Lucas Nursery v. Grosse

• Court: Court of Appeals for the Sixth Circuit
• Decided: March 5, 2004
• Docket: 02-1668
• Status: Published

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Lucas Nursery and No. 02-1668 ELECTRONIC CITATION: 2004 FED App. 0071P (6th Cir.) Landscaping v. Grosse File Name: 04a0071p.06 _________________ UNITED STATES COURT OF APPEALS COUNSEL FOR THE SIXTH CIRCUIT ARGUED: Kevin L. Bennett, HEMMING, POLACZYK, _________________ CRONIN, SMITH & WITTHOFF, Plymouth, Michigan, for Appellant. Jeffrey D. Wilson, RAYMOND & PROKOP, LUCAS NURSERY AND X Southfield, Michigan, for Appellee. ON BRIEF: Kevin L. LANDSCAPING , INC., - Bennett, HEMMING, POLACZYK, CRONIN, SMITH & Plaintiff-Appellant, - WITTHOFF, Plymouth, Michigan, for Appellant. Jeffrey D. - No. 02-1668 Wilson, RAYMOND & PROKOP, Southfield, Michigan, for - Appellee. v. > , _________________ - MICHELLE GROSSE , - OPINION Defendant-Appellee. - _________________ - N R. GUY COLE, JR., Circuit Judge. Plaintiff-Appellant Appeal from the United States District Court Lucas Nursery and Landscaping, Inc. (“Lucas Nursery”) for the Eastern District of Michigan at Detroit. appeals the district court’s grant of summary judgment for No. 01-73291—Bernard A. Friedman, District Judge. Defendant-Appellee Michelle Grosse in this action alleging that Grosse violated the Anticybersquatting Consumer Argued: October 31, 2003 Protection Act, 15 U.S.C. § 1125(d)(1)(A) (2000) (“the ACPA”), by registering the domain name “lucasnursery.com” Decided and Filed: March 5, 2004 and creating a web site on which she detailed her complaints against Lucas for its allegedly bad service in landscaping her Before: BATCHELDER and COLE, Circuit Judges; front yard. The central issue on appeal is whether the district HOOD, District Judge.* court erred in granting summary judgment in favor of Grosse based upon its conclusion that the she did not act in bad faith within the meaning of the ACPA. For the reasons that follow, we AFFIRM the judgment of the district court. I. BACKGROUND This case arises from a dispute related to landscaping work * that was performed by Lucas Nursery at the residence of The Honorable Joseph M. Hood, United States District Judge for the Michelle Grosse. In March 2000, Grosse hired Lucas Eastern District of Kentucky, sitting by designation.

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Nursery to correct a dip in the soil (known as a swale) that ran on the web site, again describing her experience with Lucas horizontally through the center of her front yard. Lucas Nursery. Nursery’s representative, Bob Lucas, Jr., stated that the swale could be corrected by using five large loads of topsoil. Lucas Lucas Nursery filed suit against Grosse on August 17, Nursery performed the work on May 16, 2000. 2001. Thereafter, each party moved for summary judgment. On April 23, 2002, the district court denied Lucas Nursery’s Grosse contends that the work was performed inadequately. motion for summary judgment and granted Grosse’s motion After allegedly contacting Lucas Nursery on numerous for summary judgment. occasions to express her displeasure with the work and to seek some repair, Grosse filed a complaint with the Better II. ANALYSIS Business Bureau (“the BBB”). After the BBB ended its investigation without making a recommendation, Grosse A. Standard of Review remained dissatisfied by what she felt had been poor service by Lucas Nursery, and decided to inform others about her We review a district court’s decision to grant summary experience with the company. judgment de novo. Stephenson v. AllState Ins. Co., 328 F.3d 822, 826 (6th Cir. 2003). Summary judgment is proper if “the On August 12, 2000, Grosse registered the domain name pleadings, depositions, answers to interrogatories, and “lucasnursery.com.” She then posted a web page for the sole admissions on file, together with the affidavits, if any, show purpose of relaying her story to the public. The web page was that there is no genuine issue of material fact and that the titled, “My Lucas Landscaping Experience.” The web page moving party is entitled to a judgment as a matter of law.” included complaints regarding the poor preparation of the soil Fed. R. Civ. P. 56(c). When reviewing a motion for summary prior to Lucas Nursery’s laying of the sod, the hasty nature of judgment, the evidence, all facts, and any inferences that may Lucas Nursery’s work, the ineffectiveness of the BBB in be drawn from the facts must be viewed in the light most addressing her complaint, and the fact that she had to pay an favorable to the nonmoving party. Matshusita Elec. Indus. additional $5,400 to a second contractor to repair the work Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). originally performed by Lucas Nursery. However, a “mere scintilla” of evidence is insufficient; the evidence must be such that a reasonable jury could find in On September 27, 2000, Grosse received a letter from favor of the plaintiff. Anderson v. Liberty Lobby, Inc., 477 Lucas Nursery’s attorney demanding that she cease operating U.S. 242, 252 (1986). the web site. On October 2, 2000, Grosse removed the web site’s content. However, after removing the web site’s B. The ACPA content, Grosse contacted the Michigan Bureau of Commercial Services Licensing Division and the U.S. Patent “The ACPA was enacted in 1999 in response to concerns & Trademark Office to determine whether there was a over the proliferation of cybersquatting – the Internet version registered trademark for Lucas Nursery. After learning that of a land grab.” Virtual Works, Inc. v. Volkswagen of no trademark registration existed, Grosse concluded that America, Inc., 238 F.3d 264, 267 (4th Cir. 2001). It was Lucas Nursery could not prevent her from retaining the enacted because then-existing law did not expressly prohibit web site. On April 13, 2001, Grosse posted a new narrative the practice of cybersquatting, and cybersquatters had begun No. 02-1668 Lucas Nursery and 5 6 Lucas Nursery and No. 02-1668 Landscaping v. Grosse Landscaping v. Grosse

