Court Opinion

ID: 2970888
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:24:15.996687+00
Date Added: 2024-06-11T11:43:32.549618
License: Public Domain

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                Pursuant to Sixth Circuit Rule 206                        2      Ford Motor Co. v. Catalanotte               No. 02-1237
        ELECTRONIC CITATION: 2003 FED App. 0310P (6th Cir.)
                    File Name: 03a0310p.06                                ANDERSON, Salt Lake City, Utah, for Appellee.
                                                                          ON BRIEF: Anthony J. DeGidio, Toledo, Ohio, for
                                                                          Appellant. Scott R. Ryther, Gregory D. Phillips, HOWARD,
UNITED STATES COURT OF APPEALS                                            PHILLIPS & ANDERSON, Salt Lake City, Utah, for
                                                                          Appellee.
                  FOR THE SIXTH CIRCUIT
                    _________________                                                          _________________

 FORD MOTOR COMPANY ,             X                                                                OPINION
            Plaintiff-Appellee, -                                                              _________________
                                   -
                                   -  No. 02-1237                           ALGENON L. MARBLEY, District Judge. Defendant-
           v.                      -                                      Appellant, Peter Catalanotte (“Catalanotte”), appeals the
                                    >                                     district court’s decision awarding Plaintiff-Appellee, Ford
                                   ,                                      Motor Company (“Ford”), $5,000 in statutory damages
 PETER CATALANOTTE,                -
         Defendant-Appellant. -                                           pursuant to the Anticybersquatting Consumer Protection Act.
                                                                          This Court has jurisdiction over this appeal pursuant to 28
                                  N                                       U.S.C. § 1291 and 15 U.S.C. § 1121(a). For the following
      Appeal from the United States District Court                        reasons, we AFFIRM the district court’s award of statutory
     for the Eastern District of Michigan at Detroit.                     damages.
    No. 00-75260—Robert H. Cleland, District Judge.
                                                                                                I. BACKGROUND
                     Argued: June 18, 2003
                                                                                             A. Factual Background
             Decided and Filed: August 28, 2003
                                                                            Peter J. Catalanotte registered the Internet domain name
        Before: BOGGS and GILMAN, Circuit Judges;                         FORDWORLD.COM on January 21, 1997. Catalanotte, an
                 MARBLEY, District Judge.*                                employee of Ford since 1978, knew that Ford publishes a
                                                                          newspaper for its employees called Ford World. Catalanotte
                      _________________                                   never operated an Internet website using the domain name
                                                                          FORDWORLD.COM.
                            COUNSEL
                                                                            Ford was unaware that Catalanotte had registered the
ARGUED: Anthony J. DeGidio, Toledo, Ohio, for                             domain name FORDWORLD.COM until October 27, 2000,
Appellant. Scott R. Ryther, HOWARD, PHILLIPS &                            when Catalanotte sent an e-mail message to Mr. Jacques
                                                                          Nasser and Mr. William Clay Ford, officers of Ford.
                                                                          Catalanotte’s e-mail message stated:
    *                                                                           The domain name fordworld.com will be available for
     The Honorable Algenon L. Marbley, United States District Judge for
the Southern District of Ohio, sitting by designation.                        a short period of time. . . . I have been receiving offers

                                  1
No. 02-1237              Ford Motor Co. v. Catalanotte        3    4     Ford Motor Co. v. Catalanotte                No. 02-1237

