2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-15-2001

Shields v. Zuccarini

Precedential or Non-Precedential:

Docket 00-2236

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Recommended Citation

"Shields v. Zuccarini" (2001). 2001 Decisions. Paper 131.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/131
Filed June 15, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-2236 

JOSEPH C. SHIELDS, individually 

and trading as THE JOE CARTOON 

COMPANY 

v. 

JOHN ZUCCARINI, individually 

and trading as CUPCAKE CITY; 

NETWORK SOLUTIONS, INC.; 

INTERNET CORPORATION, FOR 

ASSIGNED NAMES AND NUMBERS 

John Zuccarini, Individually 

and trading as Cupcake City, 

 Appellant 

Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. No. 00-cv-00494) 

District Judge: Honorable Stewart Dalzell 

Argued: April 24, 2001 

Before: BARRY, AMBRO and ALDISER T, Circuit Judges.

(Filed: June 15, 2001) 

 Howard M. Neu (Argued) 

 1152 North University Drive 

 Pembroke Pines, Florida 33024 

 ATTORNEY FOR APPELLANT 
 Michael P. Coughlin 

 William J. Levant (Argued) 

 KAPLIN STEWART MELOFF 

 REITER & STEIN, P.C. 

 350 Sentry Parkway, Building 640 

 P.O. Box 3037 

 Blue Bell, Pennsylvania 19422-1240 

 ATTORNEYS FOR APPELLEE 

OPINION OF THE COURT 

ALDISERT, Circuit Judge. 

John Zuccarini appeals from the district court's grant of 

summary judgment and award of statutory damages and

attorneys' fees in favor of Joseph Shields under the new 

Anticybersquatting Consumer Protection Act ("ACPA" or 

"Act"). In this case of first impression in this court 

interpreting the ACPA, we must decide whether the district 

court erred in determining that r egistering domain names 

that are intentional misspellings of distinctive or famous 

names constitutes unlawful conduct under the Act. W e 

must decide also whether the district court abused its 

discretion by assessing statutory damages of $10,000 per 

domain name. Finally, we must decide whether the court 

erred in awarding attorneys' fees in favor of Shields based 

on its determination that this case qualified as an

"exceptional" case under the ACPA. W e affirm the judgment 

of the district court. 

The district court had jurisdiction pursuant to 28 U.S.C. 

S 1331. This court has jurisdiction by virtue of 28 U.S.C. 

SS 41 and 1291. 

I. 

Shields, a graphic artist from Alto, Michigan, creates, 

exhibits and markets cartoons under the names "Joe 

Cartoon" and "The Joe Cartoon Co." His cr eations include 

the popular "Frog Blender," "Micro-Gerbil" and "Live and 

Let Dive" animations. Shields licenses his cartoons to 

 2 
others for display on T-shirts, coffee mugs and other items, 

many of which are sold at gift stores acr oss the country. He 

has marketed his cartoons under the "Joe Cartoon" label 

for the past fifteen years. 

On June 12, 1997, Shields registered the domain name 

joecartoon.com, and he has operated it as a web site ever 

since. Visitors to the site can download his animations and 

purchase Joe Cartoon merchandise. Since April 1998, when 

it won "shock site of the day" from Macr omedia, Joe 

Cartoon's web traffic has increased exponentially, now 

averaging over 700,000 visits per month. 

In November 1999, Zuccarini, an Andalusia, 

Pennsylvania "wholesaler" of Internet domain names,1 

registered five world wide web variations on Shields's site: 

joescartoon.com, joecarton.com, joescartons.com, 

joescartoons.com and cartoonjoe.com. Zuccarini's sites 

featured advertisements for other sites and for credit card 

companies. Visitors were trapped or"mousetrapped" in the 

sites, which, in the jargon of the computer world, means 

that they were unable to exit without clicking on a

succession of advertisements. Zuccarini received between 

ten and twenty-five cents from the advertisers for every 

click. 

