Saving Iran - It Ran So Far Away, The International Reach of in Rem Actions in Cyberspace

Intellectual Property Alert

PUBLISHED ON: November 1, 2004

Anderson Kill’s IP Group recently successfully obtained for its client, Savin Corporation (“Savin”) the transfer of the domain name from an Iranian entity by filing a complaint against the domain name itself under the in rem provisions of the Anti- Cybersquatting Consumer Protection Act (the “ACPA”). The domain name incorporated Savin’s exact trademark and was used in connection with a .com Web site. The Iranian registrant of did not appear to conduct sufficient business within any U.S. state to enable Savin to obtain personal jurisdiction over the foreign entity. However, the domain name was registered with Network Solutions, Inc. in Virginia, which resulted in there being jurisdiction in the Eastern District of Virginia over the domain name itself.

The complaint by Savin Corporation against alleged that the defendant domain name violated the ACPA because it infringed upon Savin’s mark by incorporating the exact trademark placed next to a generic term (“corp”). Additionally, the complaint alleged that the defendant domain name violated the ACPA because it diluted Savin’s mark.

The U.S. District Court for the Eastern District of Virginia required formal compliance with the service and publication requirements set forth in the ACPA, which provides statutory jurisdiction over all domain names registered with U.S. registrars. Anderson Kill served the complaint by email and by hard copy to the domain name registrant and also published a notice of the filed action in the Washington Post newspaper. It had also attempted to have the same notice printed in an Iranian newspaper in Farsi. The major Iranian newspapers refused to print the notice, however, citing the adverse political climate between the U.S. and Iran, leaving Anderson Kill to submit to Court only the evidence of its efforts with the Iranian press. Since the domain name registrant had responded to the service of the complaint by email indicating that it had actual notice of the action, the Court was satisfied by these service and publication efforts and quickly resolved the merits of the case.

The defendant domain name defaulted in the case, permitting the magistrate judge to enter issue a report and recommendation in plaintiff’s favor based on the complaint. The magistrate found that the registrant of the defendant domain name failed to make an appearance pursuant to Rule 55 of the Federal Rules of Civil Procedure. While the registrant had sent letters to the Court and to Anderson Kill, the Magistrate did not consider these actions to constitute formal appearance.

Based on the well-plead facts of the complaint, the Magistrate recommended transfer of the domain name. The allegations of the complaint and the documents attached to the complaint supporting those allegations, set forth that the trademark owner was entitled to transfer of the defendant domain name because that domain name infringed and diluted the SAVIN trademark. The Court found for the plaintiff on all counts, pointing to the Web site at the defendant domain name and other documents attached to the complaint as evidence of unauthorized use in commerce of the SAVIN mark.

The registrant of the domain name then contested the magistrate’s recommendation. The District Court Judge reviewed these submissions and after a de novo review, adopted the magistrate’s recommendations. Because the Court reviewed the case de novo after it was contested, the district court judge’s decision was not based on default and carries the weight of precedent.

The Court upheld the magistrate’s finding that the registrant’s use of the domain name, including its use with a Web site that featured Savin’s mark used alone and in connection with related goods and services all contributed to its finding of likelihood of confusion. The Court additionally held that use of the domain name in a Web site diluted Savin’s mark. The Court found that Savin’s mark is famous and distinctive, based on the evidence attached to the complaint of long use, national advertising, widespread public recognition and the volume of sales under the mark. The Iranian company’s use of the SAVIN mark on the Web diluted the source identifying quality of our client’s mark because it did not distinguish the registrant from Savin. Based on these findings of dilution and likelihood of confusion, the Court ruled that the defendant domain name should be transferred to the plaintiff.

The in rem provisions of the ACPA, unlike the other provisions of that statute, do not require an additional showing by the plaintiff of bad faith. They only may be used where jurisdiction is not otherwise available, e.g., over a foreign domain registrant. The provisions are often used against foreign cybersquatters because relief against the offending domain name can often be obtained quickly and cost effectively.