  from various sources including the competition. I’ve                                  III. DISCUSSION
  indicated to the other interested parties that I’m
  extending this opportunity to you first before any                  In 1999, Congress passed the Anticybersquatting Consumer
  decisions are to be made.                                        Protection Act (“ACPA” or the “Act”), Pub. L. No. 106-113,
                                                                   app. I, §§ 3001–3010, 113 Stat. 1501, 1501A-545–52
In fact, Catalanotte had not received any offers for the domain    (Nov. 29, 1999), as an amendment to the Trademark Act of
name FORDWORLD.COM.                                                1946 (the “Lanham Act”). The ACPA applies to a person
                                                                   who “registers, traffics in, or uses a domain name” that is
  In addition to registering the domain name                       “identical or confusingly similar to” a “distinctive” mark or
FORDWORLD.COM, Catalanotte also registered and sold                that is “identical or confusingly similar to or dilutive of” a
the domain names AANDE.COM and MRSPAULS.COM.                       “famous” mark. ACPA § 3002 (codified at 15 U.S.C.
Catalanotte never operated a website using either of these         § 1125(d)(1)(A) (2000)). Liability under the ACPA requires
domain names.      Catalanotte sold the domain name                a “bad faith intent to profit,” and the ACPA provides a list of
AANDE.COM to the Arts & Entertainment Network, which               factors that courts may consider in determining whether a
owns the trademark A&E, and he sold the domain name                person acts in bad faith. ACPA § 3002 (codified at 15 U.S.C.
MRSPAULS.COM to Mrs. Paul’s Kitchens, Inc., which owns             § 1125(d)(1)(A)–(B)).
the trademark MRS. PAUL’S.
                                                                     The ACPA provides for injunctive relief, ACPA
                   B. Procedural History                           § 3003(a)(1) (codified at 15 U.S.C. § 1116(a)), and recovery
                                                                   of actual damages, ACPA § 3003(a)(2) (codified at 15 U.S.C.
   Ford filed its Complaint in this case on November 30,           § 1117(a)). Furthermore, the ACPA permits a plaintiff to
2000, in the United States District Court for the Eastern          seek, subject to court approval, between $1,000 and $100,000
District of Michigan. Ford’s Complaint alleges cyberpiracy,        in statutory damages per domain name in lieu of actual
trademark dilution, trademark infringement, and false              damages. ACPA § 3003(b) (codified at 15 U.S.C. § 1117(d)).
designation of origin. Ultimately, the district court issued its   The ACPA applies to “all domain names registered before,
Findings of Fact and Conclusions of Law on January 10,             on, or after the date of the enactment” of the ACPA, but
2002, finding Catalanotte liable under the Anticybersquatting      actual and statutory damages are not “available with respect
Consumer Protection Act of 1999. The district court granted        to the registration, trafficking, or use of a domain name that
Ford injunctive relief and $5,000 in statutory damages.            [occurred] before the date of the enactment.” ACPA § 3010
                                                                   (codified at 15 U.S.C. § 1117 note).
              II. STANDARD OF REVIEW
                                                                     In this case, the district court granted Ford injunctive relief
   In reviewing the district court’s award of statutory            and $5,000 in statutory damages because Catalanotte “‘used’
damages, we will not disturb the district court’s findings of      and ‘trafficked in’ the domain name FORDWORLD.COM
fact unless they are clearly erroneous, but we review any          within the meaning of 15 U.S.C. § 1125(d) by offering to sell
issues of law de novo. Allard Enters., Inc. v. Advanced            the domain name to Ford Motor Company.”
Programming Res., Inc., 146 F.3d 350, 355 (6th Cir. 1998);
Champions Golf Club, Inc. v. Champions Golf Club, Inc., 78
F.3d 1111, 1116 (6th Cir. 1996).
No. 02-1237              Ford Motor Co. v. Catalanotte         5    6    Ford Motor Co. v. Catalanotte                No. 02-1237

