ABSTRACT

The District Court of New Hampshire dismissed all of plaintiff’s trademark claims against the defendant domain name registrar, even though defendant profited from the use of a “parked” domain name nearly identical to plaintiff’s trademark and which was used for a pay-per-click web page featuring links to competing goods.  The court dismissed plaintiff’s cybersquatting, infringement, and false-designation-of-origin claims because plaintiff’s mark PHILBRICK’S SPORTS for a sporting-goods store was not distinctive (either inherently or through acquisition of secondary meaning) or famous when defendant registered the disputed domain names.  The court declined to follow a minority view from the Fourth Circuit that intentional copying of a mark was prima facie evidence of secondary meaning.  The court also dismissed plaintiff’s claim for personal name cyberpiracy because the domain names containing the wording “philbricksports” were not sufficiently similar to the plaintiff’s full name “Daniel Philbrick.”  Finally, the court rejected plaintiff’s claim that the “Welcome to Philbricksports.com” statement on defendant’s website was literally false, and found that plaintiff failed to show the required actual consumer deception to support a false advertising claim based on an ambiguous or literally true statement.

CASE SUMMARY

FACTS

Plaintiff Daniel Philbrick owned Philbrick’s Sports, a retail sporting-goods store that he has operated in Dover, New Hampshire, since 1983.  Philbrick’s Sports was one of several businesses operated in northern New Hampshire by a member of the Philbrick family.  In 1965, Philbrick’s father opened Philbrick’s Sales and Service, a bicycle and lawnmower shop in nearby Rye, New Hampshire, which is still operated as a lawnmower business under the same name.  In 1976, Philbrick’s brother Rick took over the bicycle portion of his father’s business, opening Philbrick’s Sports World across the street from Philbrick’s Sales and Service.  Philbrick’s Sports World closed its doors in 1988, only to reopen as Philbrick’s Suncoast Sports, which operated until 1997.  Although none of the Philbrick businesses were affiliated, each Philbrick brother had his father’s permission to use the Philbrick surname as part of their respective business names.

Philbrick registered the domain names philbricks.com/.net and philbrickssports.com in the early 1990s and for a number of years used them only to provide general information about his store.  In 2001, Philbrick began selling hockey equipment on his “Philbricks” websites via a “store” button on those sites, which linked users to several other “non-Philbricks” sites he owned, including hockey.com.  There was little to suggest any affiliation between these other sites and his “Philbrick’s” websites.  For example, customers could access hockey.com independently and the only affiliation information was listed on the “About” page of hockey.com.  Philbrick sold the hockey.com domain for $1 million in 2005.  After that, customers could purchase hockey equipment directly through the philbricks.net website.

Defendant eNom, Inc. (“eNom”), a domain name registrar, provided a service called “Club Drop,” through which it accepted bids from third parties on domain names that a registrar had placed on “pending delete” status.  “Pending delete” means that a domain name registration is set to expire in less than five days and will come available for registration on a first-come, first-serve basis.  When “pending delete” domain names became available, eNom attempted to register them on behalf of its top auction bidder.  However, if the winning bidder did not pay the registration fee and no additional buyers were found, eNom would often retain the domain name and “park” it, which involved the hosting of profitable pay-per-click ads on a web page at the domain.

In early 2007, Philbrick discovered that philbricksports.com was one of eNom’s parked domain names.  The top of the web page contained the text “philbrick sports sporting good sportswear at philbricksports.com.”  Beneath this text appeared the phrase “Welcome to Philbricksports.com.”  The page also contained various sporting-goods-related pay-per-click links such as “Hockey Equipment,” “Hockey,” and “Hockey Gear” that connected to third-party websites.  eNom had acquired this domain name, along with philbricksports.net, for a third party through its Club Drop program.  When the third party failed to pay the registration fees for either domain, eNom retained only philbricksports.com, dropping philbricksports.net. 

