Source: https://www.scribd.com/doc/138862842/Facebook-Typosquatter-Ruling
Timestamp: 2017-03-30 08:22:41
Document Index: 272450510

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Facebook Typosquatter Ruling | Facebook | Default Judgment
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Plaintiff Facebook, Inc. (“Facebook”) moves for default judgment against defendants Counter Balance Enterprises Ltd., Intercontinental Domain Inc., Mackrooner Ltd., Inc., Newgate Services Ld., Inc. (also known as SMTM Enterprises Ltd.;; hereinafter referred to as “Newgate”), Pioneer Enterprises Ltd., YourTick, Paul Baker, Reggie Bush, Karrie-Lee Kareeman, Michael Suggs (doing business as Michael Timothy Suggs, Timothy Suggs, FB Promotions/Freebie Promos, and Rabbit GoGo Media LLC;; hereinafter referred to as “Suggs”), and Cleanser Products (collectively referred to as “Default Defendants”) under the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d). (Pl.’s Mot. for Default J., Dkt. No. 146.) None of these Default Defendants formally appeared in this action, nor did they respond to Facebook’s complaint or motion for default judgment.1 Plaintiff asks the court to provide injunctive relief, order the transfer of all infringing domain names to Facebook, and to award statutory damages
Plaintiff Facebook is a free online network that helps people connect and share with their friends, family, and the world around them. (Pl.’s Mot. Default J. (Pl.’s Mot.) at 1; First Am. Compl. (“FAC”), Dkt. No. 36, ¶ 25.) Facebook owns numerous trademarks and service marks (collectively “Facebook marks”) which have been registered with the United States Patent and Trademark Office. (FAC, ¶ 29; Ex. D.) Facebook has continuously used its marks in interstate commerce in the United States in connection with its online networking services since 2004. (FAC, ¶31.) Facebook asserts that its marks are recognizable to users and advertisers, and are famous within the meaning of 15 U.S.C. § 1125(c). (FAC, ¶32;; Pl.’s Mot. at 2.) Each of the default defendants registered at least one Internet domain name that includes or misspells the FACEBOOK domain, facebook.com, (hereinafter “infringing domain names”) or —in the case of Cleanser Products—owned and operated websites to which Internet users were redirected when they visited infringing domain names (hereinafter “landing websites” or “landing pages”). (FAC, Ex. A.; Decl. of Ryan Spear in Support of Pl.’s Mot. for Default J. (“Spear Decl.”), Ex. A.) Some owners of the infringing domain names worked with Cleanser Products to divert Internet users who were attempting to log-on to Facebook, but who accidentally misspelled the domain, to instead reach deceptive, typosquatting sites, which then redirected users to a landing website that looked like Facebook, but was owned by Cleanser Products. (See FAC, ¶¶ 15-16, 70113, 120-136;; Pl.’s Mot. at 2-3.) Facebook filed the instant suit on July 22, 2011 alleging cybersquatting under 15 U.S.C. § 1125(d), federal trademark infringement under 15 U.S.C. § 1114, false designation of origin under 15 U.S.C. § 1125(a), trademark dilution under 15 U.S.C. § 1125(c), breach of contract, and tortious interference with prospective economic advantage. (Dkt. No. 1.) Facebook filed its First Amended Complaint on December 12, 2011 alleging the same causes of action. (Dkt. No. 36.)