to insulate themselves from liability under the Federal 2. Bad Faith Analysis Trademark Dilution Act, 15 U.S.C. § 1125. Id. In order for liability to attach under the ACPA a court must In the Senate Report accompanying the ACPA, conclude that the defendant’s actions constitute “bad faith.” cybersquatters are defined as those who: (1) “register well- ACPA § 3002 (codified at 15 U.S.C. § 1125(d)(1)(A)-(B)). known brand names as Internet domain names in order to An analysis of whether a defendant’s actions constitute bad extract payment from the rightful owners of the marks;” faith within the meaning of the ACPA usually begins with (2) “register well-known marks as domain names and consideration of several factors, nine of which are listed in the warehouse those marks with the hope of selling them to the ACPA. See Sporty’s Farm v. Sportman’s Market, Inc., 202 highest bidder;” (3) “register well-known marks to prey on F.3d 489, 498 (2d Cir. 2000). The first four factors are those consumer confusion by misusing the domain name to divert that militate against a finding of bad faith by providing some customers from the mark owner’s site to the cybersquatter’s reasonable basis for why a defendant might have registered own site;” (4) “target distinctive marks to defraud consumers, the domain name of another mark holder. These factors focus including to engage in counterfeiting activities.” S. REP. NO . on: whether the defendant has trademark or other rights in the 106-140 at 5-6. domain name; the extent to which the domain name consists of the defendant’s legal name or other common name; any Pursuant to the ACPA, a cybersquatter is potentially liable prior use of the domain name for the offering of goods and to the owner of a protected mark if that person: services; and the bona fide noncommercial use of the site. (i) has a bad faith intent to profit from the mark . . . ; and Each of the first three factors cuts against Grosse. She does (ii) registers, traffics in, or uses a domain name that -- not hold a trademark or other intellectual property rights to (I) in the case of a mark that is distinctive . . . , is the domain name or names included in the registered domain identical or confusingly similar to that mark; name. The domain name neither consists of her legal name (II) in the case of a famous mark . . . , is identical or or any name used to refer to her. Grosse has also not used the confusingly similar to or dilutive of that mark; or domain name in connection with any offering of goods or (III) is a trademark, word, or name protected by reason of services. The fourth factor cuts in Grosse’s favor because the section 706 of Title18 or section 220506 of Title 36. site was used for noncommercial purposes. 15 U.S.C. § 1125(d)(1)(A). Factors five through eight are indicative of the presence of bad faith on the part of the defendant. These factors focus on: 1. Non-Commercial Activity and the ACPA whether the defendant seeks to divert consumers from the mark holder’s online location either in a way that could harm Although there is some dispute between the parties as to good will or tarnish or disparage the mark by creating a whether the ACPA covers non-commercial activity, we see no confusion regarding the sponsorship of the site; whether there reason to consider these arguments, as the statute directs a has been an offer to transfer or sell the site for financial gain; reviewing court to consider only a defendant’s “bad faith whether the defendant provided misleading contact intent to profit” from the use of a mark held by another party. information when registering the domain name; and whether We, therefore, turn to this consideration. No. 02-1668 Lucas Nursery and 7 8 Lucas Nursery and No. 02-1668 Landscaping v. Grosse Landscaping v. Grosse

