Bosley Medical v. Kremer

Citation: Bosley Medical Inst. v. Kremer, 2004 U.S. Dist. LEXIS 8336 (S.D. Cal. Apr. 29, 2004), aff'd in part and rev'd in part, 403 F.3d 672 (9th Cir. 2005).

Factual Background
Plaintiff is a medical institute providing hair transplantation and restoration services. Defendant is a dissatisfied former patient. After the court dismissed defendant's medical malpractice suit against plaintiff, defendant sent a letter to plaintiff in May 1999 demanding $400,000 to "prevent the possibility of [defendant] being brought down." A few months later, defendant registered the domain name "bosleymedical.com" and sent a letter to plaintiff in January 2000 threatening to criticize plaintiff on the Internet. A year later, defendant registered the domain name "bosleymedicalviolations.com." He also allegedly sent letters in November 2001 to doctors affiliated with plaintiff threatening to publish critical information at his two websites. Defendant ultimately displayed content on his websites that was critical of plaintiff, including descriptions of various government investigations and medical-board disciplinary actions against plaintiff. Both sites prominently disclaimed any affiliation with plaintiff and provided a link to plaintiff's website. In smaller print on the sites, defendant stated that his sites were "non-profit" and "non-commercial." Before filing this suit, plaintiff filed a UDRP complaint against defendant on both names, but the UDRP panel found for defendant, concluding that defendant did not register them for a commercial purpose and that plaintiff filed the UDRP complaint to "squelch" defendant's critical commentary.

Trial Court Proceedings
Following the UDRP proceeding, plaintiff filed this action alleging cybersquatting, infringement, dilution, and unfair competition under the Lanham Act, among other claims. The court granted defendant's motion for summary judgment on all of plaintiff's Lanham Act claims because defendant's actions were "purely noncommercial" and/or were not likely to cause confusion.

Regarding commercial use, the court initially distinguished this case from Nissan Motor Corp. v. Nissan Computer Corp., which enjoined the defendant from posting critical content at the domain names "nissan.com" and "nissan.net" because that critical commentary "would exploit [Nissan Motor's] good will" that "ensures a steady stream of visitors expecting to find Nissan Motor at nissan.com and nissan.net." The Nissan court believed that "under these circumstances, the critical speech becomes commercial and is subject to the [ FTDA ]." The court here, however, agreed with defendant that the Nissan court's analysis was "flawed" because it "combined the commercial use analysis with the element of likelihood of confusion."

The court next rejected plaintiff's reliance on Planned Parenthood v. Bucci]. Even if defendant intended to harm plaintiff's economic interests, defendant's use was still not commercial because his criticism was protected [[First Amendment expression. The court also rejected plaintiff's argument that defendant's websites were commercial because they contained links to discussion-group websites about baldness, which in turn contained links to commercial sites. The commercial content on these third-party sites was "one-step removed" from defendant's sites and insufficient to render defendant's sites commercial.

Finally, the court disagreed with plaintiff that defendant's letters constituted a commercial use as an attempt to extort money from plaintiff. Although the 2000 letter mentioned use of the Internet, it neither made any mention of defendant's websites or domain names nor made any offer to sell the domains in return for not publishing any derogatory statements. And plaintiff submitted no evidence that defendant actually sent the November 2001 letters.

Turning to likelihood of confusion, the court adopted the Sixth Circuit's reasoning in Taubman to hold that defendant's prominent disclaimer and link to plaintiff's actual site, coupled with the obvious pejorative content of defendant's sites, would "immediately alert a visitor to the sites that he had not accessed [plaintiff's] official site." And any users mistakenly reaching defendant's sites need "only to click upon the 'www.bosley.com' portion of the disclaimer to connect to Bosley's official site." Finally, defendant successfully moved to strike plaintiff's state-law claims under the California anti-SLAPP statute ("Strategic Lawsuit Against Public Participation"), which allows defendants to strike civil actions "brought primarily to chill the exercise of free speech."

Appellate Court Proceedings
On appeal, the Ninth Circuit affirmed the grant of summary judgment in Kremer's favor regarding the infringement and dilution claims. The appeals court first examined the commercial use requirements of 15 U.S.C. §1114 for infringement ("use in commerce . . . in connection with the sale, offering for sale, distribution, or advertising of any goods or services . . . . ") and 15 U.S.C. §1125(c)(1) for dilution ("another person's commercial use in commerce of a mark . . . . ").