In December 1999, Shields sent "cease and desist" letters 

to Zuccarini regarding the infringing domain names.

Zuccarini did not respond to the letters. Immediately after 

Shields filed this suit, Zuccarini changed thefive sites to 

"political protest" pages and posted the following message 

on them: 

 This is a page of POLITICAL PROTEST 

 - Against the web site joecartoon.com - 

 joecartoon.com is a web site that depicts the mutilation 

 and killing of animals in a shockwave based cartoon 

 format -- many children are inticed [sic] to the web 

 site, not knowing what is really there and then 

 encouraged to join in the mutilation and killing 

_________________________________________________________________ 

1. "Wholesaling" refers to the practice of acquiring multiple domain 

names with the intent to profit from them. 

 3 
 through use of the shockwave cartoon pr esented to 

 them. 

 - Against the domain name policys [sic] of ICANN - 

 - Against the Cyberpiracy Consumer Protection Act - 

 As the owner of this domain name, I am being sued by 

 joecartoon.com for $100,000 so he can use this domain 

 to direct more kids to a web site that not only 

 desensitizes children to killing animals, but makes it 

 seem like great fun and games. 

 I will under no circumstances hand this domain name 

 over to him so he can do that. 

 I hope that ICANN and Network Solutions will not 

 assist him to attaining this goal. 

 -Thank YouShields v. Zuccarini, 89 F. Supp. 2d 634, 635-636 (E.D. Pa. 

2000). 

Shields's Complaint invoked the ACPA as well as federal 

and state unfair competition law and sought injunctive 

relief, statutory damages and attorneys' fees. The 

Complaint originally named Network Solutions, Inc. and the 

Internet Corporation for Assigned Names and Numbers as 

defendants, but on February 11, 2000, Shields filed a 

voluntary notice of dismissal with respect to these

defendants. 

On March 17, 2000, the district court denied Shields's 

Motion for Summary Judgment,2 holding that Zuccarini 

_________________________________________________________________ 

2. With respect to Shields's Motion for Summary Judgment on the ACPA 

claim, the district court noted the following: 

 (k) While this [Zuccarini's admission that he registered variations 

 of "joecartoon.com" because they were confusingly similar] 

 would seem to be clear evidence of Zuccarini's bad faith, he 

 claims in his response to the motion for summary judgment 

 that his use of the variations was fair and lawful, and that he 

 is using the domain names `for the purpose of exercising his 

 First Amendment rights of protest against the Plaintiff 's domain 

 which has objectionable and offensive material.' 

 4 
had raised a material issue of fact under the ACP A. After 

affording the parties a brief time for expedited discovery, 

the court held a hearing on Shields's request for injunctive 

relief. On March 22, 2000, the court enter ed a preliminary 

injunction in favor of Shields, which requir ed Zuccarini to 

transfer the infringing domain names to Shields and to 

refrain from "using or abetting the use of " the infringing 

domain names or any other domain names substantially 

similar to Shields's marks. 

On May 2, 2000, Shields filed a Renewed Motion for 

Summary Judgment. Zuccarini filed no response. On June 

5, 2000, the court entered an Order granting summary 

judgment in favor of Shields, holding that Zuccarini had 

registered five variations of Shields's name willfully, in bad 

faith, and in violation of the Act. On June 16, 2000, Shields 

filed a Motion for Attorneys' Fees and Costs pursuant to 15 

U.S.C. S 1117(a). Zuccarini opposed the Motion contending 

that his conduct did not rise to the level of exceptional 

circumstances and that the injunction pr ovided Shields 

with adequate relief. 

On July 18, 2000, the district court entered an Order 

and Judgment awarding statutory damages in the amount 

of $10,000 for each infringing domain name and attor neys' 

fees and costs in the amount of $39,109.46. Zuccarini filed 

a timely Notice of Appeal on July 26, 2000. 

II. 