B. Subject Matter Jurisdiction This Court has subject matter jurisdiction over this matter because Facebook raises claims under federal law, specifically the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d). C. Personal Jurisdiction 1. This Court has general personal jurisdiction over Defendant Reggie Bush who resides in California. Defendant Reggie Bush resides in California. See FAC, Ex. A ¶ 21. Therefore, Bush is subject to this Court’s general personal jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853-54 (2011) (“For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile;; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.”). 2. This Court has specific personal jurisdiction over remaining Default Defendants. a. Nonresident Default Defendants are subject to specific personal jurisdiction under California’s long-arm statute. California’s long-arm statute authorizes specific personal jurisdiction over nonresident defendants to the full extent permitted by the Due Process Clause of the United States Constitution. See Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). Thus, this Court may assert specific personal jurisdiction over nonresident defendants if three requirements are met: (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant’s forum-related activities; and (3) exercise of jurisdiction must be reasonable. Id. (quotation marks and citation omitted). Facebook bears the burden of satisfying the first two requirements;; the burden then shifts to the Default Defendants to present a “compelling case” that United States District Court Northern District of California
were designed so that, when they were viewed in California, they displayed text specifically targeting California users. (See Spear Decl. ¶ 13 & Ex. C.) In sum, the Default Defendants made money by confusing Facebook users, including users in California, and capitalizing on this confusion—some of which was based on defendants’ misuse of Facebook’s marks, typesetting, and color scheme. This constitutes aiming their conduct at Facebook and this forum. See, e.g., CollegeSource, 653 F.3d at 1077 (“[W]e have held that the ‘expressly aimed’ prong of the purposeful direction test can be met where a plaintiff alleges that the defendant individually targeted him by misusing his intellectual property on the defendant’s website for the purpose of competing with the plaintiff in the forum.”) (citation omitted);; Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1020 (9th Cir. 2002) (“[O]perating even a passive website in conjunction with ‘something more’—conduct directly targeting the forum—is sufficient to confer personal jurisdiction.”);; eAdGear, Inc. v. Liu, No. CV-11-05398 JCS, 2012 WL 2367805, at *7 (N.D. Cal. June 21, 2012) (express aiming found where defendant used an infringing domain name to “confus[e] consumers as to the origin of Defendant’s services”) Third, the nonresident Default Defendants knew they would cause harm in California because their schemes depended on diverting users from Facebook, a company they knew to be located in California. See also craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039, 1053 (N.D. Cal. 2010) (“Because Plaintiff is headquartered in California and maintains its website in California, Defendants’ actions directly targeted California, and Defendants knew that Plaintiff would suffer the brunt of its harm in California.”). ii. Arising from forum-related activities
This element is established if Facebook would not have been injured “but for” the nonresident Default Defendants’ forum-related activities. See Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995). As explained above, the nonresident Default Defendants’ expressly targeted Facebook and California residents, and Facebook suffered injury from those schemes in this forum. See CollegeSource, 653 F.3d at 1079 (“We have repeatedly held that a corporation incurs economic loss, for jurisdictional purposes, in the forum of its principal place of business.”);; Nissan, 89 F. Supp. 2d at 1160 (“[T]he defendant’s intentional exploitation of the plaintiffs’ 7
Here, each of Counter Balance’s domain names differs from the FACEBOOK mark by a single letter. Counter Balance’s domain names are therefore confusingly similar under the ACPA. See, e.g., Shields, 254 F.3d at 484. Counter Balance acted with a bad-faith intent to profit from the FACEBOOK mark by virtue of its registration and usage of infringing domain names to divert traffic from Facebook’s website in an effort to deceive users and make money. See, e.g., Citigroup Inc. v. Malik, No. 1:07cv1168, 2009 WL 874497, at *3 (E.D. Va. Mar. 24, 2009) (bad faith found where “defaulting defendants’ use of plaintiffs’ Marks evidence[d] an attempt to confuse plaintiffs’ customers and divert consumers looking for information about plaintiffs’ services to web pages represented by the Infringing Domain Names”);; Verizon California Inc. v. Navigation Catalyst Sys., Inc., 568 F. Supp. 2d 1088, 1096 (C.D. Cal. 2008) (“It is clear that [defendants’] intent was to profit from the poor typing abilities of consumers trying to reach Plaintiffs’ sites: what other value could there be in a name like ve3rizon.com?”);; Elec. Boutique Holdings Corp. v. Zuccarini, No. Civ. A. 004055, 2000 WL 1622760, at *5, *8 (E.D. Pa. Oct. 30, 2000) (“[Defendant’s] bad-faith intent to profit from the domain misspellings is abundantly clear. [Defendant] registered the domain misspellings in order to generate advertising revenue for himself, despite being aware of [plaintiff’s] stores and website.”). The registration of typosquatting domains shows Counter Balance’s intent to illicitly profit from the FACEBOOK mark, as there is no value independent of the infringement, as evidenced by the lack of association with any bona fide goods or services. Other bad-faith factors set forth in the ACPA also weigh against Counter Balance, including the purposeful “diver[sion of] consumers from [Facebook’s] online location to a site...that could harm the goodwill represented by the [FACEBOOK] mark...for commercial gain.” 15 U.S.C. § 1125(d)(1)(B)(i)(V). In addition, Counter Balance’s infringing domain names do not consist of Counter Balance’s legal name, were not used “in connection with the bona fide offering of any goods or services,” and Counter Balance registered multiple domain names that infringed on Facebook’s famous and distinctive marks. 15 U.S.C. § 1125(d)(1)(B)(i)(II), (III), (VIII).
