Stenzel v. Pifer

Citation: Stenzel v. Pifer, 2006 WL 1419016, 81 U.S.P.Q.2d (BNA) 1689 (W.D. Wash. May 22, 2006) (plaintiff's motion for judgment on the pleadings); 2006 WL 2104438, 82 U.S.P.Q.2d (BNA) 1372 (W.D. Wash. July 26, 2006) (plaintiff's motion for reconsideration)

Factual Background
Plaintiff registered the domain name "colchester.com" in 1999, but never used the domain name. Defendant applied in May 2005 to federally register the COLCHESTER [[mark for clothing and footwear, claiming February 4, 2005 as its date of first use. Defendant filed a UDRP complaint, and the Panel found that plaintiff "had been warehousing the domain name in bad faith" and ordered transfer of the domain name to defendant.

Trial Court Proceedings
Plaintiff filed suit to stay the UDRP decision and for a declaration that his registration and ownership of the domain name did not violate the ACPA and did not infringe defendant's mark. Plaintiff moved for judgment on the pleadings regarding the ACPA claim on the ground that defendant's alleged trademark was not distinctive or famous when plaintiff registered the domain name.

Defendant cross-moved for dismissal of the ACPA claim on the ground that the court should defer to the UDRP decision. Defendant acknowledged that UDRP decisions were not binding on the court and that every court deciding the issue has held that UDRP decisions are not entitled to deference in civil litigation. However, noting that the Ninth Circuit had not addressed this "deference" issue, defendant argued that a pre-UDRP Ninth Circuit decision addressing whether a non-binding arbitration agreement constituted an "arbitration" under the Federal Arbitration Act, suggested that the Ninth Circuit would reach a different decision.

The court rejected defendant's argument and found persuasive the decisions of every other court to decide the issue. The court thus denied defendant's motion and proceeded to examine the claims de novo. The court also denied plaintiff's motion regarding the ACPA claim in light of defendant's inconsistent positions in his Answer. Although, on one hand, defendant admitted that he did not use the COLCHESTER mark and had no rights in the mark as of 1999, defendant also denied plaintiff's allegation that its COLCHESTER mark was not famous or distinctive when plaintiff registered the domain name in 1999. The court nonetheless granted plaintiff's motion for judgment on the pleadings and held that plaintiff's mere registration of "colchester.com" did not constitute a "commercial use" under the Lanham Act, and therefore did not infringe defendant's trademark.

Two months later, the court granted plaintiff's motion for reconsideration that argued that the court should find, as a matter of law, that defendant could not succeed on his ACPA claim because defendant admitted that "he did not use or have rights in the alleged COLCHESTER mark" when the domain name was registered. Based on this admission, plaintiff argued that defendant's mark could not have been "distinctive" or "famous" when plaintiff registered the domain name in 1999.

The court initially characterized the question of whether defendant's admission of non-use of the mark barred an ACPA claim as a "close call" and noted that neither party briefed the issue prior to this motion. It also noted that defendant "survived the motion to dismiss only because he 'denied' the allegation that his alleged mark was not distinctive or famous as of 1999." In this motion, however, plaintiff cited cases and sections of the Lanham Act supporting the argument that a mark cannot be distinctive or famous without use of the mark. The court thus granted plaintiff's motion for reconsideration and declared that plaintiff's registration of the "colchester.com" domain name did not violate defendant's trademark rights under the "distinctive or famous" element of the ACPA.

The parties disagreed, however, as to the scope of this judgment. Because the court's declaration of non-violation of ACPA did not conflict with "any of the findings or conclusions made by the Arbitrator in applying the UDRP provision" (i.e., the findings of confusing similarity, absence of rights by plaintiff, and plaintiff's bad faith), defendant argued that this declaration did not invalidate the other parts of the UDRP arbitration decision. Defendant argued that this judgment did not entitle plaintiff to a declaration that he did not need to transfer the domain name to plaintiff as the UDRP Panel had ordered.

In response, plaintiff argued for the first time that defendant's ACPA claim also failed because he could not have had a "bad faith intent to profit" in 1999 because defendant's alleged trademark rights did not exist until 2005. However, because plaintiff did not raise the issue of bad faith in its motion to reconsider, the court declined to consider it.

The court noted that the ACPA includes a specific statutory cause of action for "redress" of UDRP decision in which domain name owners can file a civil action to establish that its registration or use of a domain name suspended, disabled, or transferred under the UDRP or similar policies "is not unlawful under this chapter." Other courts have held that an action based on §1114(2)(D)(v) "may negate a UDRP decision," including the First Circuit's decision in Sallen v. Corinthians and the Second Circuit's decision in [[Storey v. Cello Holdings]. Here, however, plaintiff did not bring a claim under §1114(2)(D)(v), but rather asserted a claim for no violation of §1125(d).

The court held that an issue remained for trial as to whether the court's judgment also entitled plaintiff to "a declaration that Plaintiff need not transfer the domain name to Defendant and that Defendant is prohibited from taking further action with respect to such a transfer." It ordered plaintiff to submit a proposed judgment, and to brief the issue of whether a declaration of non-violation of one element in the ACPA (i.e., distinctive or famous) that does not directly contradict a UDRP decision could nonetheless negate that UDRP decision as well as the applicability of the Sallen and Storey decisions noted above.

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