DaimlerChrysler v. The Net

Citation: DaimlerChrysler v. The Net, Inc., 2004 U.S. App. LEXIS 22438 (6th Cir. Oct. 28, 2004).

Factual Background
Plaintiff automobile manufacturer owned the registered mark DODGE for automobiles. In 1994, plaintiff began using the toll-free number "1-800-4-A-DODGE" to advertise and market its products, and a year later it began using the domain name "4adodge.com" to promote its products. In 1996, defendant Maydak, then incarcerated, registered the domain "foradodge.com" through an associate. Maydak's associate registered the domain name in the name of defendant The Net Inc., but no such corporate entity existed. Defendants also registered other trademark-related domains, including "foradodge.net," "cnn.org," "espnet.com," "nasdaq.net," and "ups.net," as well as domains similar to U.S. government institutions (e.g., "doj.com," "nasa.net," "nasa.org"). Defendants claim they registered "foradodge.com" for a website that described their "dodging" services such as asset protection, tax and creditor avoidance, and ways to bypass "society's general paradigm." Nevertheless, for some time before the filing of this action, defendants pointed the "foradodge.com" domain name to a pornographic website.

District Court Proceedings
The district court granted plaintiff's motion for summary judgment on its cybersquatting claim, and the district court ordered the "foradodge.com" domain transferred to plaintiff and issued a permanent injunction. Defendants appealed.

Appellate Court Proceedings
The court of appeals affirmed. Defendants challenged the district court's finding of cybersquatting only on the issues whether 4ADODGE is a protectable trademark under the ACPA and whether defendants possessed the requisite bad-faith intent to profit when they registered the "foradodge.com" domain name. Defendants argued that plaintiff used 4ADODGE only as part of a telephone number and domain name and not as a mark.

Even if there were an issue regarding the protectability of 4ADODGE, however, the Sixth Circuit held that the district court correctly found that the "foradodge.com" name was confusingly similar to plaintiff's DODGE mark, a finding defendants did not appeal. The court of appeals noted several cases in which the courts held that the addition of minor or generic or descriptive terms to a trademark in a domain name was irrelevant.

Regarding the issue of bad faith, the court easily found that defendants registered "foradodge.com" with a bad-faith intent to profit, noting defendants' lack of any intellectual property in the domain name, the inference that defendants attempted to divert plaintiff's customers, defendants' registration of multiple trademark-related domain names, defendants' use of misleading contact information when it registered the domain name, and the highly distinctive nature and fame of the DODGE mark.

The Sixth Circuit then affirmed the lower court's decision to transfer the domain name. It rejected defendants' argument that plaintiff would not be harmed if defendants retained the domain name and used a disclaimer stating that their site was not associated with plaintiff. Defendants had no right to use a domain name that violated the ACPA, and ACPA expressly provides for transfer as a remedy.

The appeals court also found that the scope of the lower court's injunction was appropriate and not overbroad as defendants argued. The district court enjoined defendants from "using or displaying DODGE, 4ADODGE, . . . or colorable imitations thereof including . . . FORADODGE, as a business name, domain name or mark in any . . . advertisement, . . . or in any other communication."

The Sixth Circuit stated that a successful ACPA plaintiff was "entitled to an injunction that is somewhat broader than the scope of its ACPA claim in order to protect the reputation and goodwill it has established in its marks and to prevent defendants from infringing on, or otherwise harming, those marks." The injunction issued by the district court here was particularly appropriate given defendants' actions after plaintiff filed suit, including the filing of a trademark application for FORADODGE and registration of the domain name "foradodge.us."

The final claim by defendants dealt with the district court's dismissal of their third-party complaint against the United States in which they asserted that the ACPA provides for an unlawful taking without just compensation in violation of the Fifth Amendment. The Sixth Circuit affirmed the striking of this claim, stating that a taking can only occur when a permissible use is made. There was no taking here because defendants' infringing use of plaintiff's trademark was not permissible.

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