Cybersquatting and Public Use: The Eleventh Circuit Weighs In

//Cybersquatting and Public Use: The Eleventh Circuit Weighs In

Cybersquatting and Public Use: The Eleventh Circuit Weighs In

By | 2018-10-31T13:53:25+00:00 October 24th, 2018|

By Jack Zoesch & Adam Royal

The United States Court of Appeals for the Eleventh Circuit recently decided a case involving trademark protection for domain names. The case, Direct Niche, LLC v. Via Varejo S/A, 898 F.3d 1144 (11th Cir. 2018), involved alleged cybersquatting, which refers to the bad faith registration or use of a domain name containing someone else’s trademark or name.

Plaintiff Via Varejo, a Brazilian corporation, owned roughly forty trademarks worldwide for the “Casas Bahia” brand, under which its subsidiary operated a chain of retail stores throughout Brazil.  Worldwide, Via Varejo used the Casas Bahia mark in e-commerce under the domain name casasbahia.com.br, including in the U.S.  Defendant Direct Niche was a Minnesota company whose sole business was acquiring Internet domain names.  In June 2015, Direct Niche acquired the domain name casasbahia.com for far greater than it typically paid for a domain name ($22,850).  Direct Niche did not use the domain name for e-commerce, but instead sold advertising space under it to third-parties.

An international dispute arose, which resulted in the World Intellectual Property Organization ordering Direct Niche’s domain name casasbahia.com be transferred to Via Varejo. Seeking relief from that decision, Direct Niche filed suit in the United States District Court for the Southern District of Florida requesting a declaratory statement that its registration and use of casasbahia.com was not unlawful, as well as an injunction halting the transfer.  At trial, the district court found that Direct Niche’s registration and use of the domain name violated the U.S. Anticybersquatting Consumer Protection Act (“ACPA”) and that Via Varejo owned rights to the mark in the U.S. via its use in commerce to provide advertising services for others.

The Eleventh Circuit affirmed, focusing on whether Via Varejo had demonstrated public use in commerce sufficient to establish ownership of the mark.  It expressed the test for public use as: 1) adoption of the mark, and 2) “use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark.”  898. F.3d at 1150 (quotation omitted).  Looking to the totality of the circumstances, including the “activities surrounding the prior use of the mark,” the Eleventh Circuit agreed that Via Varejo used the mark publicly in commerce by contracting with U.S. companies to advertise their goods on its Casas Bahia Website, which led to millions of visits from IP addresses located in the U.S.  Id. at 1150-51.

The Beggs & Lane Intellectual Property Group assists clients with a variety of trademark and e-commerce matters, including cybersquatting and domain name disputes, litigation, arbitration, and mediation, trademark registration with the United States Patent and Trademark Office (“USPTO”) and foreign IP offices, and enforcement of trademark rights in the USPTO, the Trademark Trial and Appeal Board (“TTAB”), courts throughout the U.S., and WIPO.