              A. Pre-Enactment Registration                         domain names registered before, on, or after the date of the
                                                                    enactment” of the ACPA. Id. Registration, trafficking, and
   Catalanotte first argues that he cannot be required to pay       use of a domain name are separate acts upon which liability
statutory damages for the registration, trafficking in, or use of   may be based. Although damages may not be awarded for
the domain name FORDWORLD.COM because he registered                 pre-enactment registration, trafficking, or use, the fact that a
the domain name before enactment of the ACPA. Ford                  domain name was registered before the Act’s passage does
contends that although Catalanotte is not liable for damages        not absolve the registrant from liability for post-enactment
for the registration of the domain name, he can be held             trafficking or use. In this case, the district court did not
accountable in damages for trafficking in the domain name           award Ford any damages for Catalanotte’s registration of the
because he offered to sell the domain name on October 27,           domain name FORDWORLD.COM. Instead, the district
2000, after enactment of the ACPA.                                  court awarded damages only for Catalanotte’s trafficking in
                                                                    and use of the domain name after passage of the Act, when
  The ACPA contains the following “Effective Date”                  Catalanotte offered to sell the domain name to Ford.
provision:
                                                                       Catalanotte cites several cases addressing the ACPA, but
     Sections 3002(a), 3003, 3004, 3005, and 3008 of this           they fail to support his position that the ACPA precludes
  title shall apply to all domain names registered before,          liability based on domain names that were registered prior to
  on, or after the date of the enactment of this Act, except        enactment of the ACPA. In People for the Ethical Treatment
  that damages under subsection (a) or (d) of section 35 of         of Animals v. Doughney, 263 F.3d 359, 362 (4th Cir. 2001),
  the Trademark Act of 1946 (15 U.S.C. 1117) [actual and            the defendant registered the domain name PETA.ORG in
  statutory damages], as amended by section 3003 of this            1995 to host a website for “People Eating Tasty Animals,” a
  title, shall not be available with respect to the                 parody of the plaintiff’s organization. The defendant used the
  registration, trafficking, or use of a domain name that           domain name for six months in 1995 and 1996 before moving
  occurs before the date of the enactment of this Act.              the website to a different domain name. Id. at 363. The
                                                                    plaintiff in Doughney sued seeking only injunctive relief. Id.
ACPA § 3010 (codified at 15 U.S.C. § 1117 note).                    Therefore, the court did not have an opportunity to consider
Catalanotte argues that section 3010 precludes statutory            whether an award of damages was appropriate, although the
damages where registration, trafficking, or use of a domain         court found that the ACPA applies retroactively to all domain
name has occurred before enactment of the ACPA. Thus, he            names registered before enactment of the ACPA. Id. at 368.
claims that statutory damages cannot be awarded against him         The court quoted the ACPA’s prohibition against damages for
because he registered the domain name FORDWORLD.COM                 conduct before the Act’s enactment and noted that damages
before enactment of the ACPA, even though the district court        could not be awarded because the defendant’s registration and
found that he trafficked in the domain name after enactment         use of PETA.ORG all occurred before enactment of the
of the ACPA.                                                        ACPA. Id.
  Catalanotte’s construction of the Effective Date provision          Catalanotte also relies on Sporty’s Farm L.L.C. v.
of the ACPA is contrary to the plain language of the                Sportsman’s Market, Inc., 202 F.3d 489, 500 (2d Cir. 2000),
provision. In fact, the first portion of the Effective Date         where the court found that damages under the ACPA were
provision makes clear that the ACPA “shall apply to all             unavailable because the domain name at issue “was registered
No. 02-1237              Ford Motor Co. v. Catalanotte        7    8      Ford Motor Co. v. Catalanotte               No. 02-1237

and used . . . prior to the passage of the new law.” What          domain name after the ACPA’s date of enactment,
Catalanotte fails to note, however, is that the infringing party   November 29, 1999, can be liable for monetary damages
in Sporty’s did not use the domain name after enactment of         . . . .”).
the ACPA; therefore, the court had no reason to consider
whether the infringer could be liable for damages for conduct        We reject, therefore, Catalanotte’s argument that the ACPA
after the ACPA’s enactment. In Sporty’s, a competitor of           precludes an award of damages based on trafficking in a
Sportsman’s Market, Inc. registered the domain name                domain name that was registered before enactment of the
SPORTYS.COM in 1995. Id. at 494. In 1996, the competitor           ACPA, but that was trafficked in after the Act’s enactment.
sold the domain name to a newly formed subsidiary, Sporty’s        According to the plain language of the Act, liability may be
Farm, which grows and sells Christmas trees. Id. Sporty’s          based on trafficking that occurred after the Act’s enactment,
Farm soon began using the domain name for a website                regardless of when the domain name was registered.
advertising its Christmas trees. Id. Although the ACPA was
not enacted until the Sporty’s case was on appeal, the district        B. Catalanotte’s Use or Trafficking in Domain Name
court had issued an injunction pursuant to the Federal                              After November 29, 1999
Trademark Dilution Act, prohibiting Sporty’s Farm from
using the domain name SPORTYS.COM. Id. Thus, Sporty’s                Catalanotte argues that he did not register, traffic in, or use
Farm never used or trafficked in the domain name after             the domain name FORDWORLD.COM after November 29,
enactment of the ACPA. Unlike in Doughney and Sporty’s,            1999, the date of the ACPA’s enactment. First, Catalanotte
the district court in this case found that Catalanotte used and    registered the domain name on January 21, 1997, before the
trafficked in the domain name FORDWORLD.COM after                  Act’s enactment. Therefore, the district court did not base its
enactment of the ACPA when he offered to sell the domain           award of damages on Catalanotte’s registration of the domain
name to Ford in October 2000.                                      name.

