic Ass’n v. Brown, an arbitration proceeding before the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center under the Uniform Domain Name Dispute Resolution Policy (UDRP), the arbitration panel held that defendant’s registration of ncaafootball2005.com in association with a gripe site constituted infringement of the famous mark NCAA owned by the National Collegiate Athletic Association. 6 The opinion contains an extensive discussion of the holdings in cases under the UDRP in which the First Amendment was asserted as a defense.

The panel rejected the defendant’s First Amendment defense, holding that the domain names at issue were registered in bad faith by the original registrant for the primary business purpose of selling them to the NCAA. Neither the original registrant nor the current registrant offered any explanation or evidence as to why they could not achieve their goal of operating gripe site(s) critical of the NCAA through domain names other than those at issue.

The panel’s ruling follows an earlier decision in which a WIPO panel held that the owner of a domain name for a gripe site that consists of or contains a famous mark has the burden of showing that no reasonable alternatives were available other than the use of the famous mark in the domain name in order to fully exercise rights of free speech. 7

This ruling, which is not binding on U.S. courts, 8 may provide a way out of the present conflict between rights of trademark owners and gripe site operators who use famous marks in their domain names. Given that consumers use trademarks as keywords in searching the Internet for information regarding products and companies, it seems likely that use of a famous mark in a gripe site domain name will inevitably lead to initial interest confusion. In that circumstance, the gripe site operator should bear the burden of persuasion with respect to the unauthorized, non-commercial use of a trademark in a domain name.

To date, most U.S. courts, in analyzing whether unauthorized third party use of a mark in a domain name is protected speech, have looked to whether the domain name was adopted in bad faith as defined under the ACPA, 15 U.S.C. �1125(d)(1)(A), and whether the domain name is used in association with a site that involves direct commercial activities or is linked to commercial activities. Thus far, no U.S. court has adopted the WIPO standard that requires the gripe site operator to show that no reasonable alternative exists other than use of the third party mark to fully exercise free speech rights.

Applying the ACPA

The decision in Lucas Nursery & Landscaping, Inc. v. Grosse provides a thorough analysis of the application of the ACPA to a defendant’s use of a domain name containing plaintiff’s tradename for a gripe site. 9

In Lucas, a consumer dissatisfied with plaintiff’s landscaping services registered the domain name lucasnursery.com for a Web site critical of plaintiff’s services. Plaintiff, which did not own a domain name that included its trade name and did not operate a Web site of any kind, sued under the ACPA claiming that defendant Grosse registered the lucasnursery.com domain name in bad faith.

Under the ACPA, a cybersquatter is potentially liable to a trademark owner if that person:

(i) has a bad faith intent to profit from that mark . . . ; and

(ii) registers, traffics in, or uses a domain name that �

(I) in the case of a mark that is distinctive . . . , is identical or confusingly similar to that mark;

(II) in the case of a famous mark . . . , is identical or confusingly similar to or dilutive of that mark; or

(III) is a trademark, word, or name protected by reason of section 706 of title 18, United States Code, or section 220506 of title 36, United States Code.

In determining what constitutes “bad faith” for the purposes of the ACPA, courts look at nine “bad faith” factors, the first four of which mitigate against a finding of bad faith by providing a reasonable basis for why the defendant might have registered a domain name that includes the mark of another:

(1) whether the defendant has trademark or other rights in the domain name;

(2) the extent to which the domain name consists of defendant’s personal or corporate name;

(3) any prior use of the domain name for the offering of goods and services; and

(4) the bona fide non-commercial use of the site.

The court in Lucas applied the foregoing “bad faith” factors and found that Grosse’s registration and use of the “lucasnursery.com” domain name was not a violation of the ACPA because: (1) plaintiff, Lucas Nursery, had no Web site from which consumers would be diverted, (2) Grosse did not seek to mislead consumers as to the source of the site, (3) the site stated that its purpose was to inform consumers with respect to Grosse’s experience with Lucas Nursery, and (4) Grosse never tried to sell the domain name to Lucas.

