Fare Deals Ltd. v. World Choice Travel. Com, Inc.

180 F. Supp. 2d 678, 2001 U.S. Dist. LEXIS 22756, 2001 WL 1683900
CourtDistrict Court, D. Maryland
DecidedNovember 20, 2001
DocketCIV.A.S-01-1825
StatusPublished
Cited by82 cases

This text of 180 F. Supp. 2d 678 (Fare Deals Ltd. v. World Choice Travel. Com, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fare Deals Ltd. v. World Choice Travel. Com, Inc., 180 F. Supp. 2d 678, 2001 U.S. Dist. LEXIS 22756, 2001 WL 1683900 (D. Md. 2001).

Opinion

MEMORANDUM OPINION

SMALKIN, Chief Judge.

This matter comes before the Court on a motion to dismiss for failure to state a claim upon which relief can be granted, filed by the defendant Hotel Reservations Network, Inc. (“HRN”), and a motion to dismiss, or, in the alternative, for summary judgment, filed by the defendant Cimo, Inc., d/b/a Hotwire (“Hotwire”). Both defendants are incorporated under the laws of Delaware. The plaintiff, Fare Deals, Ltd. (“Fare Deals”), a Maryland corporation, is seeking relief for the misuse of its name via the internet web site < faredeals.com >, whose domain name is registered to another defendant, NetHold-ings.com, Inc. (“NetHoldings”). The issues have been well briefed by the parties, and no oral hearing is necessary. Local Rule 105.6 (D.Md.).

BACKGROUND

Fare Deals has been providing travel services in Maryland since 1990, primarily by arranging transportation reservations and tours for its customers. From the beginning, it has used the “Fare Deals” mark in connection with its business. In September 1993, Fare Deals applied for federal registration of the service mark “Fare Deals Ltd.” with the United States Patent and Trademark Office. That Office approved the mark on March 30, 2001, and the registration ultimately issued on July 17, 2001.

Some time in 1996, Fare Deals began to develop an interactive web site to promote its business but soon discovered that the domain name <faredeals.com> had already been registered to a C.K. Solutions, a Canadian company. Consequently, Fare Deals set up its web site at <fare-deal.com >. At some point prior to April 2000, defendant Ricardo Barnes (“Mr. Barnes”) became the registered owner of the domain name <faredeals.com>. In April 2000, Mr. Barnes in turn transferred the registration to BSB Trade and Technology Ltd., a corporation with offices in Beijing, China. Somewhat later, Mr. Barnes entered into an agreement with defendant Harvey Kaplan (“Mr.Kaplan”) to use the <faredeals.com> domain name to sell on-line travel services through a *681 new entity, defendant NetHoldings. The <faredeals.com> domain name was transferred to NetHoldings and, in April 2001, Fare Deals alleges that Messrs. Barnes and Kaplan, NetHoldings, and Hotwire developed and launched the web site <fare-deals.com >. Via a Hotwire banner ad posted on the site and linked to Hotwire’s web site, customers could make airline reservations and purchase airline tickets from Hotwire.

Learning from a confused customer about the <faredeals.com> site, on May 2, 2001, Fare Deals sent a letter to Hotwire under the mistaken impression that Hot-wire was the registered owner of the <far-edeals.com > domain name and demanded that Hotwire discontinue use of the site. Upon receipt of Fare Deals’ letter, counsel to Hotwire contacted Fare Deals’ attorney by telephone, asserted that Hotwire was not the registered owner of the domain name, and asked whether the posting of a disclaimer would settle Fare Deals’ complaints. Soon thereafter, a disclaimer appeared on the <faredeals.com> web site, clarifying the site’s lack of connection with Fare Deals. Hotwire, however, never required the owners or operators of the <faredeals.com> site to post such a disclaimer. By letter dated May 9, 2001, Fare Deals demanded that Hotwire cease and desist use of the “Fare Deals” mark.

Several days later, NetHoldings and Messrs. Barnes and Kaplan launched a new version of the < faredeals.com > web site. This expanded site allowed customers to link not only to Hotwire, but also to HRN’s web site, where customers could book hotel reservations. On June 13, 2001, after discovering the new site and its links, Fare Deals sent a cease and desist letter, similar to the letter it had sent Hotwire, to HRN. In response, HRN, by letter dated June 18, 2001, denied that it was using Fare Deals’ mark, indicated that it neither owned nor controlled the <fare-deals.com > web site, but promised to forward Fare Deals’ complaint to the operators of the allegedly infringing site.

According to Fare Deals’ complaint, HRN, Hotwire, NetHoldings, and Messrs. Barnes and Kaplan, pursuant to an agreement, would divide up the proceeds of sales made at the HRN and Hotwire web sites. The agreement to which Fare Deals refers is the standard affiliate agreement of HRN and Hotwire, whose relevant terms will be examined in due course.

Both HRN and Hotwire market the travel services that they sell on their web sites by making advertisements, in the form of banner ads or links, available to owners of independent internet web sites, who may post them on their own sites after accepting the terms of HRN’s or Hotwire’s affiliate agreements. Under both HRN’s and Hotwire’s agreements, participating affiliates are paid a commission every time customers at affiliate web sites follow the posted links from the affiliate sites to HRN’s or Hotwire’s site and complete a purchase transaction with HRN or Hotwire. In order both to enable affiliates to create the links and to track sales originating from individual affiliates, HRN and Hotwire provide each of their affiliates with a unique universal resource locater (“URL”). By reviewing usage of the unique URLs, HRN and Hotwire can then calculate the commissions due each affiliate.

Indeed, in January 2001, Mr. Kaplan, on behalf of NetHoldings, submitted an online application with respect to the web site < discounttrip.com > to become an affiliate of HRN. HRN approved the application and assigned a unique URL to <dis-counttrip.com >, which became an HRN affiliate the same month. Although HRN denies that Mr. Kaplan or NetHoldings ever submitted an application for the <far- *682 edeals.com> site, the Court will nevertheless assume, as it must for purposes of HRN’s instant motion to dismiss, that a valid affiliate agreement existed between HRN and <faredeals.com>. Also in early 2001, Mr. Kaplan submitted an affiliate application to Hotwire with respect to the web site < economyreservations.com >. Hotwire approved the application and provided <economyreservations.com> with a unique URL; in March 2001, <economy-reservations.com > became a Hotwire affiliate. However, .neither Mr. Kaplan nor NetHoldings ever submitted an application to Hotwire with respect to the <fare-deals.com> web site. Accordingly, Hot-wire maintains no agreement of any sort with the <faredeals.com> site. Nevertheless, inasmuch as <faredeals.com> was in fact linked to Hotwire, it would appear that Mr. Kaplan (or someone else) copied the unique URL assigned to <economy-reservations.com > to create a link from the <faredeals.com> site to Hotwire.

On June 22, 2001, Fare Deals filed the present nine-count action against Messrs. Barnes and Kaplan, NetHoldings, Hotwire, and others, alleging federal and state-law claims for relief, to wit: Count I-cyberpi-racy under the federal Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d); Count II-federal false designation of origin under 15 U.S.C. § 1125(a); Count Ill-federal trademark dilution by blurring under 15 U.S.C. §

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180 F. Supp. 2d 678, 2001 U.S. Dist. LEXIS 22756, 2001 WL 1683900, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fare-deals-ltd-v-world-choice-travel-com-inc-mdd-2001.