New York State Soc'y of Certified Public Accountants v. Eric Louis Associates

Citation: NewYork State Soc'y of Certified Pub. Accountants v. Eric Louis Assocs., 79 F.Supp.2d 331 (S.D.N.Y. 1999).

Factual Background
Plaintiff, a nonprofit New York-based organization for certified public accountants, used the unregistered trademark NYSSCPA since 1984 and operated a website at “nysscpa.org” since 1997. Defendant, a personnel-placement firm featuring financial and accounting professionals, registered the domain name “nysscpa.com” in January 1999 and shortly thereafter began operating a site there and used “NYSSCPA” in the site’s metatags. Defendant’s website clearly stated that it was not affiliated with plaintiff, and provided a hyperlink to plaintiff’s website. In response to plaintiff’s cease-and-desist letter, defendant offered to sell the domain name for either $20,000 or free exhibit space at plaintiff’s annual conference.

Trial Court Proceedings
Plaintiff brought suit, alleging false designation of origin and dilution. That same day, the court issued a temporary restraining order enjoining the complained-of activities. Defendant later entered into a permanent consent injunction. At issue in this decision was plaintiff’s application for an award of damages and attorney’s fees. The court initially decided that defendant’s liability on plaintiff’s claims could not be inferred from the consent injunction, and that it had to make findings of fact and draw conclusions of law regarding plaintiff’s claims to decide plaintiff’s request for monetary relief.

The court ruled in plaintiff’s favor on its false designation of origin claim, finding that the NYSSCPA mark had acquired secondary meaning and that defendant’s use of “NYSSCPA” as part of its domain name and as a metatag caused a likelihood of confusion. Although defendant posted a disclaimer such that consumers would quickly realize that defendant’s site was not plaintiff’s website, the initial-interest confusion caused by defendant allowed it to improperly benefit from plaintiff’s goodwill by diverting consumers to its site.

As to dilution, the court found that plaintiff’s mark was famous “in the accounting channel of trade in the New York trading area,” and that defendant’s use diluted the distinctiveness of plaintiff’s mark through blurring and “that a suggestion of affiliation between the [nonprofit plaintiff] and a for-profit commercial entity engaged in placing accountants would tarnish [plaintiff’s] mark to some degree.”

Lastly, the court awarded plaintiff attorney’s fees of more than $46,000 because defendant’s actions were committed in bad faith and thus constituted an “exceptional” case. Defendant’s claims of innocence were belied by its actions after receiving plaintiff’s cease-and-desist letters. Not only did defendant continue using the domain name and fail to seek advice of counsel, but it applied more pressure on plaintiff to purchase the domain name.

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