GoPets Ltd. v. Hise

657 F.3d 1024, 2011 WL 4394353
Court of Appeals for the Ninth Circuit·Decided September 22, 2011·No. 08-56110·Published·Cited by 42 cases

Opinion

657 F.3d 1024 (2011)

GOPETS LTD., a limited liability Korean corporation, Plaintiff-Appellee,
v.
Edward HISE, an individual, Defendant-Appellant, and
Joseph Hise, an individual; Digital Overture, Inc., a California corporation, Defendants.
GoPets Ltd., a limited liability Korean corporation, Plaintiff-Appellee,
v.
Edward Hise, an individual, Defendant,
Digital Overture, Inc., a California corporation, Defendant, and
Joseph Hise, an individual, Defendant-Appellant.
GoPets Ltd., a limited liability Korean corporation, Plaintiff-Appellee,
v.
Edward Hise, an individual; Joseph Hise, an individual, Defendants, and
Digital Overture, Inc., a California corporation, Defendant-Appellant.

Nos. 08-56110, 08-56112, 08-56114.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 10, 2011.
Filed September 22, 2011.

*1026 Michael Allen Firestein, Robert H. Horn, Proskauer Rose LLP, Los Angeles, CA, for the plaintiff/appellee.

Edward Hise, Pro se, Simi Valley, CA, Joseph Hise, Pro se, Simi Valley, CA, Stephen Hume Sturgeon, Stephen H. Sturgeon & Associates, Potomac, MD, for the defendants/appellants.

Before: DIARMUID F. O'SCANNLAIN, WILLIAM A. FLETCHER, and RICHARD R. CLIFTON, Circuit Judges.

OPINION

W. FLETCHER, Circuit Judge:

The Anticybersquatting Consumer Protection Act ("ACPA") prohibits "cybersquatters" from registering internet domain names that are identical or confusingly similar to registered service marks and trademarks. See 15 U.S.C. § 1125(d)(1). The prohibition contained in § 1125(d)(1) applies when a domain name is identical or confusingly similar to a mark that is distinctive "at the time of registration of the domain name." Id. The primary question before us is whether the term "registration" applies only to the initial registration of the domain name, or whether it also applies to a re-registration of a currently registered domain name by a new registrant. We hold that such re-registration is not a "registration" within the meaning of § 1125(d)(1).

I. Background

Defendant Edward Hise registered the domain name gopets.com in his own name in March 1999. He developed a business *1027 plan for gopets.com as part of a marketing class in which he was then enrolled. According to the business plan, Hise and a cousin who was a veterinarian would develop the site into "a pet owner resource covering health, safety, nutrition, animal behavior, training, competition, abuse, pets and children, free advice from veterinarians, and the pet industry."

Edward and his brother Joseph Hise own the corporation Digital Overture. Among other things, the Hises perform internet-related services for clients, including registering and maintaining domain names. The Hises and Digital Overture (collectively, "the Hises") have registered more than 1300 domain names in the last decade. Most appear to be plausible names for future internet sites rather than names of existing businesses. They frequently register similar domain names at the same time. For instance, they registered ehinges.com, ebenches.com, erivets.com, and esconces.com on the same day.

In 2004, Erik Bethke founded the company GoPets Ltd. in Korea. GoPets Ltd. created a game called GoPets featuring virtual pets that move between the computers of registered users. GoPets Ltd. filed an application to register the service mark "GoPets" in the United States on September 30, 2004. The mark was duly registered in November 2006. The registration shows that the first use of the term in commerce occurred on August 20, 2004.

Beginning in 2004, Bethke made several unsuccessful attempts to purchase the gopets.com domain name from the Hises. In response to Bethke's initial email inquiry about the domain name, Edward Hise wrote on September 1, 2004, that he had initially been "dedicated to building a business" at gopets.com, but because his other web businesses were thriving, he was open to selling the domain name to a "serious buyer[ ]." He said he was holding an auction for the domain name and invited Bethke to submit a bid by September 15.

Bethke did not respond immediately. On October 11, he wrote to Edward Hise again, noting that Hise still owned the domain name—"so presumably you did not have any other serious offers." Bethke offered to pay $750 for the domain name. The Hises did not respond. In January 2005, Bethke again inquired about the domain name, this time through a friend. Edward Hise wrote back several months later, stating that he would not sell the domain name "for little or nothing" and that another group had offered to develop the site and share the profits. On May 16, 2005, Bethke wrote to Joseph Hise:

Last year in October I offered you $750 for the domain after declining to participate in your blind bidding system.
You also failed to answer our communications both in email as well as postal mail.
We are proceeding with the ICA[N]N domain dispute claim . . . .
. . .
My very last offer is $100—the exact same cost as going through ICA[N]N, and frankly that is generous for I would far rather donate our money to ICA[N]N.

ICANN, the Internet Corporation for Assigned Names and Numbers, is an international group that offers non-binding arbitration for adjudicating disputes over domain names. A year later, on May 23, 2006, GoPets Ltd. filed a complaint against Edward Hise with the World Intellectual Property Organization ("WIPO"), which administers ICANN's Uniform Dispute Resolution Policy.

On July 26, 2006, a WIPO arbitrator decided in favor of Edward Hise. The arbitrator found that the gopets.com domain name was confusingly similar to GoPets *1028 Ltd.'s service mark, and he "wishe[d]. . . to make it clear that [he was] unconvinced" that the Hises ever had serious plans to develop a website at gopets.com. Nevertheless, the arbitrator held that WIPO rules only compel the transfer of a disputed domain name if the name was initially registered in bad faith. Since Edward Hise had registered gopets.com five years before GoPets Ltd. was founded, gopets.com was not registered in bad faith.

On October 30, 2006, after the WIPO decision, Bethke offered to purchase gopets.com from the Hises for $5,000. After a telephone conversation, Bethke increased his offer to $40,000 on November 15. On November 20, Bethke emailed again, stating that his company owned the domain name gopetslive.com, and that they were about to begin a marketing campaign. They preferred to use gopets.com in the campaign and were still willing to pay $40,000 for it, but they needed to commit to a particular domain name by December 11. After December 11, "we would still be interested in gopets.com, but it loses all real urgency."

On December 12, Edward Hise sent Bethke an email, attaching a four-page letter. The email requested that Bethke forward the letter to GoPets Ltd.'s investors. The email stated that within forty-eight hours Hise would send the letter directly to the investors. The letter, signed by both Edward and Joseph Hise, presented what they called "Acquisition Considerations." It warned the investors that if GoPets Ltd. used the gopetslive.com domain name instead of gopets.com, the result would be to "continue to confuse newly adopted gopetslive.com" users. The letter noted that Bethke had said th

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GoPets Ltd. v. Hise, 657 F.3d 1024, 2011 WL 4394353 (9th Cir. 2011).

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