United Parcel Service of America, Inc. v. Net, Inc.

185 F. Supp. 2d 274, 51 Fed. R. Serv. 3d 1475, 2002 U.S. Dist. LEXIS 2319, 2002 WL 226531
CourtDistrict Court, E.D. New York
DecidedFebruary 15, 2002
Docket99 CV 7059(ADS)
StatusPublished
Cited by2 cases

This text of 185 F. Supp. 2d 274 (United Parcel Service of America, Inc. v. Net, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Parcel Service of America, Inc. v. Net, Inc., 185 F. Supp. 2d 274, 51 Fed. R. Serv. 3d 1475, 2002 U.S. Dist. LEXIS 2319, 2002 WL 226531 (E.D.N.Y. 2002).

Opinion

*275 MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

On January 26, 2000, prior to the defendants’ service of a responsive pleading, United Parcel Service of America, Inc. (“UPS” or the “plaintiff’) filed the amended complaint in this case. The amended complaint alleges that The Net, Inc., (“The Net”) and Does 1 through 10 (collectively, the “defendants”) engaged in trademark dilution and infringement, unfair competition, deceptive business practices, cyberpi-racy, and misappropriation of the plaintiffs goodwill, reputation, and business property. Presently before the Court are the following four motions: (1) a motion by The Net for reconsideration of the Court’s April 16, 2001 order denying its motion to vacate the default and directing The Net to retain counsel; (2) a motion by one Keith Maydak, (“Maydak”), who claims to be the sole proprietor of The Net, for leave to intervene in as a defendant; (3) a motion by Maydak to compel service of the summons and amended complaint on him; and (4) a motion by Maydak to dismiss the complaint as moot.

I. BACKGROUND

A. The Amended Complaint

The following facts are taken from the amended complaint. UPS is a corporation that ships documents and packages throughout the United States and the world. Since August 21, 1973, the plaintiff has owned Registration No. 966,744 on the Principal Register of the United States Patent and Trademark Office (“USPTO”) for the UPS mark covering the following services: “Transportation of personal property for hire by diverse modes of transportation.” UPS has extensively promoted and advertised the delivery and shipping services it provides under the UPS mark. The registered UPS trademark “has acquired an outstanding celebrity symbolizing the substantial and material good will that the plaintiff has created for the mark UPS throughout the world” (amended complaint ¶ 9).

The Internet is a network of computers interlinked by telecommunication lines. An Internet domain (“domain”) is a computer that “communicate[s] or interact[s] automatically with a remote sender of communications to the [d]omain over the Internet” (amended complaint ¶ 11). One type of domain is known as a World Wide Web Site (“web site”). Internet users access a domain, or a web site, by typing the web site’s domain name, which consists of a certain alphanumeric sequence. All domain names end with a three-letter suffix, known as “generic top level domains,” such as “.com”, “.net”, or “.edu”. According to the amended complaint, a common way to find a company’s domain is to type the company’s trademark or name followed by one of the three-letter suffixes.

In the past few years, web sites have become “the hub of substantial amounts of commercial” activity (amendment complaint ¶ 12). Many companies offer then-products and services over the Internet through their own established web sites or other domains. The amended complaint asserts that a company’s use of an Internet domain has become “a material, substantial part of the marketing, promotion and sales of goods and services in this country” (amended complaint ¶ 13). The amended complaint contends that, therefore, a company’s ability to use its registered trademark as its domain name for the web site operated by the company “is a material and substantial part of its opportunity to market, promote and sell products and services through this burgeoning medium” (amended complaint ¶ 16).

Domain names are assigned to registrants on a first-come, first-served basis by *276 an organization known as the InterNIC. Until recently, but at all times pertinent to the events in this case, the InterNIC’s domain name registration services were provided by Network Solutions, Inc. (“NSI”), a Virginia corporation.

On or about June 9, 1997, the defendants registered the domain name “ups. net” with the InterNIC through NSI. As a result, when an Internet user typed the name “ups.net”, he reached the defendants’ web site which featured “banner advertisements and link[ed the] web site with a pornographic web site” (amended complaint ¶ 22). The defendants completed NSI’s registration agreement which purports to bind the registrants to the terms of NSI’s “Domain Name Dispute Policy.” That policy provides, in relevant part, that when a company registers a domain name with NSI, the registrant represents that, to the best of its knowledge, the domain name does not interfere with or infringe upon the rights of a third party-

The amended complaint alleges that the defendants had actual and constructive notice of the plaintiffs rights in the mark UPS before they registered the name “ups.net”. The plaintiff has not licensed or authorized the defendants to use the mark UPS and has not authorized the defendants to register the domain name “ups. net”.

On March 10, 1998, UPS learned that The Net had registered the domain name “ups.net” and sent The Net a letter demanding that it transfer its registration of the domain name to UPS. The defendants never responded to the UPS letter.

UPS contacted NSI and asked NSI to take action under its “Domain Name Dispute Policy.” In a letter dated May 12, 1998, NSI wrote to the defendants, informing them of the plaintiffs complaint and directing them to comply with the procedures set forth in NSI’s Domain Name Dispute Policy. The defendants did not respond to NSI’s letter.

In a letter dated June 25, 1998, NSI informed the defendants that because they did not respond to NSI’s May 12, 1998 letter, the “ups.net” domain had been placed on a “hold” status, thereby preventing anyone from using the domain name. On January 1, 2000, NSI reactivated all domain names that had been suspended or placed on hold. Pursuant to NSI’s Domain Name Dispute Policy, NSI will not cancel, transfer, or otherwise change the defendants’ domain name except with the consent of the defendants or in response to a court or arbitral order.

UPS contends that as long as the defendants retain the registration for the domain name “ups.net”, UPS will not be able to create a web site with that domain name. UPS also alleges that the defendants have caused irreparable harm to the plaintiffs ability to use its own federally registered mark to identify its web site under the “net” generic top level domain, thereby preventing UPS from expanding its business via the Internet.

The amended complaint contains nine counts. As a first count, the plaintiff alleges that the defendants’ conduct dilutes and detracts from the distinctiveness of the plaintiffs famous trademark, with consequent damage to the plaintiff and the business and goodwill symbolized by the mark, in violation of the Federal Trademark Dilution Act, 15 U.S.C. § 1125(c). In the second count, UPS contends that the defendant’s registration and use of the domain name “ups.net” constitutes infringement of the plaintiffs federally-registered trademark in violation of Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1). The third and fourth counts allege that the defendants’ conduct consti *277

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Bluebook (online)
185 F. Supp. 2d 274, 51 Fed. R. Serv. 3d 1475, 2002 U.S. Dist. LEXIS 2319, 2002 WL 226531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-parcel-service-of-america-inc-v-net-inc-nyed-2002.