IP: All Top Level Domains may lead to US jurisdiction (fwd)

[Dave Farber <farber () cis upenn edu>]

> ---------- Forwarded message ----------
> Date: Wed, 8 Mar 2000 04:20:13 -0800 (PST)
> From: df () macroberts co uk
> To: scotland () scotland isoc org
> Subject: All Top Level Domains may lead to US jurisdiction
>
> Last Friday the Court in Virginia ruled that it had jurisdiction over
> every domain name registered by or through NSI.
>
> Given the importance of this issue, we thought the attached comment would
> be of interest to you.
>
> Regards
>
> David Flint
>
> ************************************
> 152 Bath Street
> GLASGOW
> G2 4TB
> Tel: +44 141 332 9988
> Fax: +44 141 332 8886
> E-Mail: IPgroup () macroberts co uk
>
> PRESS RELEASE
>
> US SEIZES JURISDICTION OVER DOT.COM COMPANIES
>
> · Mere registration of top level domain sufficient
>
> · US companies able to seize worldwide registrations
>
> · US trademark owners able to have domain names of others expropriated
>
> Over the last few years we have commented on Internet cases from around
> the world which we believe would be of interest to UK businesses and
> others. For some readers these cases may have been more relevant than
> others. Today however we report on a decision of the District Court for
> the Eastern District of Virginia which has perhaps the furthest reaching
> implications for worldwide internet governance.
>
> In its Decision of Friday 5th March 2000, Caesars World, Inc -v-
> Caesars-Palace .Com and others (Civil Action No 99-550-A), Judge Albert
> Bryan effectively decreed that his court would be the arbiter of the
> property rights in respect of all the approx. 7,000,000 .COM, .EDU, and
> .ORG top level domains registered. Although the Decision dealt solely with
> the motions of two of the defendants to dismiss an action for lack of
> jurisdiction, the effect of the Decision is to open the floodgate to
> litigation by holders of US trademarks against domain name proprietors
> based outwith the US (or at least outwith Virginia.
>
> In the particular circumstances of the case, it may be that ultimately the
> defendants will prevail in respect of the substantive issues of the case.
> Certainly there are many reasons why this may be so. However, for the bulk
> of the Internet community the issue is not one of the substantive issues
> but one of jurisdiction and being subject to the jurisdiction of the US
> courts.
>
> The action was brought originally under the Federal Trademark Dilution Act
> and amended to include claims under the Anti-Cybersquatting Consumer
> Protection Act 1999. The basic change brought about by the ACPA was to
> allow in rem jurisdiction to be taken in specific cases. The same Virginia
> Court had previously ruled in Porsche Cars -v- Porsche.com that in rem
> jurisdiction could not be asserted over a domain name.
>
> The court's brief decision rejects all the arguments of the defendants who
> chose to defend the case; the others (mistakenly it may appear) took the
> view that the US court had no jurisdiction and chose not to enter
> appearance. The decision seems to go against the clear wording of the ACPA
> which seemed to suggest that in rem jurisdiction was only to be exercised
> as a fall-back position. Section 43(d)(2A) of the Trademark Act of 1946
> (15 U.S.C. 1125) ("the Lanham Act")
>
> "The owner of a mark may file an in rem civil action against a domain name 
> in the judicial district in which the domain name registrar, domain name 
> registry, or other domain name authority that registered or assigned the 
> domain name is located if--
>
> `(i) the domain name violates any right of the owner of a mark registered
> in the Patent and Trademark Office, or protected under subsection (a) or
> (c); and
>
> `(ii) the court finds that the owner--
>
> `(I) is not able to obtain in personam jurisdiction over a person who
> would have been a defendant in a civil action under paragraph (1); or
>
> `(II) through due diligence was not able to find a person who would have
> been a defendant in a civil action "
>
> Judge Bryan considered that the Plaintiff could proceed straight to the in
> rem action, as the defendants had not indicated that they were amenable to
> in personam jurisdiction. In this case there is no indication that the
> Plaintiff tried to do so although the addresses of many of the defendants
> were known.
>
> According to the Court, the mere fact that the domain name was registered
> with Network Solutions Inc in Virginia was of itself sufficient to satisfy
> the minimum contacts requirements of the US Constitution. Given that until
> recently NSI was the only registrar and still maintains the registry, this
> is hardly a jurisdiction of choice for parties having a .COM registration.
>
> In a very curious statement, Judge Bryan states "given the limited relief
> afforded by the [Anti-Cybersquatting Consumer Protection] Act, namely "the
> forfeiture or cancellation of the domain name or the transfer of the
> domain name to the owner of the mark", no due process violation occurred
> to the defendants personally". Whilst the types of relief may be limited
> (and damages are also possible under that Act) the consequences of the
> relief are not.
>
> David Flint, Partner in MacRoberts Solicitors Glasgow (who advised one of
> the defendants in this case) comments: - "This decision may have the
> greatest effect ever of any US cyberlaw case to date. Effectively all
> those international businesses using Top Level Domains (which is now the
> norm) may find their domains being challenged by US businesses. Even if
> ultimately successful, the cost to business in fighting challenges before
> the US courts is not insubstantial and the possibility of little or no
> recovery of expenses may lead to a swing in the balance of power to the
> powerful US trademark lobby.  Developments in this case will be watched
> with interest by world-wide Internet users".
>
> For Further Information Contact:
>
> David Flint     Tel: +44 141 332 9988
> df () macroberts co uk
>
> Joanna Boag-Thomson
> joannab () macroberts co uk        Fax: +44 141 332 8886
>
> Elaine McKinney
> elainek () macroberts co uk
>
> *********************
> David Flint                                  Tel: +44 141 332 9988
> IP & Technology Law Group       Fax: +44 141 332 8886
> MacRoberts, Solicitors
> 152 Bath Street                          E-Mail: df () macroberts co uk
> GLASGOW G2 4TB
> Scotland UK                              URL: http://www.macroberts.co.uk
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