We conduct plenary review of a grant of summary 

judgment, applying the same standard as the district court. 

Watson v. Eastman Kodak Co., 235 F .3d 851, 854 (3d Cir. 

2000). "Summary judgment is properly granted if `the 

pleadings, depositions, answers to interrogatories, and 

_________________________________________________________________ 

 (l) We find that Zuccarini's claim of fair use creates a genuine 

 issue of material fact precluding summary judgment at this 

 point, particularly since he only recently retained counsel and 

 had not yet had a full opportunity to take discovery or 

 formulate his defense. 

App. at 249 (emphasis added) (internal citations omitted). 

 5 
admissions on file, together with the affidavits, if any, show 

that there is no genuine issue as to any material fact and 

that the moving party is entitled to judgment as a matter of 

law.' " Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986) 

(quoting Rule 56(c), Federal Rules of Civil Pr ocedure). If the 

moving party meets the initial burden of showing that there 

is no genuine issue of material fact, the bur den shifts to the 

non-moving party to set forth specific facts showing the 

existence of such an issue for trial. Rule 56(e), Federal 

Rules of Civil Procedure. In reviewing the district court's 

grant of summary judgment, we must view the evidence in 

the light most favorable to the non-moving party. See 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). 

We review a trial court's award of statutory damages for 

abuse of discretion. Nihon Keizai Shimbun, Inc. v. Comline 

Business Data, Inc., 166 F.3d 65, 74 (2d Cir. 1999). Our 

review of the scope and the meaning of the ter m 

"exceptional," as used in 15 U.S.C. S 1117(a), is plenary. 

Securacomm Consulting, Inc. v. Securacom, Inc., 224 F.3d 

273, 279 (3d Cir. 2000). 

III. 

On November 29, 1999, the ACPA became law, making it 

illegal for a person to register or to use with the "bad faith" 

intent to profit from an Internet domain name that is 

"identical or confusingly similar" to the distinctive or 

famous trademark or Internet domain name of another

person or company. See 15 U.S.C. S 1125(d) (Supp. 2000). 

The Act was intended to prevent "cybersquatting," an 

expression that has come to mean the bad faith, abusive 

registration and use of the distinctive trademarks of others 

as Internet domain names, with the intent to profit from 

the goodwill associated with those trademarks. See S. Rep. 

No. 106-140 (1999), 1999 WL 594571, at *11-18. Under the 

ACPA, successful plaintiffs may r ecover statutory damages 

in an amount to be assessed by the district court in its 

discretion, from $1,000 to $100,000 per domain name. See 

15 U.S.C. S 1117(d) (Supp. 2000). In addition, successful 

plaintiffs may recover attorneys' fees in "exceptional" cases. 

See id. at S 1117(a). 

 6 
In Shields's Renewed Motion for Summary Judgment for 

relief under the Act, he asked the district court to (1) 

permanently enjoin Zuccarini from using the infringing 

domain names and any other domain names substantially 

similar thereto; (2) direct Zuccarini to transfer the 

infringing domain names to Shields; and (3) awar d 

attorneys' fees and statutory damages under 15 U.S.C. 

S 1117(a) and (d), respectively. 

In deciding whether to grant a permanent injunction, the 

district court must consider whether: (1) the moving party 

has shown actual success on the merits; (2) the moving 

party will be irreparably injured by the denial of injunctive 

relief; (3) the granting of the permanent injunction will 

result in even greater harm to the defendant; and (4) the 

injunction would be in the public interest. See ACLU v. 

Black Horse Pike Reg'l Bd. of Educ., 84 F .3d 1471, 1477 nn. 

2-3 (3d Cir. 1996). 

A. 

To succeed on his ACPA claim, Shields was required to 

prove that (1) "Joe Cartoon" is a distinctive or famous mark 

entitled to protection; (2) Zuccarini's domain names are 

"identical or confusingly similar to" Shields's mark; and (3) 

Zuccarini registered the domain names with the bad faith 

intent to profit from them. See 15 U.S.C. S 1125 (d)(1)(A); cf. 

