Domaining Registrar Defeats Cybersquatting Lawsuit–Philbrick v. eNom

By Eric Goldman

Philbrick v. eNom, Inc., 2009 WL 152127 (D.N.H. Jan. 22, 2009). The Justia page.

Philbrick’s Sports is a New Hampshire retailer of sporting goods. eNom’s customer registered two domain name variants of Philbrick Sport’s website. When the customer didn’t pay eNom, eNom took the names back for itself. Subsequently, eNom registered another domain name variant of Philbrick’s website through a domain name tasting program. Each of these domain names were parked with Yahoo, who displayed sponsored ads on the domains. Philbrick’s then sued eNom, claiming cybersquatting and trademark infringement.

Anti-Cybersquatting Consumer Protection Act (ACPA) and Trademark

The court sidesteps the complexities associated with the domain name registrar safe harbor when applied to a registrar holding the domain name for itself, but calls eNom’s argument “troubling” (for a little more on this, see my blog post on OnlineNIC). Instead, the court finds that the Philbrick trademark is neither famous (thus not triggering the ACPA protection for famous marks) nor distinctive because it’s a personal name and the plaintiffs failed to establish secondary meaning. The fame analysis is actually easy due to the geographically limited footprint of the business, although the court doesn’t reference that.

To overcome the fact that Philbrick is the plaintiff’s surname, the plaintiff makes a common argument that eNom intentionally copied the plaintiff’s trademark, which the plaintiff argues should act as prima facie evidence that the mark has achieved secondary meaning (i.e., if the term is meaningless to consumers, why is the defendant mimicking it?). Philbrick’s goes further to argue that Yahoo’s auto-population of the links provides evidence that Yahoo recognizes the Philbrick’s mark and is responding to it. The court rejects these arguments, correctly calling them “circular,” and ultimately concludes they are unpersuasive. It was nice to see a court apply a rigorous scrutiny of secondary meaning considerations, rather than rotely rubber-stamping data that only acts as a proxy for consumer perceptions.

The net result is a painful outcome for the plaintiff. As we’ve seen before (e.g., the American Blinds lawsuit), the plaintiff walks out of court with fewer trademarked assets than it thought it had.

With Philbrick’s marks declared non-distinctive for lack of secondary meaning, Philbrick’s trademark infringement claim drops away. For good measure, the court independently concludes that there was no likelihood of consumer confusion.

Cyberpiracy

In an unusual move, the plaintiff brought a “cyberpiracy” claim for registering a domain name containing his personal name (15 USC 1129). This portion of the ACPA is lightly litigated because it only applies when the registrant obtains a domain name for profitable resale, and few domain registrants do that any more. Rather than ruling on this ground, the court says that the domain “philbricksports” is not substantially similar to the plaintiff’s name of “Daniel Philbrick,” and thus the claim fails for lack of similarity. This is a pretty narrow reading of 1129 because it seems to allow a personal name in the domain name so long as there is a substantial noun in the domain name as well. If this reading holds, we’ll see even fewer 1129 claims in the future.

Other Points

A false advertising claim fails as well. The plaintiff claimed that the headline “Welcome to Philbrickports.com” was false, but because the domain was Philbrickports.com, this headline is unquestionably true.

In addition to the factual novelty of the case (the registrar as an ACPA defendant and the 1129 cyberpiracy claim), some other interesting angles to this case:

* I’ve repeatedly argued that lawsuits over domain names don’t make economic sense, and we get more evidence of that here. The court cites evidence that one domain name generated $183.29 in revenue and a second domain name generated 70 cents of revenue. If Philbrick’s doesn’t get statutory damages from the court, with numbers like these, there is no possible way that a court will award enough damages to make this lawsuit economically rational.

* the case does not cite the limited precedents involving domainers and cybersquatting. Most conspicuous is the absence of a citation to Verizon v. Navigation Catalyst, which is the flagship plaintiff’s win in the area. Verizon’s other big win, with $33M in damages, didn’t get a mention either.

* the court rejects any initial interest confusion argument with a nice shoutout:

it is worth noting that the initial interest confusion doctrine has been criticized as “predicated on multiple and empirically unsupported assumptions about searcher behavior” on the Internet, e.g., “that using a trademarked keyword means that the searcher wanted to find the trademark owner.” Eric Goldman, Deregulating Relevancy in Internet Trademark Law, 54 Emory L.J. 507, 555-56 (2005). That is yet a further problem with the proof in this case-apart from the one customer who encountered the “philbricksports.com” site while looking for the plaintiffs, there is no evidence to suggest how anyone else ended up there, and thus no basis to assume that they were necessarily trying to find the plaintiffs’ business but became “lost,” even initially.

I love it when a court does good research! :-)

Conclusion

In the end, eNom wins summary judgment on all claims. According to this news report, Philbrick plans to appeal. From my perspective, that doesn’t look like a prudent call. Putting aside the illogic of throwing more money at these not-worth-it domain names, the district judge missed a number of defense-favorable rationales to support its ruling. As a result, there is plenty of room for an appeals court to find alternative grounds to affirm.

UPDATE: Marty Schwimmer doesn’t agree with this opinion or with me. Marty is right that the court was decidedly not generous with the secondary meaning analysis, although I did like that the court didn’t just accept the plaintiff’s arguments blindly.