<fcfacebook.com>, <feacboo.com>, <feacbooke.com>, <fecbbok.com>, <feook.com>, <ferabook.com>, <fescebook.com>, <ficeboock.com>, <thefacebookl.com>, <wwwfacbook.com>, <wwwfacebppk.com>, <wwwfcaebook.com>, <wwwfeibook.com>, and <wwwrfacebook.com>. (See FAC ¶¶ 15-16, 70-113, 120-36; id., Ex. A ¶ 8; see also Spear Decl. ¶ 11 & Ex. A.) Four of Newgate’s infringing domain names redirected users to landing pages owned and operated by Default Defendant Cleanser Products. Newgate’s domain names are confusingly similar to Facebook’s famous and distinctive FACEBOOK mark because they either incorporate the correctly-spelled FACEBOOK mark (10 domains) or differ from the FACEBOOK mark by one or a few letters. Newgate acted with a bad-faith intent to profit from the FACEBOOK mark, by registering and using infringing domain names to divert traffic from Facebook’s website in an effort to deceive users and make money. Notably, Newgate’s misconduct was extensive and deliberate—it registered and used nearly 50 infringing domain names, demonstrating Newgate’s bad faith. See, e.g., Navigation Catalyst, 568 F. Supp. 2d at 1096; see also 15 U.S.C. § 1125(d)(1)(B)(i)(VIII) (registration of multiple infringing domains as bad faith factor). Moreover, the remaining statutory bad-faith factors weigh against Newgate for the same reasons they weigh against the previously discussed Default Defendants. Lastly, Newgate cannot invoke the ACPA’s safe harbor because it used the FACEBOOK mark to deceive users and profit from Facebook’s fame, rather than to engage in parody, comment, or another lawful use. For the reasons set forth above, Facebook has adequately stated a plausible ACPA claim against Newgate. e. Pioneer Enterprises Ltd. (“Pioneer”) Pioneer registered and used at least the following nine domain names: <dacebook.com>, <facebokook.com>, <faceboocklogin.com>, <faacebok.com>, <facebookfreezer.com>, <facebooll.com>, <facegbook.com>, <gfacebook.com>, and <zh-facebook.com>. (See FAC ¶¶ 15-16, 70-113, 120-36; id., Ex. A ¶ 9; see also Spear Decl. ¶ 11 & Ex. A.) Two of Pioneer’s United States District Court Northern District of California
least one of Bush’s infringing domain names redirected users to a landing page owned and operated by Default Defendant Cleanser Products. Bush’s domain names are confusingly similar to Facebook’s famous and distinctive FACEBOOK mark because each differs from the FACEBOOK mark by a single letter. Bush acted with a bad-faith intent to profit from the FACEBOOK mark, by registering and using an infringing domain name to divert traffic from Facebook’s website in an effort to deceive users and make money. Those circumstances demonstrate his bad faith. See, e.g., Navigation Catalyst, 568 F. Supp. 2d at 1096. Moreover, the statutory bad-faith factors weigh against Bush for the same reasons they weigh against the previously discussed Default Defendants. Lastly, Bush cannot invoke the ACPA’s safe harbor because he used the FACEBOOK mark to deceive users and profit from Facebook’s fame, rather than to engage in parody, comment, or another lawful use. For the reasons set forth above, Facebook has adequately stated a plausible ACPA claim against Bush. i. Karrie-Lee Karreman (“Karreman”) Karreman registered and used at least the following domain name: <yourfacebooksurvey.com>. (See FAC ¶¶ 15-16, 70-113, 120-36; id., Ex. A ¶ 30; see also Spear Decl. ¶ 11 & Ex. A.) Karreman’s domain name is confusingly similar to Facebook’s famous and distinctive FACEBOOK mark because it incorporates the correctly-spelled FACEBOOK mark and adds generic terms (“your” and “survey”). Karreman acted with a bad-faith intent to profit from the FACEBOOK mark, by registering and using an infringing domain name to divert traffic from Facebook’s website in an effort to deceive users and make money. Furthermore, Karreman is a serial cybersquatter who has been sued by other mark owners for virtually identical conduct. (See Spear Decl. ¶ 16 & Ex. E.) Those circumstances demonstrate Karreman’s bad faith. See, e.g., Lahoti, 586 F.3d at 1194 n.2 (“However, we would be remiss if we did not note Lahoti’s cybersquatting activities, because they are relevant under the ACPA to whether a person acted in bad faith.”);; Navigation Catalyst, 17