the defendant has acquired multiple domain names which Lucas Nusery contends that the Fourth Circuit’s decision in may be duplicative of the marks of others. People for the Ethical Treatment of Animals (PETA) v. Doughney, 263 F.3d 359 (4th Cir. 2001), is applicable to the The paradigmatic harm that the ACPA was enacted to instant action. Although the defendant in Doughney did not eradicate – the practice of cybersquatters registering several make commercial use of his web site, the court concluded that hundred domain names in an effort to sell them to the he had, nonetheless, acted with a bad faith intent to profit. legitimate owners of the mark – is simply not present in any Doughney had “made statements on his website and in the of Grosse’s actions. In its report on the ACPA, the Senate press recommending that PETA attempt to ‘settle’ with him Judiciary Committee distilled the crucial elements of bad faith and ‘make him an offer’” and that he had “registered other to mean an “intent to trade on the goodwill of another’s domain names that [were] identical or similar to the marks or mark.” S. REP. NO . 106-140, at 9. See also Ford Motor Co. names of other famous people and organizations.” Id. at 369. v. Catalanotte, 342 F.3d 543, 549 (6th Cir. 2003) Here, Grosse has engaged in no such offensive conduct. (“Registering a famous trademark as a domain name and then offering it for sale to the trademark owner is exactly the Lucas Nursery seeks to buttress its argument with Toronto- wrong Congress intended to remedy when it passed the Dominion Bank v. Karpachev, 188 F. Supp. 2d 110 (D. Mass. ACPA.”). There is no evidence that this was Grosse’s 2002). There, the district court granted Toronto-Dominion’s intention when she registered the Lucas Nursery domain motion for summary judgment against the defendant, name and created her web site. It would therefore stretch the concluding that there was sufficient evidence to show that the ACPA beyond the letter of the law and Congress’s intention defendant had acted in bad faith under the ACPA. The to declare anything to the contrary. defendant, a disgruntled customer, registered sixteen domain names composed of various misspellings of the name None of these factors militates against Grosse. There is no tdwaterhouse.com. Id. at 111. On the web sites associated dispute that Lucas Nursery did not have an online location, with these names, the defendant attacked Toronto-Dominion and hence Grosse’s creation of a web site to complain about for “webfacism” and involvement with white collar crime, Lucas Nursery’s services could not have been intended “to among other things. Id. at 112. The court concluded that the divert consumers from the mark owners’s online location.” defendant had acted in bad faith, citing four factors: (1) his Nor is there any evidence that Grosse ever sought to mislead intention to divert customers from the “tdwaterhouse” consumers with regard to the site’s sponsorship. The web site web site by creating confusion as to its source or sponsorship; explicitly stated that the site was established by Grosse for (2) the fact that he had registered sixteen domain names; (3) the purposes of relaying her experience with Lucas Nursery. the fact that he offered no goods or services on the site; and Moreover, Grosse never offered to sell the site to Lucas (4) the fact that he had no intellectual property rights in the Nursery. She also did not provide misleading contact site. See id. at 114. information when she registered the domain name. Finally, she has not acquired any additional domain names, which Although Grosse’s actions would arguably satisfy three of would be indicative of either an intent to sell such names to the four aforementioned factors, she does not fall within the those entities whose trademarks were identical or similar, or factor that we consider central to a finding of bad faith. She exploit them for other uses. did not register multiple web sites; she only registered one. Further, it is not clear to this Court that the presence of simply No. 02-1668 Lucas Nursery and 9 Landscaping v. Grosse

one factor that indicates a bad faith intent to profit, without more, can satisfy an imposition of liability within the meaning of the ACPA. The role of the reviewing court is not simply to add factors and place them in particular categories, without making some sense of what motivates the conduct at issue. The factors are given to courts as a guide, not as a substitute for careful thinking about whether the conduct at issue is motivated by a bad faith intent to profit. Perhaps most important to our conclusion are, Grosse’s actions, which seem to have been undertaken in the spirit of informing fellow consumers about the practices of a landscaping company that she believed had performed inferior work on her yard. One of the ACPA’s main objectives is the protection of consumers from slick internet peddlers who trade on the names and reputations of established brands. The practice of informing fellow consumers of one’s experience with a particular service provider is surely not inconsistent with this ideal. CONCLUSION For the foregoing reasons, we AFFIRM the district court’s grant of summary judgment in favor of Grosse.