The Sixth Circuit affirmed the district court’s grant of summary judgment in favor of Grosse, stating that Grosse acted in good faith to inform other consumers of her experience with Lucas that is not inconsistent with the goals of the ACPA, namely to protect consumers “from slick internet peddlers who trade on the names and reputations of established brands.” 10

A similar result was reached in Bosley Med. Inst., Inc. v. Kremer in which Kremer, a dissatisfied hair transplant patient whose medical malpractice claims had been dismissed, registered the domain names bosleymedical.com and bosleymedicalviolations.com. Kremer sent a letter to Bosley Medical and later allegedly sent letters to some of Bosley’s affiliated physicians threatening publication of derogatory information on Web sites located at the “bosleymedical” domain names he had registered.

When Kremer’s demands for payment were not met, he began operating critical Web sites at his “bosleymedical” domain names. Bosley Medical brought a WIPO UDRP proceeding against Kremer.

The WIPO panel found in Kremer’s favor, holding that the domain names were not registered for a commercial purpose and that Bosley Medical instituted the proceedings for the purpose of “squelching” Kremer’s negative comments. Bosley Medical then sued Kremer for conspiracy, trademark infringement, dilution, unfair competition, libel and actual malice.

Both parties filed motions for summary judgment and the court ruled that there was no likelihood of confusion between Bosley Medical’s Web site at bosley.com and Kremer’s “bosleymedical” gripe sites. The court expressly found that Kremer’s “desire to undermine Bosley’s business and his use of Bosley’s marks to further that agenda” do not constitute commercial use of Bosley’s trademarks. 11 The court also found no likelihood of confusion as Kremer’s sites each contained prominent disclaimers with a link to Bosley Medical’s site. Use of disclaimers has long been disfavored by courts and commentators on trademark law as a means of avoiding confusion. 12

In Between on the Bad Faith Scale

The decision in Nissan Motor Co. v. Nissan Computer Corp. falls between Bosley and Coca-Cola Co. v. Purdy on the bad faith scale. 13

Defendant Nissan Computer was founded in 1991 by an individual whose legal name is “Uzi Nissan.” Nissan Computer registered the domain name nissan.com in 1994. In 1995, plaintiff Nissan Motor sent defendant a letter expressing concern regarding the use of “Nissan” in its domain name. Nissan Computer did not respond and Nissan Motor failed to pursue the matter.

In August 1999, Nissan Computer altered its site to sell advertising and created links to Barnes & Noble, Cnet.com and other sites. Automobile-related ads appeared on the site in the fall of 1999. Plaintiff, Nissan Motor, objected and, when defendant refused to sell the nissan.com domain name, filed suit for trademark infringement, unfair competition and dilution.

The district court refused to grant an injunction prohibiting defendant’s use of the domain name nissan.com, but enjoined defendant from placing any commercial advertisement on the site or placing links to other Web sites containing disparaging remarks or negative commentary about Nissan Motor.

On appeal, the Ninth Circuit held that initial interest confusion among Internet consumers existed as a matter of law with respect to Nissan Computer’s automobile-related advertising on “nissan.com” because the mark “Nissan” for automobiles captures the attention of consumers interested in Nissan vehicles, but that Nissan Motor was not entitled to injunctive relief as to other advertising on the nissan.com site. The Ninth Circuit also held that the injunction against defendant’s use of nissan.com in connection with links to sites with disparaging or negative commentary about Nissan Motor was a “content-based restriction on non-commercial speech that is inconsistent with the First Amendment.” 14

In deciding Nissan, the Ninth Circuit relied upon the Fourth Circuit’s decision in CPC Int’l, Inc. v. Skippy Inc., in which the court vacated the grant of an injunction ordering removal of material critical of CPC International, the maker of Skippy peanut butter, as well as Skippy peanut butter itself from the skippy.com site hosted by the owner of the trademark SKIPPY for a cartoon comic strip. 15 The Fourth Circuit commented that it is important that “trademarks not be ‘transformed from rights against unfair competition to rights to control language,’ ” and held that the speech at issue on the skippy.com site was protected informational speech, not commercial speech. 16

Conclusions

In the absence of deception or bad faith, the caselaw indicates that registration and use of a domain name that includes a mark owned by a third party in connection with a non-commercial gripe site is likely not actionable.

This conclusion is troubling to owners of valuable trademarks and their lawyers, whose responsibility is to police and protect these assets. If a trademark is, as Professor McCarthy states, a company’s best and most informative advertising vehicle, unauthorized third party use of a mark as part of a domain name, even in connection with a non-commercial gripe site, is likely to result in initial interest confusion among consumers. That confusion harms the public and the trademark owner.

