Harrison v. Microfinancial

Citation: Harrison v. Microfinancial, Inc., 74 U.S.P.Q.2d (BNA) 1848 (D. Mass. 2005).

Factual Background
Defendant Microfinancial provides financing for commercial leases through its subsidiary Leasecomm Corp. Microfinancial owns the trademark LEASECOMM and the domain names "leasecomm.com" and "leasecomm.net." Plaintiff, a retired truck driver and former police officer, attended a "business opportunity seminar" conducted by a Leasecomm affiliate that was designed to provide individuals with information on how to conduct their own business over the Internet. At the seminar, plaintiff entered into a lease agreement with Leasecomm for what he believed was certain business equipment and services. But plaintiff later learned that he received only a license to access an Internet terminal for processing credit-card payments. Plaintiff made two payments totaling about $130 and then tried to cancel the agreement. Leasecomm tried to collect additional payments from plaintiff.

Plaintiff began posting complaints about Leasecomm on Internet message boards. At the same time, the FTC and several state attorneys general were investigating claims that Leasecomm and Microfinancial's lease terms and collection practices violated consumer-protection statutes. Microfinancial eventually entered into settlement agreements with these agencies in which it agreed not to enforce certain lease terms and to stop certain collection practices, which wiped out plaintiff's future obligations under its agreement with Leasecomm.

Before conclusion of these investigations, plaintiff registered the domain name "leasecomm.org" at which he posted criticisms of Microfinancial and Leasecomm and details of his experience. Plaintiff's website later provided information on the federal and state investigations of the two companies. Microfinancial filed a UDRP Complaint with WIPO regarding the "leasecomm.org" name, and the Panelist decided in favor of Microfinancial.

Trial Court Proceedings
Plaintiff filed this suit under 15 U.S.C. §1114(2)(D)(v) to enjoin transfer of the domain name, and Microfinancial counterclaimed for cybersquatting and infringement. While the lawsuit was pending, plaintiff registered the domain name "timepayment.org," which corresponds to the name of another of Microfinancial's affiliates. The parties filed cross-motions for summary judgment on all claims and counterclaims. The court held that plaintiff engaged in cybersquatting in violation of the ACPA and that he was not entitled to the injunction he requested.

Regarding cybersquatting, the court found that plaintiff possessed the requisite bad-faith intent to profit, noting that most of the factors weighed against him. For example, plaintiff had no trademark rights in the domain name, he was not known by the name, he never used the domain name in connection with a bona fide offering of goods or services, and he registered multiple domain names that were identical or confusingly similar to defendant's marks. Nor could plaintiff "credibly argue that he did not intend to divert consumers from Microfinancial's [ website ] to his website. . . ."

Citing the PETA case, the court stated that "[s]o foreseeable was it that persons interested in contacting or learning about Leasecomm might be misled into thinking 'leasecomm.org' was the company's own address that [plaintiff's] use of it in the circumstances can only be understood as a purposeful effort to use the likely confusion as a way of getting his criticism about Leasecomm to an intended audience of the company's customers or potential customers." Moreover, the domain name "leasecomm.org" did "not signal that [plaintiff's] website contained commentary or criticism of Leasecomm, unlike the domain names that contain within them an implication of either criticism or parody."

According to the court, more important than any of these considerations was plaintiff's offer to transfer the domain name to Microfinancial "in exchange for a sum of money and other consideration valuable to [plaintiff], without having used the domain name in connection with the bona fide offering of any goods or services. . . ." Specifically, plaintiff's home page contained a link titled "My Offer to Leasecomm" below a depiction of two hands shaking (i.e., signifying an agreement). The link directed users to a page titled "Let's Deal Leasecomm," with a written offer proposing to "give" the domain to Microfinancial if it complied with his demands that Microfinancial: (1) reimburse plaintiff the $35 he paid to register the domain name, (2) "Return all of the money you've stolen over the last 15 years," and (3) "Send written letters of apology to all the victims."

In addition, plaintiff called Leasecomm's president and confronted him outside Leasecomm's offices demanding a refund of his money. Plaintiff unsuccessfully argued that his offer to exchange the domain name for compliance with his demands was "merely rhetorical and polemical." The court concluded that the evidence compelled only one conclusion &mdash; plaintiff offered to transfer the domain name as "leverage to obtain a financial benefit for himself and others." The court easily distinguished the cases relied on by plaintiff &mdash; TMI, Lucas Nursery, Mayflower Transit, and Northland &mdash; because the registrants in those cases never offered to transfer the domain names to the trademark owners.

The court instead relied on Coca-Cola v. Purdy and PETA, cases in which the registrant clearly offered to transfer the domain name to the trademark owners for financial gain or other benefits. Because plaintiff's use of the "leasecomm.org" domain name violated the ACPA, the court concluded that the First Amendment did not protect plaintiff's actions. Finally, the court found that defendant's other claims were not ripe for summary judgment.

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