Although the meaning of the wording "commercial use in commerce" in the dilution statute was unclear, the Ninth Circuit has interpreted it to be "roughly analogous" to the "in connection with the sale . . . of" goods and services requirement of the infringement statute. The critical question for determining whether Kremer's use was noncommercial was thus whether his "use of Bosley Medical as his domain name was 'in connection with a sale of goods or services.'"

Bosley argued that it satisfied the commercial use requirement in three ways. First, relying on Nissan, Bosley argued that Kremer's website was commercial due to the presence of commercial links not on Kremer's website but on linked sites. Bosley's reliance on Nissan, however, was "unfounded" because the defendant had links to commercial businesses directly on the disputed website. Here, Kremer's site had no commercial links. Rather, it contained links to a discussion group that in turn contained advertising. According to the Ninth Circuit, "[t]his roundabout path to the advertising of others is too attenuated to render Kremer's site commercial." Nor did a link to the website of Kremer's public interest lawyers, Public Citizen Litigation Group, render his site commercial.

Second, Bosley argued that Kremer created his website as part of an "extortion scheme" to profit from Bosley's mark. But there was no evidence that Kremer was trying to sell the domain name. Although Kremer's letter threatened to expose negative information about Bosley on the Internet, it made no references to "ransoming" Bosley's mark or even using it as a domain name.

Third, relying on PETA, Bosley argued that Kremer's domain name prevented Internet users from obtaining Bosley's services. The Ninth Circuit initially distinguished PETA by noting that the defendant's site in PETA had links to more than 30 commercial businesses. Moreover, assuming the PETA court held that commercial use occurs when a domain name "deter[s] customers from reaching the plaintiff's site," the Ninth Circuit disagreed with that rationale. The Ninth Circuit believed that the appropriate inquiry was "whether Kremer offers competing services to the public." In this case, however, Kremer was not Bosley's competition but rather a critic of Bosley, i.e., Kremer used Bosley's mark "in connection with the expression of his opinion about Bosley's goods and services."

In short, "[t]he dangers that the Lanham Act was designed to address are simply not at issue here." Specifically, consumers cannot mistakenly purchase a competing product from Kremer believing it to be from Kremer, and Kremer is not capitalizing on the goodwill of Bosley's mark. Because Kremer's criticism of Bosley is not a harm the Lanham Act was designed to address, "Bosley cannot use the Lanham Act either as a shield from Kremer's criticism, or as a sword to shut Kremer up."

The Ninth Circuit reversed summary judgment on the ACPA claim because the district court erroneously read a "commercial use" requirement into ACPA. Moreover, the ACPA claim was not even before the district court in the motions for summary judgment. Because Bosley had no notice that the district court would rule on the ACPA claim, it did not have an opportunity to conduct discovery on the issue. The Ninth Circuit thus remanded the ACPA claim, noting that "[i]t remains to be seen whether Bosley can establish that Kremer registered the domain name in bad faith or can authenticate other letters that Bosley alleges were written and sent by Kremer."

Trial Court Proceedings on Remand
On remand, defendant filed motions to dismiss plaintiff's state trademark claims and for summary judgment on the ACPA claim. The court denied defendant's motion to dismiss because plaintiff's allegations in its amended complaint adequately alleged claims for common law trademark infringement, state statutory dilution, and state statutory unfair business practices.

The court also rejected defendant's contention that the First Amendment protected his use and registration of "bosleymedical.com" as a matter of law and barred plaintiff's state law claims. It noted the Ninth Circuit's decision in this case holding that an infringement suit over a domain name "does not necessarily impair the defendant's free speech rights" and its recognition that "a significant purpose of a domain name is to identify the entity that owns the website."

The district court agreed with the Ninth Circuit that "the appropriate inquiry is one that fully addresses particular circumstances with respect to each domain name," such that defendant's motion to dismiss was not appropriate at this time. Regarding cybersquatting, defendant argued that there was no evidence that it registered the "bosleymedical.com" domain name with a bad-faith intent to profit or that it attempted to extort money from plaintiff by registering the domain name.

Alternatively, defendant argued that it satisfied ACPA's safe-harbor provision. The court denied defendant's motion for summary judgment because plaintiff did not have adequate time to take discovery to develop its case.

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