¶ 11 & Ex. A). Cleanser Products then used these domains to host landing pages designed to resemble Facebook’s website. (See, e.g., FAC ¶¶ 81-113 (describing three typosquatting schemes using landing websites operated by Cleanser Products).) Facebook alleges that at least 10 owners of infringing domains used these landing pages to monetize their typosquatting schemes. (Pl.’s Mot., at 26-28.) Cleanser Products then monetized the redirected traffic from the direct infringers’ domains by encouraging visitors to divulge personal information, view and click on advertisements, and purchase products on its landing websites. (See, e.g., FAC ¶¶ 81-113.) Cleanser Products and the direct infringers shared the proceeds of the typosquatting schemes consummated on Cleanser Products’s landing websites. See id. ¶¶ 1, 15, 16, 71-73, 86, 130, 133. Therefore, Cleanser Products exercised “[d]irect control and monitoring of the instrumentality used... to infringe plaintiff’s mark.” Lockheed, 194 F.3d at 984-85. Moreover, there are several “exceptional circumstances” indicating that Cleanser Products knew that its landing websites were being used to monetize typosquatting schemes. First, Cleanser Products knew that its landing websites received traffic redirected from infringing domain names. (See FAC ¶¶ 70-77.) Second, the landing websites hosted by Cleanser Products were intentionally designed to resemble Facebook’s website. The only plausible purpose for such websites is to aid and abet typosquatting schemes targeting Facebook. Third, the landing websites operated by Cleanser Products were implicated in a “widespread pattern of cybersquatting” involving at least 10 direct infringers and 60 infringing domain names. (Pl.’s Mot., at 29;; See also Above.com, 2011 WL 8472379, at *6.) Fourth, Cleanser Products profited from the typosquatting schemes. (See FAC ¶¶ 70-77.) And fifth, Cleanser Products refused to participate in this litigation, thereby preventing Facebook from learning the full extent of its illegal conduct. Taken together, it is apparent that Cleanser Products was aware of the direct infringers’ bad faith intent to profit from the Facebook mark—and that Cleanser Products shared that intent. See Above.com, 2011 WL 8472379, at *6 (plaintiff adequately alleged contributory liability by alleging that (1) “defendants controlled and monitored the privacy and monetization services [used by direct infringers], so they were aware that those services were being used for cybersquatting”;; (2) defendants “profited from the monetization service, and it is reasonable to infer that Defendants 21
were aware of and monitored these revenue streams”;; and (3) defendants were implicated in a “widespread pattern of cybersquatting”). In sum, Cleanser Products provided deceptive landing websites to monetize illicit Internet traffic from infringing domain names, with full knowledge that those direct infringers with whom it collaborated were seeking to profit in bad faith from Facebook’s mark. Therefore, Cleanser Products is contributorily liable under the ACPA. 3. Sum of money at stake The fourth factor focuses on the amount at issue in the action, as courts should be hesitant to enter default judgments in matters involving large sums of money. “When the money at stake in the litigation is substantial or unreasonable, default judgment is discouraged.” Bd. of Trs. v. Core Concrete Const., Inc., No. C 11-2532 LB, 2012 WL 380304, at *4 (N.D. Cal. Jan. 17, 2012) (citing Eitel, 782 F.2d at 1472). However, when “the sum of money at stake is tailored to the specific misconduct of the defendant, default judgment may be appropriate.” Id. (citations omitted). The ACPA provides for statutory damages of $1,000 to $100,000 per infringing domain name. See 15 U.S.C. § 1117(d). Facebook is seeking the maximum statutory damages of $100,000 per infringing domain name. (Pl.’s Mot. at 29.) This would total over $26,000,000 in damages if it were