Heathmount v. Technodome.com

Citation: Heathmount A.E. Corp. v. Technodome.com, 106 F.Supp.2d 860, 55 U.S.P.Q.2d (BNA) 1735 (E.D. Va. 2000) (plaintiff's motion for service), 60 U.S.P.Q.2d (BNA) 2018 (E.D. Va. 2000) (defendant's motion to dismiss), 22 Fed. Appx. 344 (4th Cir. 2002) (defendant's interlocutory appeal).

Trial Court Proceedings
In a case of first impression, the court addressed the nature of a plaintiff's burden to prove the "absence" of personal jurisdiction necessary to proceed in rem under the ACPA under 15 U.S.C. §1125(d)(2)(A)(ii)(I) ("Subpart I"). To avoid the disincentive of plaintiffs to "cull information that might establish the presence of personal jurisdiction," the court held that once the domain-name registrant or its current owner has been identified "[t]he plaintiff shall then bear the burden to demonstrate some indicia of due diligence in trying to establish personal jurisdiction over an individual who has been identified as a potential defendant but is not subject to jurisdiction."

The court likened this due-diligence requirement to that required under 15 U.S.C. §1125(d)(2)(A)(ii)(II) ("Subpart II"), which applies to situations where a plaintiff cannot locate a domain-name owner (e.g., the registrant supplied false contact information to the registrar). In this case, plaintiff asserted that (a) the owner of the defendant domain names was a Canadian resident whose only contact with the United States was his registration of those domain names with NSI, (b) it contacted the domain-name owner on several occasions in an attempt to gather information to resolve the dispute, and (c) during a UDRP proceeding brought by plaintiff, the domain-name owner denied being subject to personal jurisdiction in Virginia. Under these circumstances, the court found that plaintiff had exercised the requisite due diligence in attempting to uncover information about the domain-name owner. Following the decision in America Online v. Huang approximately two weeks earlier, the court held that the mere registration of a domain name was not sufficient to establish personal jurisdiction over the domain-name registrant in the state where the registrar is located.

Relying on the legislative history of the in rem statute, the court concluded that Congress intended subpart (I) to reach domain names owned by individuals whose only contact with the forum state is the registration of the defendant domain name. If the mere registration of a domain name was sufficient to establish personal jurisdiction over the registrant in the state where the registrar is located, it would eliminate the need for an in rem proceeding against registrants amenable to process. Subpart (I) would reach only residents of foreign countries with which the United States has no international service agreement. In sum, the court found that subpart (I) was intended to apply to all domain-name registrants whose only contact with the United States is a registration agreement with NSI or other domain-name registrar.

After determining that plaintiff could proceed in rem, the court addressed plaintiff's motions to provide notice of the in rem action. To determine the type of notice required under subpart (I), the court looked to Fed. R. Civ. P. 4(n). Because the in rem statute does not specify the notice to be given to claimants of the property, Rule 4(n) requires that notice must be made by service of a summons under Rule 4. Rule 4(f) permits service on foreign individuals in certain matters. The court thus approved (1) plaintiff's requests to give notice by personal service because Canada is a signatory to the Hague Convention and permits service of process on the individual, and (2) plaintiff's request that the domain-name registrant be given 20 days to appear or plead.

Defendant filed a motion to dismiss the case on the ground that the ACPA was unconstitutional and on the ground of forum non conveniens and international comity. The court denied defendant's motion on all grounds. Regarding constitutionally, defendant argued that it had no links to the United States except registering the two domain names at issue, such that exercising jurisdiction would violate due process.

The due-process requirements of personal jurisdiction, however, did not restrict the court's power over the challenged property in an in rem action. In particular, personal jurisdiction over the registrant was not necessary to assess a registrant's alleged bad faith. Finally, defendant's inability to show that it would "literally be financially impossible to litigate in this District" or that witnesses and documents would be "entirely unavailable here," was fatal to defendant's argument of forum non conveniens. Moreover, Canadian courts would be less familiar with the ACPA, and plaintiff might face difficulties in enforcing a Canadian court judgment in the United States.

Although the UDRP provides the same remedy as an in rem action—transfer of the domain name—it was "not an adequate substitute" for plaintiff's ACPA claim because UDRP proceedings lack the procedural safeguards provided by a court proceeding and a UDRP action lacks the enforcement power of the court system. The district court certified the case for interlocutory appeal, and the Fourth Circuit granted the petition to appeal.

Appellate Court Proceedings
On January 10, 2002, the Fourth Circuit dismissed defendant's interlocutory appeal of the district court's denial of its motion to dismiss as moot. Plaintiff moved to dismiss defendant's appeal as moot because it had abandoned the trademarks it asserted in its suit, but the appeal court denied it. The appeals court dismissed the appeal, however, when it learned that plaintiff dismissed its complaint under Fed. R. Civ. P. 41(a)(1) before defendants filed an answer. Accordingly, upon remand the district court was required to dismiss the action.

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