Coca-Cola v. Purdy

Citation: Coca-Cola Co. v. Purdy, 2002 U.S. Dist. LEXIS 13443, 2002 WL 1634277 (D. Minn. July 23, 2002) (motion for preliminary injunction), aff’d, 382 F.3d 774 (8th Cir. 2004).

Factual Background
Plaintiffs, owners of the famous marks COKE, PEPSI, MCDONALD’S, and WASHINGTON POST, sued defendant who had registered numerous domain names incorporating plaintiffs’ marks, including “drinkcoke.org,” “mypepsi.org,” “mymcdonalds.com,” and “washingtonpostsays.com.” Defendant linked these names to a website at “abortionismurder.com,” which displayed graphic images of aborted and dismembered fetuses on its home page, and provided antiabortion commentary as well as links to sites selling antiabortion merchandise. The “abortionismurder.com” site contained no references to plaintiffs or their supposed positions (if any) on abortion.

In addition, for a short time, defendant linked the names “my-washingtonpost.com” and “drinkcoke.org” to websites that appeared to be a front page of the actual washingtonpost.com website, which featured the headline “The Washington Post proclaims ‘Abortion is Murder’” and contained graphic images of aborted fetuses next to the Coca-Cola trademark and the words “Things Don’t Always Go Better With Coke. Abortion is Murder – The Real Thing.” Defendant also linked many of the domain names to his own websites containing additional graphic images of aborted fetuses, links to “abortionismurder.com,” and statements that plaintiffs supported abortion. In response to plaintiffs’ cease-and-desist letters, defendant claimed his actions were protected by the First Amendment and refused to comply with plaintiffs’ requests.

Trial Court Proceedings
Plaintiffs successfully moved for an emergency temporary restraining order and preliminary injunction based on violations of the ACPA. The district court held that defendants had a bad-faith intent to profit from plaintiffs’ trademarks through his use of confusingly similar domain names that diluted and tarnished plaintiffs’ marks. The court enjoined defendant from using: (1) the domain names at issue and (2) any domain names that contain plaintiffs’ marks or confusingly similar marks and that do “not alert the unwary Internet user to the protest or critical commentary of the attached website within the language of the domain name itself.” The court also ordered defendants to transfer the domain names to the appropriate plaintiffs within three days of the court’s order.

Shortly after the district court entered the injunction, defendant continued to register infringing domain names. At plaintiffs’ request, the district court amended the injunction to cover any “infringing names” to presumably broaden the injunction. Despite this amended injunction, defendant registered at least 60 other domain names incorporating plaintiffs’ marks (e.g., “lovemcdonalds.com,” “gopepsi.org,” and “ilovethewashingtonpost.com”). Defendant even wrote to plaintiffs’ counsel that he was “continuing to register domain names at an exciting pace.” A week later, Washington Post Newsweek Interactive (WPNI), a subsidiary of plaintiff The Washington Post, learned that defendant registered the domain “wpni.org” and linked it to an antiabortion website. Moreover, defendant received a number of email messages intended for employees of WPNI. Defendant called several WPNI employees directly and read them the content of their private emails. Defendant also threatened to publish the e-mails on the Internet unless plaintiffs dropped this lawsuit and allowed him access to write an editorial in The Washington Post.

The district court issued a second temporary restraining order and preliminary injunction, this one ordering transfer of the “wpni.org” domain name and repeating that defendant was enjoined from registering or using such domain names. Plaintiffs also filed a motion for contempt for violations of the first injunction. After appointing a public defender to represent defendant in the contempt charge, the district court again ordered defendant to immediately cease using the disputed domain names and to transfer them to their rightful owners within three days. It also ordered defendant to pay $500 a day until he complied and to pay plaintiffs’ fees, costs, and expenses. At a compliance hearing the next week, the district court determined that defendant was still using numerous infringing domain names. Although plaintiffs had forced transfer of many names registered in the United States, some names registered in France still linked to defendant’s sites. Moreover, despite the court’s finding defendant in contempt for registering “ilovethewashingtonpost.com,” defendant registered the similar names “ilikethewashingtonpost.com” and “iadorethewashingtonpost.com.” Based on defendant’s continued use of certain names and registration of new names, the court ordered defendant to pay $17,000 in contempt charges ($500/day for 34 days).

Appellate Court Proceedings
On appeal, defendant challenged the original injunction and the two contempt orders. Defendant argued, among other things, that injunctive relief was improper because he did not possess the bad-faith intent to profit required by ACPA, and the First Amendment protected his use of the domain names. Regarding cybersquatting, there was no issue that plaintiffs’ marks were distinctive and famous when defendant registered his domain names. But defendant argued that the lower court’s finding that the domain names were confusingly similar to plaintiffs’ marks was erroneous because Internet users trying to reach plaintiffs’ websites would not likely reach one of defendant’s websites. Defendant contended that Internet users would find the plaintiffs’ websites by either using a search engine or guessing that the domain name was the company name followed by “.com.”