Sporty's Farm L.L.C. v. Sportsman's Market Inc., 202 F.3d 

489, 497-499 (2d Cir. 2000).3 

_________________________________________________________________ 

3. Section 1125(d)(1)(A) of the Act provides in relevant part: 

 A person shall be liable in a civil action by the owner of a mark . 

. . 

 if, without regard to the goods or services of the parties, that 

person 

 (i) has a bad faith intent to profit from that mark, including a 

 personal name which is protected as a mark under this 

 section; and 

 (ii) registers, traffics in, or uses a domain name that -- 

 (I) in the case of a mark that is dist inctive at the time of 

 registration of the domain name, is identical or 

 confusingly similar to that mark; 

 (II) in the case of a famous mark that is famous at the time 

 of registration of the domain name, is identical or 

 confusingly similar to or dilutive of that mark. 
 7 
1. 

Under S 1125(d)(1)(A)(ii)(I) and (II), the district court first 

had to determine if "Joe Cartoon" is a"distinctive" or 

"famous" mark and, therefore, is entitled to protection 

under the Act. The following factors may be consider ed 

when making this inquiry: 

 (A) the degree of inherent or acquir ed distinctiveness of 

 the mark; (B) the duration and extent of use of the 

 mark in connection with the goods or services with 

 which the mark is used; (C) the duration and extent of 

 advertising and publicity of the mark; (D) the 

 geographical extent of the trading area in which the 

 mark is used; (E) the channels of trade for the goods or 

 services with which the mark is used; (F) the degr ee of 

 recognition of the mark in the trading ar eas and 

 channels of trade used by the marks' owner and the 

 person against whom the injunction is sought; (G) the 

 nature and extent of use of the same or similar marks 

 by third parties. 

15 U.S.C. S 1125(c)(1). 

Shields runs the only "Joe Cartoon" operation in the 

nation and has done so for the past fifteen years. This 

suggests both the inherent and acquired distinctiveness of 

the "Joe Cartoon" name. In addition to using the "Joe 

Cartoon" name for fifteen years, Shields has used the 

domain name joecartoon.com as a web site since June

1997 to display his animations and sell products featuring 

his drawings. The longevity of his use suggests that"Joe 

Cartoon" has acquired some fame in the marketplace. The 

New York Times ran a page one story that quoted Shields 

and cited Joe Cartoon. See Andrew Pollack, Show Business 

Embraces the Web, But Cautiously, N.Y . Times, Nov. 9, 

1999, at A1. 

Joe Cartoon T-shirts have been sold acr oss the country 

since at least the early 1990s, and its products appear on 

the web site of at least one nationally known r etail chain, 

Spencer Gifts. Shields has advertised in an online humor 

magazine with a circulation of about 1.4 million. The Joe 

Cartoon web site receives in excess of 700,000 visits per 

month, bringing it wide publicity. According to Shields, 

 8 
word-of-mouth also generates considerable inter est in the 

Joe Cartoon site. Shields trades nationwide in both real 

and virtual markets. The web site gives Joe Cartoon a 

global reach. Shields's cartoons and mer chandise are 

marketed on the Internet, in gift shops and at tourist 

venues. The Joe Cartoon mark has won a huge following 

because of the work of Shields. In light of the above, we 

conclude that "Joe Cartoon" is distinctive, and, with 

700,000 hits a month, the web site "joecartoon.com"

qualifies as being famous. Therefore, the trademark and 

domain name are protected under the ACP A. 

2. 