Philbrick sued for cybersquatting, cyberpiracy of a personal name, state and common law trademark infringement, false designation of origin, and false advertising.  Philbrick moved for summary judgment on his cybersquatting claim, and eNom cross-moved for summary judgment on all of Philbrick’s claims.

ANALYSIS

The court denied summary judgment on Philbrick’s cybersquatting claim, finding that his PHILBRICK’S SPORTS mark was neither distinctive nor famous as required by the Lanham Act.  Section 43(d)(1)(A) defines cybersquatting as a bad-faith intent to profit from registering, trafficking in, or using a domain name that is identical, confusingly similar, or dilutive of another’s mark that was distinctive or famous when the domain name was registered.  Although eNom asserted several defenses, including claiming immunity as a domain name registrar acting on behalf of a third party, the court focused only on the protectability of Philbrick’s mark when eNom registered the disputed domains.  The court first determined that the PHILBRICK’S SPORTS mark was clearly not famous because it was not “widely recognized by the general consuming public of the United States” as a designation of source of Philbrick’s goods or services.  Although Philbrick presented evidence showing use of his mark for the past 25 years and sales to customers in all 50 states, the court deemed this evidence “manifestly insufficient to create a genuine issue whether the mark was famous.” 

Turning to the distinctiveness (i.e., protectability) of the mark, the court deemed Philbrick’s mark merely descriptive and thus lacking inherent distinctiveness because it was a combination of the personal name ”Philbrick” with the descriptive term “Sports.”  In short, the mark “signifies [nothing] but a sporting goods business associated with someone named Philbrick.” 

The court also rejected Philbrick’s claim that his mark was distinctive through the acquisition of secondary meaning.  First, regarding Philbrick’s use of his mark for 25 years, the court noted that there had always been at least one other store named “Philbrick’s,” at times in conjunction with the word “Sports,” in the same marketplace.  The court stated that such uses would “tend to diminish the strength of any connection in the mind of consumers between ‘Philbrick’s Sports’ and a single source,” even though these other uses were by Philbrick’s relatives who unquestionably had the right to use the name.  Second, although Philbrick spent $1.5 million advertising his mark between 2000 and 2008, he failed to show the effectiveness of that advertising.  Moreover, although Philbrick identified radio and television stations and publications with which he advertised, he failed to provide any facts regarding when the ads aired or were published or for how long, or how many consumers were exposed to the ads.  And Philbrick’s advertising was limited in geographic scope to the Seacoast region of New Hampshire and, in some cases, to Boston.  According to the court, this evidence “provides virtually no support for its . . . secondary meaning.” 

Third, Philbrick relied heavily on his “internet presence since 1997.”  The court noted, however, that for most of this time, nothing could be purchased on a “Philbrick’s Sports” website.  And customers purchasing from the hockey.com site or other linked sites likely did not even know they were dealing with Philbrick’s Sports because that name did not appear on those other websites or on materials shipped with the purchases.  Philbrick did not do business online under “Philbrick’s Sports” until October 2005, only one month before eNom registered two of the disputed domains and 2½ years before eNom registered the other domains.  The court thus held that these online activities, like Philbrick’s advertising, provided “virtually no support” for this claim of secondary meaning.

Philbrick also argued, citing a Fourth Circuit decision, that eNom’s intentional copying of his mark established a prima facie case of secondary meaning.  The court, however, deemed that case “a minority view that does not hold sway in the First Circuit,” which followed the majority view that intentional copying is but one of many secondary-meaning factors to consider.  The court noted that intentional copying suggests secondary meaning only when the trademark owner shows both the intent to copy and the intent to pass off one’s goods as those of another.  It was not enough that eNom used sophisticated technology to select domain names with the potential to attract traffic.  Given the overlap between the products advertised in the links on eNom’s website and Philbrick’s sporting goods (e.g., ice hockey equipment, skis), the court noted that “it is perhaps reasonable to surmise that those terms were in fact associated with this domain name” because Internet users searched for those terms with the “Philbrick’s Sports” name.  But Philbrick failed to submit any evidence that the links were actually associated with eNom’s domains for this reason.  Moreover, Philbrick failed to present any evidence showing passing off (i.e., customers believing they were dealing with Philbrick but were in fact dealing with eNom or the pay-per-click advertisers).  Accordingly, the court granted eNom’s summary judgment motion on Philbrick’s cybersquatting claim.