to be awarded. As the severity of the conduct of these defendants differs, the Court believes that the recommended damages outlined below are appropriately tailored to the specific misconduct of the default defendants in this case, and reasonable under Eitel. See discussion infra Part III. 4. The possibility of a dispute concerning material facts With respect to the fifth prong, Default Defendants have not participated in this action and have not made any attempt to contest any of Plaintiff’s material facts or legal assertions or moved to set aside the entry of default, despite being served with all pleadings filed by Plaintiff. Theoretically, if the material facts were found to be untrue, the effect of a permanent injunction on any non-use of the Facebook marks and the transfer of the infringing domain names would be negligible, because there would be no legitimate conduct to be enjoined, and Default Defendants could move to set aside the default judgment awarding statutory damages. 22
Suggs, Dkt. No. 7.) During informal discovery, and without making a formal appearance in this litigation, Suggs admitted to registering 100 additional domains, all presumably in violation of the ACPA. At the hearing, Plaintiff informed the Court that Suggs decided to break off contact during settlement negotiations and, instead, declined to participate resulting in his entry of default. The Court, in recommending that default judgment be entered, declines to recommend statutory damages for those domains not identified in the FAC, as the scope of relief available on default judgment is generally limited to the pleadings. This does not mean, however, that Facebook does not have a right to those domains, and, in fact, the Court, in exercising its discretion, recommends below that all 128 domains be transferred to Facebook. As to the ACPA factors, of the 28 domains, 19 redirect Internet traffic to Cleanser Products’ landing websites. In addition, one of Suggs’ alter egos is called FB Promotions, with the “FB” presumably used to mislead users to believe that there is a legitimate connection with Facebook. Facebook’s Motion for Default Judgment contains three domains that were not originally attributed to Suggs and should not be included in any damages award. Domains <wwwfacebkook.com>, <wwwfacebnook.com>, and <wwwfacebo0k.com> are not attributed to Suggs in either the First Amended Complaint or the chart in Plaintiff’s Motion for Default Judgment. (See generally FAC, Exh. A;; Pl.’s Mot., at 28). As a result, the Court cannot order the transfer of domains from unknown individuals, and so no damages will be assessed against Suggs for those domains, nor will they be ordered transferred, as ownership has not been established. In light of these factors, this Court recommends that Suggs be ordered to pay $15,000 in damages for each of the originally identified 28 infringing domains. In addition, the Court recommends that the double-multiplier be applied for the 19 domains that redirect users to Cleanser Products. Thus, the total recommended damages award is $705,000. 11. Cleanser Products Plaintiffs seek $100,000 in damages for each of at least 60 infringing domain names that redirected traffic from typosquatter domains to landing pages operated by Cleanser Products. (Pl.’s Mot., at 29.) These five landing pages were used by at least 10 direct infringers. Id. The 30
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Sign up to vote on this titleUsefulNot usefulFacebook Typosquatter Ruling by TechCrunch0.0 (0)EmbedDownloadDescriptionU.S. District Court for Northern California's recommendations for Facebook's recovery of 105 similar domain names, and $2.8m in damagesU.S. District Court for Northern California's recommendations for Facebook's recovery of 105 similar domain names, and $2.8m in damagesInterests: Types, Business/LawRead on Scribd mobile: iPhone, iPad and Android.Copyright: Attribution Non-Commercial (BY-NC)Download as PDF, TXT or read online from ScribdFlag for inappropriate contentShow moreShow less
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