Under the Act, the next inquiry is whether Zuccarini's 

domain names are "identical or confusingly similar" to 

Shields's mark. The domain names --joescartoon.com,

joecarton.com, joescartons.com, joescartoons.com and 

cartoonjoe.com -- closely resemble "joecartoon.com," with a 

few additional or deleted letters, or, in the last domain 

name, by rearranging the order of the wor ds. To divert 

Internet traffic to his sites, Zuccarini admits that he 

registers domain names, including the five at issue here, 

because they are likely misspellings of famous marks or 

personal names.4 The strong similarity between these 

domain names and joecartoon.com persuades us that they 

are "confusingly similar." Shields also produced evidence of 

Internet users who were actually confused by Zuccarini's 

sites. See, e.g., Pltf 's Exh. 22, at [4] (copy of an email 

stating, "I tried to look up you[r] website yesterday 

afternoon and a protest page came up. W ill I have trouble 

entering the site at times because of this?"). 

On appeal, Zuccarini argues that registering domain

names that are intentional misspellings of distinctive or 

famous names (or "typosquatting," his ter m for this kind of 

conduct) is not actionable under the ACPA. Zuccarini 

contends that the Act is intended to prevent 

_________________________________________________________________ 

4. Zuccarini testified that he was amazed to learn that "people mistype 

[domain names] as often as they do," and thus variants on likely search 

names would result in many unintended visitors to his sites. Shields, 89 

F. Supp. 2d at 640. 

 9 
"cybersquatting," which he defines as r egistering someone's 

famous name and trying to sell the domain name to them 

or registering it to prevent the famous person from using it 

themselves. This argument ignores the plain language of 

the statute and its stated purpose as discussed in the 

legislative history. 

The statute covers the registration of domain names that 

are "identical" to distinctive or famous marks, but it also 

covers domain names that are "confusingly similar" to 

distinctive or famous marks. See 15 U.S.C. 

S 1125(d)(1)(A)(ii)(I), (II). A reasonable interpretation of 

conduct covered by the phrase "confusingly similar" is the 

intentional registration of domain names that are 

misspellings of distinctive or famous names, causing an 

Internet user who makes a slight spelling or typing error to 

reach an unintended site. The ACPA's legislative history 

contemplates such situations: 

 [C]ybersquatters often register well-known marks to 

 prey on consumer confusion by misusing the domain 

 name to divert customers from the mark owner's site to 

 the cybersquatter's own site, many of which ar e 

 pornography sites that derive advertising r evenue 

 based on the number of visits, or "hits," the site 

 receives. For example, the Committee was infor med of 

 a parent whose child mistakenly typed in the domain 

 name for `dosney.com,' expecting to access the family- 

 oriented content of the Walt Disney home page, only to 

 end up staring at a screen of hardcor e pornography 

 because a cybersquatter had registered that domain 

 name in anticipation that consumers would make that 

 exact mistake. 

S. REP. NO. 106-140 (1999), 1999 WL 594571, at *15 

(emphasis added). 

Although Zuccarini's sites did not involve por nography, 

his intent was the same as that mentioned in the legislative 

history above -- to register a domain name in anticipation 

that consumers would make a mistake, thereby increasing 

the number of hits his site would receive, and, 

consequently, the number of advertising dollars he would 

gain. We conclude that Zuccarini's conduct here is a classic 

 10 
example of a specific practice the ACPA was designed to 

prohibit. The district court properly found that the domain 

names he registered were "confusingly similar." 

3. 

The final inquiry under the ACPA is whether Zuccarini 

acted with a bad faith intent to profit fr om Shields's 

distinctive and famous mark or whether his conduct falls 

under the safe harbor provision of the Act. Section

1125(d)(1)(B)(i) provides a non-exhaustive list of nine 

factors for us to consider when making this deter mination: 

