Hartog & Co. v. Swix.com

Citation: Hartog & Co. AS v. Swix.com, 136 F. Supp. 2d 531 (E.D. Va. 2001).

Factual Background
Plaintiff, a Norwegian company and owner of the registered mark SWIX for ski waxes, used the mark SWIX in the United States for more than 50 years and enjoyed 60-70% of the United States ski-wax market. Swix Internet, a Swiss ISP, used the company name Swix since 1995, registered the mark SWIX in Switzerland in 1996, and registered the domain name "swix.com" and "swix.net" in 1996. Shortly after Swix Internet registered its domain names in 1996, plaintiff requested Swix Internet to transfer them to plaintiff, but Swix refused.

Trial Court Proceedings
More than three years later, plaintiff filed this suit against Swix. But because plaintiff could not obtain personal jurisdiction over Swix Internet, it amended its complaint to dismiss Swix Internet and assert an in rem action under the ACPA against the two domain names as well as claims for federal trademark infringement, unfair competition, and dilution. Following the granting of a defense motion to dismiss all claims except for the ACPA claim, a nonjury trial was held before a magistrate judge. Initially, the court addressed whether the "confusingly similar" standard found in the ACPA was the same as found in traditional Lanham Act claims. Consistent with in personam ACPA decisions in Sporty's Farm and Northern Light Technology, the court held that the traditional likelihood-of-confusion analysis was not appropriate in in rem actions, i.e., there was no need to show that the domain names at issue were likely to cause confusion. To require otherwise would "largely undermine Congress's goal of stopping individuals who own domain names that approximate distinctive marks but do not actively use the domain names other than to make them available for sale."

Applying this standard, the domain names "swix.com" and "swix.net" were found to be confusingly similar to plaintiff's mark SWIX. Plaintiff was not entitled to relief for dilution, however, because its popularity in a niche market was not sufficient to render it famous under the FTDA. According to the court, niche-market fame was sufficient only in cases where the allegedly diluting use was "directed toward the same market." Even assuming plaintiff's mark was famous, plaintiff failed to establish that the defendant domain names blurred or tarnished plaintiff's mark. Finally, even if plaintiff could establish dilution, its ACPA claim must fail because Swix Internet did not act in bad faith when it registered the domain names.

In addition, Swix Internet "believed and had reasonable grounds to believe that the use of [its] domain name[s] was a fair use or lawful" under ACPA's safe-harbor provision. Specifically, Swix Internet registered SWIX as a trademark in Switzerland without opposition for use in a legitimate business, and the domain names were "based on the mark and integral to the business."

This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the GNU Free Documentation License.