The facile approach of using disclaimers on the gripe sites to address confusion engendered by use of a third party mark in the domain name for the site does not address the issue of initial interest confusion and, in any event, the disclaimer may not be read or understood by consumers as they quickly surf the Internet. The unauthorized use also causes dilution and, depending on the content of the site, tarnishment of the trademark.

Accordingly, it seems reasonable, given the tension between the trademark owner’s property right and the gripe site operator’s free speech right, to require the gripe site operator to show that no reasonable alternative exists other than use of the mark in the domain name to fully exercise his free speech rights.

Taubman Co. v. WebfeatsBosley Med. Inst., Inc. v. KremerCoca-Cola Co. v. PurdyNat’l Collegiate Athletic Ass’n v. BrownUniversal City Studios, Inc. v. David Burns and Adam-12 Dot ComNovak v. Overture Servs., Inc.Lucas Nursery & Landscaping, Inc. v. GrosseBosleyHome Box Office, Inc. v. Showtime/The Movie Channel Inc.Charles of the Ritz Group Ltd. v. Quality King Distributors, Inc.University of Georgia Athletic Association v. LaiteUnited States Jaycees v. Philadelphia JayceesRoss Cosmetics Distribution Centers, Inc. v. United StatesNissan Motor Co. v. Nissan Computer Corp.CPC Int’l, Inc. v. Skippy Inc.Hey, You, Get Off of My Trademark!

Owners continue to battle gripe site operators, not always with great success.

Virginia R. Richard is a partner and the head of the IP department in the New York office of Winston & Strawn.

Endnotes:

1. 5 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION (“MCCARTHY”) �31:139 (4th ed. 2004).

2. Taubman Co. v. Webfeats, 319 F.3d 770 (6th Cir. 2003).

3. See Bosley Med. Inst., Inc. v. Kremer, 2004 U.S. Dist. LEXIS 8336 (S.D. Cal. Apr. 29, 2004).

4. Coca-Cola Co. v. Purdy, 382 F.3d 774 (8th Cir. 2004).

5. MCCARTHY, �25:76.

6. Nat’l Collegiate Athletic Ass’n v. Brown, 72 U.S.P.Q.2d 1319, WIPO Case No. D2004-0491 (Aug. 30, 2004).

7. Universal City Studios, Inc. v. David Burns and Adam-12 Dot Com, WIPO Case No. D2001-0784 (Oct. 1, 2001).

8. See Novak v. Overture Servs., Inc., 309 F. Supp. 2d 446, 458 (E.D.N.Y. 2004) (stating that an administrative panel decision rendered by the WIPO carries no precedential weight).

9. Lucas Nursery & Landscaping, Inc. v. Grosse, 359 F.3d 806 (6th Cir. 2004).

10. Id. at 811.

11. Bosley, 2004 U.S. Dist. LEXIS 8336, *24.

12. See Home Box Office, Inc. v. Showtime/The Movie Channel Inc., 832 F.2d 1311 (2d Cir. 1987); Charles of the Ritz Group Ltd. v. Quality King Distributors, Inc., 832 F.2d 1317 (2d Cir. 1987); University of Georgia Athletic Association v. Laite, 756 F.2d 1535 (11th Cir. 1985); United States Jaycees v. Philadelphia Jaycees, 639 F.2d 134 (3d. Cir. 1981); Ross Cosmetics Distribution Centers, Inc. v. United States, 18 C.I.T. 979 (CIT 1994); Jacoby & Raskoff, Disclaimers as a Remedy for Trademark Infringement Litigation: More Trouble Than They Are Worth?, 76 Trademark Rept. 35 (1986); Radin, Disclaimers as a Remedy for Trademark Infringement: Inadequacies and Alternatives, 76 Trademark Rept. 59 (1986); 2 H. NIMS, UNFAIR COMPETITION AND TRADEMARKS ��366f, 379a (4th ed. 1947).

13. Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004).

14. 378 F.3d at 1007.

15. CPC Int’l, Inc. v. Skippy Inc., 214 F.3d 456 (4th Cir. 2000).

16. Id. at 462 (quoting Mark A. Lemley, The Modern Lanham Act and the Death of Common Sense, 108 Yale L.J. 1687, 1710-11 (1999).