 (I) the trademark or other intellectual property rights of 

 the person, if any, in the domain name; (II) the extent 

 to which the domain name consists of the legal name 

 of the person or a name that is otherwise commonly 

 used to identify that person; (III) the person's prior use, 

 if any, of the domain name in connection with the bona 

 fide offering of any goods or services; (IV) the person's 

 bona fide noncommercial or fair use of the mark in a 

 site accessible under the domain name; (V) the 

 person's intent to divert consumers from the mark 

 owner's online location to a site accessible under the 

 domain name that could harm the goodwill r epresented 

 by the mark, either for commercial gain or with the 

 intent to tarnish or disparage the mark, by cr eating a 

 likelihood of confusion as to the source, sponsorship, 

 affiliation, or endorsement of the site; (VI) the person's 

 offer to transfer, sell, or otherwise assign the domain 

 name to the mark owner or any third party for 

 financial gain without having used, or having an intent 

 to use, the domain name in the bona fide of fering of 

 any goods or services, or the person's prior conduct 

 indicating a pattern of such conduct; (VII) the person's 

 provision of material and misleading false contact 

 information when applying for the registration of the 

 domain name, the person's intentional failur e to 

 maintain accurate contact information, or the person's 

 prior conduct indicating a pattern of such conduct; 

 (VIII) the person's registration or acquisition of multiple 

 domain names which the person knows are identical or 

 confusingly similar to marks of others that ar e 

 11 
 distinctive at the time of registration of such domain 

 names, or dilutive of famous marks of others that ar e 

 famous at the time of registration of such domain 

 names, without regard to the goods or services of the 

 parties; and (IX) the extent to which the mark 

 incorporated in the person's domain name registration 

 is or is not distinctive and famous within the meaning 

 of subsection (c)(1) of this section. 

Zuccarini's conduct satisfies a number of these factors. 

Zuccarini has never used the infringing domain names as 

trademarks or service marks; thus, he has no intellectual 

property rights in these domain names. See id. at (B)(i)(I). 

The domain names do not contain any variation of the legal 

name of Zuccarini, nor any other name commonly used to 

identify him. See id. at (B)(i)(II). Zuccarini has never used 

the infringing domain names in connection with the bona 

fide offering of goods or services. See id. at (B)(i)(III). He 

does not use these domain names for a non-commer cial or 

"fair use" purpose. See id. at (B)(i)(IV). He deliberately 

maintains these domain names to divert consumers fr om 

Shields's web site. In so doing, he harms the goodwill 

associated with the mark. He does this either for 

commercial gain, or with the intent to tar nish or disparage 

Shields's mark by creating a likelihood of confusion. See id. 

at (B)(i)(V). He has knowingly register ed thousands of 

Internet domain names that are identical to, or confusingly 

similar to, the distinctive marks of others, without the 

permission of the mark holders to do so.5 See id. at 

_________________________________________________________________ 

5. During his deposition and at the preliminary injunction hearing, 

Zuccarini admitted that he registered the variations of "Joe Cartoon," as 

well as thousands of other domain names, because they are confusingly 

similar to others' famous marks or personal names-- and thus are likely 

misspellings of these names -- in an effort to divert Internet traffic to 

his 

sites. He has registered obvious misspellings of celebrities' names, such 

as gwenythpaltrow.com, rikymartin.com, and britineyspears.com. He has 

also registered variations on popular pr oduct and web site names, like 

sportillustrated.com, mountianbikes.com, and msnchatrooms.com. 

Although we do not determine whether Zuccarini's conduct in each of 

these other cases is itself a violation of the Act, nonetheless his 

pattern 

of behavior is consistent with a bad faith intent to profit. See Northern 

Light Tech., Inc. v. Northern Lights Club, 236 F.3d 57, 65 (1st Cir. 

2001). 

 12 
(B)(i)(VIII). We have already established that Shields's mark 

is distinctive and famous. See id. at (B)(i)(IX). 