The court rejected that argument, however, noting that the “confusingly similar” issue under the ACPA was narrower than the traditional likelihood-of-confusion test for infringement. Under ACPA, the courts need only compare the similarity of plaintiff’s mark to the challenged domain name in appearance (disregarding the gTLD). For example, in PETA v. Doughney the court noted that even though the defendant’s website “peta.org” was a clear parody of the plaintiff’s mark and users visiting defendant’s site would realize they were not at the official site of PETA, the “peta.org” domain name was still confusingly similar to the PETA mark. Here, the district court’s findings on confusing similarity were not erroneous because the second-level portions of defendant’s domain names were either identical to plaintiffs’ marks or differed only by the addition of generic terms like “my,” “says,” or “drink.” Moreover, the record showed defendant’s intent to capitalize on that similarity, and there was evidence of actual confusion.

Turning to the issue of defendant’s bad faith, defendant argued that he used the domain names only to spread his message. Application of the statutory bad-faith factors, however, showed otherwise. Defendant had no legal right to any of the marks contained in the domains and had not previously used them for the bona fide offering of any products or services. Significantly, defendant’s sites were not completely noncommercial because they solicited contributions and offered merchandise for sale. Even if defendant only provided links to third-party sites that solicited funds for the antiabortion movement and sold antiabortion merchandise, he still used the domain names to profit the organizations of his choice. According to the court, “nothing in the ACPA suggests that Congress intended to allow cybersquatting to escape the reach of the act by channeling profits to third parties.” Furthermore, defendant’s offer to trade his “Washington Post” domain names for space on the editorial page in The Washington Post was evidence of an offer to assign the domain names for financial gain as the term “profit” includes any “attempt to procure an advantageous gain or return.”

The Eighth Circuit distinguished this case from Lucas Nursery v. Grosse and TMI v. Maxwell, both involving disgruntled customers who registered a domain name identical to the plaintiffs’ respective marks and used it for a website to criticize the plaintiffs’ respective business practices. The defendants in those cases, however, did not (1) register multiple infringing domain names, (2) offer to assign the names for valuable consideration, or (3) link the sites to issues other than the company’s business or to websites that solicited donations or sold merchandise.

The Eighth Circuit next turned to the question of whether the First Amendment protected defendant’s actions. The court initially acknowledged that there was no question that the First Amendment protected “defendant’s right to use the Internet to protest abortion and criticize the plaintiffs or to use expressive domain names that are unlikely to cause confusion.” The issue for the court to decide was whether the First Amendment “protect[ed] a misleading use of plaintiff’s marks in domain names to attract an unwitting and possibly unwilling audience to [defendant’s] message.” The court cited various cases, including Planned Parenthood v. Bucci, for the proposition that the First Amendment does not protect the use of a trademark that creates a likelihood of confusionover the source or sponsorship of the speech at issue. The Eighth Circuit concluded that “[w]hile [defendant] has the right to express his message over the Internet, he has not shown that the First Amendment protects his appropriation of plaintiffs’ marks in order to spread his protest message by confusing Internet users into thinking that they are entering one of the plaintiffs’ websites.” (Emphasis in original.)

The court also rejected defendant’s argument that his conduct fell within ACPA’s safe-harbor provision because he lacked the requisite reasonable belief that the First Amendment protected his actions. In particular, the court pointed to a prior injunction against defendant for using a domain name containing his former employer’s mark to criticize the employer and to publish employee Social-Security numbers and salary information that were mistakenly emailed to him at that domain name, which injunction was affirmed by the Eighth Circuit despite defendant’s First Amendment arguments similar to those advanced here. Moreover, after the injunctions were issued in this case, defendant was enjoined by the same district court from registering and linking to antiabortion websites various domain names containing the trademarks of The Minneapolis Star Tribune and its counsel.

Nor did the district court err in finding that defendant’s actions irreparably harmed plaintiffs; that the balancing of harms favored plaintiffs, particularly because defendant had “multiple lawful avenues of expression,. . . including publication of his ideas over the Internet using nonconfusing domain names”; and that an injunction protected the public interest from confusion, while at the same time protecting the public interest in free expression by “leaving open ample alternatives of communication.” The court thus affirmed the injunction against defendant. The Eighth Circuit rejected defendant’s prior restraint argument, noting again that the First Amendment did not protect the “deceptive use” of domain names in violation of the ACPA. And the Eighth Circuit also rejected defendant’s argument that the injunction was a content-based restriction of his speech in violation of the First Amendment. The court noted that the injunctions did not restrict expressive content, but rather addressed only use of trademarks in a way likely to cause confusion. The court noted that defendant could use domain names containing plaintiffs’ marks if the names were not confusingly similar to plaintiffs’ marks and they revealed the protest or critical commentary nature of the corresponding website. For example, the court commented that defendant could register and use the domain names “PurdySupportsPepsi.com” or “PurdysCokeSite.com” to “publish complimentary or critical commentary because neither name is identical or confusingly similar to any of plaintiffs’ marks.”

Defendant’s last attack on the injunction was that it was impermissibly vague and overbroad because the terms “unwary Internet user,” “use,” and “protest or critical nature” were so ambiguous that it was impossible to distinguish between permissible and impermissible content. The Eighth Circuit, however, found nothing in the orders that a “good faith reading would not make clear.” Moreover, defendant’s deliberate and continuing infringement justified the injunctions. And defendant was always free to request clarifications and adjustments to the orders to correct any genuine issue. Finally, the appeals court held that it lacked jurisdiction over the contempt orders and sanctions because they were not appealable interlocutory orders.