U.S. Court of Appeals Finds Domain Names to be Property

On August 23, 2002, the United States Court of Appeals released two interesting cybersquatting decisions which looked into the nature of in rem jurisdiction under the Anticybersquatting Consumer Protection Act ("ACPA"). In an in rem suit, the plaintiff takes action against property instead of individuals or organizations. In the case of cybersquatting, this means that the plaintiff would take action against the domain names instead of the persons or entities individually, who registered the domain names. In Porsche Cars N. AM., Inc. v. Porsche.net ("Porsche"), the plaintiff, the German sports car company, brought an in rem action against certain Internet domain names related to the name "Porsche". It sought an injunction that would transfer to it the right to use the domain names. The plaintiff contended that some of the domain names violated their rights under the ACPA. The Court of Appeals held that under the ACPA, the owner of a mark is permitted to file an in rem action against a domain name if the court finds that the owner is not able to obtain in personam jurisdiction over a person who would have been a civil defendant in an action concerning that domain name. However, the court stressed that the availability of personal jurisdiction may only defeat in rem jurisdiction over the domain name if the defendant submits to personal jurisdiction early in the anticybersquatting case. Submissions to personal jurisdiction three days before trial, by a defendant who received actual notice of the in rem action nine months earlier, was determined by the court to be "too late". The Court did not state exactly how long is "too late" to wait. In the second decision, Harrod's Ltd. v. Sixty Internet Domain Names ("Harrod's"), there was a dispute over Internet domain names between two companies named "Harrods", both with legitimate rights to the "Harrods" name in different parts of the world. The plaintiff, Harrods Limited ("Harrods UK"), is the owner of the well-known Harrods of London department store. The defendants were 60 Internet domain names registered in Herndon, Virginia, by Harrods (Buenos Aires) Limited ("Harrods BA"). Harrods BA, once affiliated with Harrods UK, is now a separate corporate entity that until recently operated a "Harrods" department store in Buenos Aires, Argentina. Harrods UK brought an in rem action against the 60 domain names under the ACPA. It alleged that the domain names infringed and diluted its American "Harrods" trade-mark and that Harrods BA had registered the domain names in bad faith. The Court of Appeals reversed the district court's decision as to whether ACPA authorizes an in rem action against domain names based on claims of infringement and dilution as well as bad faith registration. For a copy of the Porsche decision, visit: http://pacer.ca4.uscourts.gov/opinion.pdf/012028.p.pdf For a copy of the Harrod's decision, visit: http://pacer.ca4.uscourts.gov/opinion.pdf/002414.p.pdf For a copy of ACPA, visit: http://www.mama-tech.com/antipiracy.html