   In several other cases, courts have found that damages are        Second, Catalanotte argues that he did not traffic in the
available pursuant to the ACPA for post-enactment use or           domain name FORDWORLD.COM because he intended to
trafficking, although the domain name at issue was registered      give the domain name to Ford as a gift. Catalanotte argues
before the ACPA’s enactment. See E. & J. Gallo Winery v.           that a transfer must be “for consideration” for it to be
Spider Webs Ltd., 286 F.3d 270, 277 (5th Cir. 2002)                actionable as “trafficking” under the ACPA. 15 U.S.C.
(“[A]lthough [the defendants] registered the domain name           § 1125(d)(1)(E). But Catalanotte’s contention that he
before the effective date of the ACPA, because they used the       intended to give Ford the domain name as a gift is
domain name after this date, they can be held liable for           contradictory to the district court’s finding of fact that
statutory damages for this use.”); Shields v. Zuccarini, 254       Catalanotte offered the domain name to Ford for sale. The
F.3d 476, 486–87 (3d Cir. 2001) (deciding that although the        district court found as follows:
defendant had registered the domain names at issue before
enactment of the ACPA, his “continued use of the domain                  The substance of the email sent by [Catalanotte] to the
names after November 29, 1999 subjects him to the statute’s            executives of Ford clearly indicated, without attaching a
proscriptions and remedies”); Virtual Works, Inc. v.                   price tag, that the domain name was for sale, as it
Volkswagen of Am., Inc., 238 F.3d 264, 268 (4th Cir. 2001)             juxtaposed the assertion that the domain name would be
(“A person who unlawfully registers, traffics in, or uses a            “available for a limited time,” with the assertion that
No. 02-1237               Ford Motor Co. v. Catalanotte           9    10   Ford Motor Co. v. Catalanotte               No. 02-1237

  [Catalanotte] had already received “offers” from “various            domain name FORDWORLD.COM for purposes of the
  sources including the competition.”                                  ACPA when he offered to sell the domain name to Ford.
This finding was not clearly erroneous. Furthermore,                      Finally, Catalanotte contends that he did not use the domain
Catalanotte states that he does not contest the district court’s       name FORDWORLD.COM after November 29, 1999, as the
findings of fact. Therefore, we reject Catalanotte’s argument          district court found that he never operated a website with the
that his offer to Ford was an offer to give Ford the domain            domain name. The district court, however, determined that
name FORDWORLD.COM as a gift.                                          Catalanotte both used and trafficked in the domain name
                                                                       FORDWORLD.COM when he offered to sell the name to
   At oral argument, counsel for Catalanotte argued that               Ford on October 27, 2001. Catalanotte argues that Congress
Catalanotte did not traffic in the domain name                         must have meant something different by the terms “traffics
FORDWORLD.COM when he offered it for sale to Ford.                     in” and “uses” in the ACPA, 15 U.S.C. § 1125(d)(1)(A)(ii),
The ACPA defines the term “traffics in” as referring to                because had Congress meant the term “uses” to include
“transactions that include, but are not limited to, sales,             “traffics in,” it would not have included both terms in the
purchases, loans, pledges, licenses, exchanges of currency,            statute. Ford responds that Catalanotte’s warehousing of the
and any other transfer for consideration or receipt in exchange        domain name and subsequent offer to sell the name
for consideration.” § 1125(d)(1)(E). Catalanotte argues that           constitutes use under the Act. We need not decide on this
although the definition of “traffics in” is broad, the definition      appeal whether “uses” includes “traffics in” under the ACPA
requires a “transaction” such as a sale or purchase, not a mere        because the district court based its award of statutory damages
offer for sale or purchase. He contends that such an offer is          solely on Catalanotte’s offer to sell the domain name
not a “transaction.”                                                   FORDWORLD.COM to Ford. Whether that offer is
                                                                       characterized merely as trafficking in the domain name or
  We conclude that, when Catalanotte registered the domain             both “trafficking in” and “using” the domain name is of no
name FORDWORLD.COM and later offered it for sale to                    consequence to the district court’s award of statutory
Ford, he trafficked in the domain name for the purposes of the         damages. Because we conclude that Catalanotte trafficked in
ACPA. Registering a famous trademark as a domain name                  the domain name FORDWORLD.COM when he offered to
and then offering it for sale to the trademark owner is exactly        sell it to Ford, we need not consider the meaning of the term
the wrong Congress intended to remedy when it passed the               “uses” in 15 U.S.C. § 1125(d)(1)(A)(ii) on this appeal.
ACPA. In fact, the ACPA includes offers for sale as an
example of the kind of conduct that courts may consider in                              C. Statute of Limitations
determining whether a domain name registrant acts in bad
faith. § 1125(d)(1)(B)(i)(VI) (“In determining whether a                 Catalanotte argues that the district court should have
person has a bad faith intent . . . , a court may consider . . . the   dismissed Ford’s entire ACPA claim because it was barred by
person’s offer to transfer, sell, or otherwise assign the domain       the statute of limitations. He claims that although the
name to the mark owner . . . .”); see also Virtual Works, 238          Lanham Act lacks an express statute of limitations, courts
F.3d at 270 (finding that an offer to sell the domain name             generally apply an analogous state statute of limitations to
VW.NET to Volkswagen for a profit evidenced bad faith).                federal actions. In that vein, Catalanotte urges that a three-
Accordingly, we conclude that Catalanotte trafficked in the            year statute of limitations applies for Lanham Act claims
                                                                       brought in Michigan. Ford responds that the equitable
No. 02-1237              Ford Motor Co. v. Catalanotte         11    12    Ford Motor Co. v. Catalanotte                No. 02-1237