Zuccarini argues that his web sites wer e protected by the 

First Amendment because he was using them as selfdescribed "protest pages." Therefor e, he contends, his use 

falls under the safe harbor provision of S 1125(d)(1)(B)(ii), 

which states that "[b]ad faith intent . . . shall not be found 

in any case in which the court determines that the person 

believed and had reasonable grounds to believe that the use 

of the domain name was a fair use or otherwise lawful." The 

district court rejected this argument based on its 

conclusion that Zuccarini's claim of good faith and fair use 

was a "spurious explanation cooked up pur ely for this suit." 

Shields, 85 F. Supp. 2d at 640. W e agree. 

Zuccarini used his "Joe Cartoon" web sites for purely 

commercial purposes before Shields filed this action. 

Zuccarini was on notice that his use of the domain names 

was considered unlawful when he received the cease and 

desist letters from Shields in December 1999. Zuccarini 

continued to use the infringing domain names for 

commercial purposes until Shields filed this lawsuit. 

Zuccarini testified that he put up the protest pages at 3:00 

a.m. on February 1, 2000, just hours after being served 

with Shields's Complaint. Thus, by his own admission, 

Zuccarini submits that his alleged "fair use" of the 

offending domain names for "political pr otest" began only 

after Shields brought this action alleging a violation of the 

ACPA. We are aware of no authority providing that a

defendant's "fair use" of a distinctive or famous mark only 

after the filing of a complaint alleging infringement can 

absolve that defendant of liability for his earlier unlawful 

activities. Indeed, were there such authority we think it 

would be contrary to the orderly enforcement of the

trademark and copyright laws. 

We conclude that the district court pr operly rejected 

Zuccarini's argument that his web sites wer e protected 

under the safe harbor provision. There was sufficient 

evidence for the district court to find that Zuccarini acted 

with a bad faith intent to profit when he r egistered and 

used the five domain names at issue here. 

 13 
B. 

The district court correctly concluded that there is a 

substantial likelihood of confusion, as well as actual 

evidence of confusion, between Zuccarini's infringing 

domain names and the "Joe Cartoon" mark. In Opticians 

Ass'n v. Indep. Opticians, 920 F.2d 187, 196 (3d Cir. 1990), 

a trademark infringement case, we held that a finding of 

irreparable injury can be based on a finding of a likelihood 

of confusion. The district court determined that Shields will 

suffer damage to his reputation and a loss of goodwill if 

Zuccarini is allowed to operate his offending web sites. 

Shields's livelihood and fame depend, in lar ge part, on 

Internet users being able to access his sites, and he does 

not want his audience trapped in Zuccarini's sites or put off 

by images displayed thereon which they may attribute to 

him. The district court properly determined that Shields 

would be irreparably harmed if the court did not grant the 

permanent injunction. 

Zuccarini testified that he has more than thr ee thousand 

web sites and earns between $800,000 and $1,000,000 a 

year from their use. The court determined that any 

economic harm from the loss of the five infringing domain 

names would be trivial. In Opticians Ass'n, 920 F.2d at 197, 

this court held that, in trademark cases, "public interest 

. . . is a synonym for the right of the public not to be 

deceived or confused." Zuccarini admitted that he is in the 

business of profiting from the public's confusion and that 

he does, in fact, profit from this confusion. The district 

court properly concluded that this injunction would be in 

the public interest. 

The district court did not err in determining that the 

elements for granting a permanent injunction set forth in 

ACLU v. Black Horse Pike Reg'l Bd. of Educ., 84 F.3d 1471, 

1477 nn. 2-3 (3d Cir. 1996) were satisfied, thereby entitling 

Shields to a permanent injunction and summary judgment 

on his ACPA claim. 

IV. 