The court also rejected Philbrick’s claims of cyberpiracy of a personal name under Section 47(1)(A) of the Lanham Act, which prohibits the registration of a domain name consisting of a “name substantially and confusingly similar” to that of another living person with the specific intent to profit from the sale of that domain name.  Significantly, Section 47(1)(A) does not require that the personal name be a protectable trademark, so the court’s findings that Philbrick’s mark was merely descriptive and lacked secondary meaning were not fatal to this claim.  The parties debated whether Section 47(1)(A) could apply to the use of a party’s surname only, or if the statute required the use of a party’s full name.  The court, however, determined it did not need to resolve the issue because “the configuration of the domain name ‘philbricksports’ is not substantially similar to that of the name ‘Daniel Philbrick.’”  Because Section 47(1)(A) “requires the names—not their uses—to be ‘substantially and confusingly similar’ to each other,” Philbrick’s claim for personal name cyberpiracy failed as well.

Regarding Philbrick’s claims for federal and state trademark infringement, unfair competition, and false designation of origin, the court determined that the false designation of origin and unfair competition claims failed as a result of the mark’s lack of distinctiveness discussed above.  Moreover, even if Philbrick’s mark was distinctive and protectable, the court found no likelihood of confusion when it applied the eight-factor test used in the First Circuit.  The only factor that favored Philbrick was that eNom’s domain names were very similar to Philbrick’s mark.  The factors regarding similarity of the goods, channels of trade, advertising, and customer bases all favored eNom due to Philbrick’s failure to show that the links on eNom’s websites actually connected to sites selling the identified products or that this purchasing process was likely to confuse purchasers into thinking they were dealing with Philbrick’s Sports.  Moreover, Philbrick did not submit any evidence of actual confusion or that eNom had a bad-faith intent to cause confusion (as opposed to simply registering the domains on behalf of a third party).  These factors, coupled with the inherent weakness of Philbrick’s mark, doomed Philbrick’s infringement, false designation of origin, and unfair competition claims. 

Finally, regarding false advertising, Philbrick claimed that the phrase “Welcome to Philbricksports.com” as it appeared on the parked website was “false on its face,” or literally false.  Under Section 43(a)(1)(B) of the Lanham Act, a plaintiff can recover for a literally false statement without showing actual consumer deception, while a literally true or ambiguous claim required the plaintiff to produce evidence of actual consumer deception that resulted from the defendant’s statement.  The court viewed the statement displayed on eNom’s site as literally true because it “simply welcomes the viewer to a website named ‘Philbricksports.com’ which . . . is literally true in the sense that ‘philbricksports.com’ is the name of the website.”  Although the statement may suggest that the site was affiliated with a business named “Philbrick’s Sports,” it was not false on its face.  Thus, because Philbrick failed to submit any evidence that visitors to eNom’s websites believed they had anything to do with Philbrick (i.e., actual consumer deception), the court also granted summary judgment to eNom on Philbrick’s false advertising claim.

CONCLUSION

Based on this decision, it appears that owners of trademarks that are not inherently distinctive have a heavy burden of proving secondary meaning in the District of New Hampshire, especially trademark owners that operate a local or regional business.  Interestingly, the court did not find that plaintiff established secondary meaning even in its local trading area where it used its mark for 25 years and spent $1.5 million in advertising for the past eight years.  In addition, for purposes of cyberpiracy of a personal name, the court appeared to adopt the test that the domain name had to incorporate the individual’s full name or a substantially similar full name and that the presence of only an individual’s surname or a similar surname is not sufficient to meet the “substantially and confusingly similar” standard of Section 47(1)(A) of the Lanham Act.