doctrine of laches governs Lanham Act claims, not the                   Catalanotte notes that there is a “presumption of laches”
Michigan statute of limitations, and therefore, because Ford         that holds that “an action is barred if not brought within the
filed suit just over a month after learning of Catalanotte’s         period of the [analogous state] statute of limitations and is
registration of FORDWORLD.COM, laches does not bar its               alive if brought within the period.” Tandy Corp., 769 F.2d at
ACPA action.                                                         365. The analogous state statute of limitations in this case is
                                                                     three years. Herman Miller, Inc. v. Palazzetti Imports &
   Catalanotte registered the domain name                            Exports, Inc., 270 F.3d 298, 321 (6th Cir. 2001). But
FORDWORLD.COM on January 21, 1997 and offered it for                 Catalanotte otherwise fails to address the elements of laches,
sale to Ford on October 27, 2000. Ford filed its Complaint in        which are of crucial importance in this case. To invoke the
this case on November 30, 2000. Catalanotte argues that the          equitable doctrine of laches, a party must show: “(1) lack of
statute of limitations bars Ford’s ACPA claim because Ford           diligence by the party against whom the defense is asserted,
filed suit more than three years after Catalanotte registered the    and (2) prejudice to the party asserting it.” Id. at 320.
domain name FORDWORLD.COM.
                                                                        With respect to the first requirement, a party’s notice or
   Catalanotte’s argument is an attempt to apply a statute of        lack of notice that its rights are being infringed is particularly
limitations that is inapplicable to Lanham Act claims.               relevant to determining whether that party lacked diligence in
Although the Supreme Court has adopted analogous state               protecting its rights. See id. at 321. In this case, Ford first
statutes of limitations in the context of certain federal actions,   learned of Catalanotte’s registration of FORDWORLD.COM
see, e.g., Reed v. United Transp. Union, 488 U.S. 319, 334           on October 27, 2000, when Catalanotte offered to sell the
(1989) (noting the “well established rule that statutes of           domain name to Ford. Therefore, Ford did not lack diligence
limitations for federal causes of action not supplied with their     in asserting its rights because it filed a lawsuit against
own limitations period will be borrowed from state law” and          Catalanotte on November 30, 2000. Furthermore, with
applying that rule to claim brought pursuant to the Labor-           respect to the second element of laches, the district court
Management Reporting and Disclosure Act of 1959); Wilson             found that Catalanotte “did not reasonably rely to his
v. Garcia, 471 U.S. 261, 266–67, 280 (1985) (applying                detriment upon any knowing inaction on the part of [Ford] in
analogous state statute of limitations to 42 U.S.C. § 1983           registering, using, or trafficking in the domain name
claim), courts have not treated Lanham Act cases in the same         FORDWORLD.COM.” For this reason, Catalanotte cannot
manner. Instead, the “Lanham Act does not contain a statute          show that he was prejudiced by Ford’s failure to assert its
of limitations. In determining when a plaintiff’s suit should        rights before November 30, 2000.
be barred under the Act, courts have consistently used
principles of laches as developed by courts of equity.” Tandy          Accordingly, we conclude that Ford’s ACPA claim is not
Corp. v. Malone & Hyde, Inc., 769 F.2d 362, 365 (6th Cir.            barred by the equitable doctrine of laches because Ford did
1985). Unlike statutes of limitations, “laches is not . . . a        not lack diligence in asserting its rights and because
mere matter of time; but principally a question of the inequity      Catalanotte was not prejudiced by the timing of Ford’s
of permitting the claim to be enforced.” Holmberg v.                 lawsuit.
Armbrecht, 327 U.S. 392, 396 (1946). Laches, rather than a
state statute of limitations, governs claims brought to enforce
an “equitable right created by Congress.” Id. at 395.
No. 02-1237            Ford Motor Co. v. Catalanotte    13

                  IV. CONCLUSION
  For the foregoing reasons, we AFFIRM the district court’s
award of $5,000 in statutory damages to Ford.