The Act provides for statutory damages for a violation of 

S 1125(d)(1) "in the amount of not less than $1,000 and not 

 14 
more than $100,000 per domain name, as the court 

considers just." 15 U.S.C. S 1117(d). Zuccarini argues that 

S 1117(d) does not apply to him because he r egistered the 

offending domain names before the ACP A became law. The 

district court held that Zuccarini's continued use of the 

domain names after November 29, 1999 subjects him to the 

statute's proscriptions and remedies. W e agree with the 

teachings of Virtual Works, Inc. v. Volkswagen of America, 

Inc., 238 F.3d 264, 268 (4th Cir. 2001) ("A person who 

unlawfully registers, traffics in, or uses a domain name 

after the ACPA's date of enactment, November 29, 1999, 

can be liable for monetary damages . . . .") (emphasis 

added); and E. & J. Gallo Winery v. Spider Webs Ltd., 129 

F. Supp. 2d 1033, 1047-1048 (S.D. Tex. 2001) (holding that 

defendant who registered domain name in bad faith could 

be held liable for statutory damages even though 

registration was prior to enactment of the ACP A when 

defendant continued to use web site after the enactment of 

the Act). 

In the alternative, Zuccarini argues that he only used the 

web site for sixty days after the passage of the ACP A and 

prior to this lawsuit being filed. He implies that, because he 

only used the web site for a short period of time, the 

district court's assessment of statutory damages was 

punitive in nature. Under the statute, the court has the 

discretion to award statutory damages that it "considers 

just" within a range from $1,000 to $100,000 per infringing 

domain name. See 15 U.S.C. S 1117(d). There is nothing in 

the statute that requires that the court consider the 

duration of the infringement when calculating statutory 

damages. We conclude that the district court properly 

exercised its discretion in awarding $10,000 for each 

infringing domain name. 

V. 

The ACPA provides that "[t]he court in exceptional cases 

may award reasonable attorney fees to the prevailing 

party." 15 U.S.C. S 1117(a). In trademark infringement 

cases, this court has held that "a district court must make 

a finding of culpable conduct on the part of the losing 

party, such as bad faith, fraud, malice or knowing 

 15 
infringement before a case qualifies as `exceptional.' " 

Ferrero U.S.A., Inc. v. Ozak T rading, Inc., 952 F.2d 44, 47 

(3d Cir. 1991). The district court found that Zuccarini acted 

willfully and in bad faith when he register ed the "Joe 

Cartoon" domain names in an effort to confuse people and 

to divert Internet traffic to his web sites for his own 

economic gain. The court found that Zuccarini conducted 

no bona fide business related to Joe Cartoon and that he 

had no basis on which to believe his use of the domain 

names was fair and lawful. 

Although the term "bad faith" is written into 

S 1125(d)(1)(A)(i) such that it is a thr eshold finding for any 

violation of the ACPA, we are persuaded that the district 

court made a proper finding that, under the circumstances, 

this case qualified as "exceptional" and merited the award 

of attorneys' fees under S 1117(a). 6 The record indicates 

that Zuccarini's conduct was particularly flagrant 7 and that 

he showed no remorse for his actions. The court stated that 

"based on the egregiousness of Zuccarini's conduct and his 

lack of contrition, we without hesitation hold that this is an 

`exceptional' case and that Shields was entitled to an award 

of attorneys' fees." App. at A25. The court's interpretation 

of what constitutes an "exceptional" case under the ACPA is 

proper. 

We have considered all contentions pr esented by the 

parties and conclude that no further discussion is 

necessary. 

The judgment and the award of statutory damages and

attorneys' fees will be affirmed. 

_________________________________________________________________ 

6. In determining that this case is "exceptional" under S 1117(a), we do 

so without deciding whether the finding of "bad faith" under 

S 1125(d)(1)(A)(i) automatically warrants an award of attorneys' fees 

under S 1117(a) and the case law that has interpreted that provision. See 

Ferrero U.S.A., Inc., 952 F .2d at 47. 

7. Between the issuance of the March 22, 2000 preliminary injunction, 

through the date of the determination that he violated the ACPA, and up 

until the date of the hearing to determine statutory damages and 

attorneys' fees and costs, Zuccarini r egistered an additional 1,644 

domain names that were common misspellings of other famous 

companies' and/or celebrities' names. 

 16 
A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 17