Court Opinion

ID: 2644632
Source: CourtListenerOpinion
Date Created: 2013-12-03 17:36:19.751256+00
Date Added: 2024-06-11T09:02:16.013288
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                ______________

                                     No. 13-1354
                                   ______________

                             DAVID JOHN CARNIVALE

                                           v.

              STAUB DESIGN LLC; JOHN STAUB; & DAVID STAUB

                                               Appellants
                                   _______________

                      Appeal from the United States District Court
                              for the District of Delaware
                                 (Civ. No. 08-764-SLR)
                      District Judge: Honorable Sue L. Robinson
                                    ______________

                      Submitted Under Third Circuit LAR 34.1(a)
                                  October 31, 2013

        Before: McKEE, Chief Judge, FISHER and SLOVITER, Circuit Judges

                          (Opinion Filed: December 3, 2013)

                                   ______________

                                      OPINION
                                   ______________

MCKEE, Chief Judge

      Staub Design, LLC, John Staub, and David Staub (collectively, “Staub Design” or

“Appellants”) appeal a judgment in favor of David John Carnivale for violation of the
Anticybersquatting Consumer Protection Act (“ACPA”), Pub. L. No. 106-113, § 3002,

113 Stat. 1501 (1999) (codified at § 43(d) of the Lanham Act, 15 U.S.C. § 1125(d)

(2012)). For the reasons set forth below, we will affirm the District Court’s judgment.1

                                              I.

       Because we write primarily for the parties who are familiar with this case, we need

not recite the procedural or factual background.

       “We exercise plenary review over the District Court's legal conclusions regarding

the Lanham Act,” but review its factual findings for clear error. Sabinsa Corp. v.

Creative Compounds, LLC, 609 F.3d 175, 182 (3d Cir. 2010). “Clear error exists when,

giving all deference to the opportunity of the trial judge to evaluate the credibility of

witnesses and to weigh the evidence, we are left with a definite and firm conviction that a

mistake has been committed.” Id.

                                              A.

       To prevail on his ACPA claim, Carnivale must prove that 1) “The Affordable

House,” “is a distinctive or famous mark entitled to protection,” 2) Staub Design’s

domain name is “identical or confusingly similar to” his mark, and 3) Staub Design

“registered the domain name[] with the bad faith intent to profit from [it].” Shields v.

Zuccarini, 254 F.3d 476, 482 (3d Cir. 2001); see 15 U.S.C. § 1125(d)(1)(A). We are only

1
 The District Court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338, and this
Court has jurisdiction pursuant to 28 U.S.C. §§ 41 and 1291.
                                              2
concerned with the third element: Staub Design’s bad faith intent to profit from

Carnivale’s mark. See 15 U.S.C. § 1125(d)(1)(A)(i).2

       The ACPA sets forth nine factors that a court should consider in determining the

existence of bad faith. 15 U.S.C. § 1125(d)(1)(B)(i)(I)–(IX). As has been pointed out at

various stages of this litigation, the factors should be applied in a holistic manner and

“not [as a] mechanical[] exercise.” Green v. Fornario, 486 F.3d 100, 106 (3d Cir. 2007).

Moreover, the ACPA expressly allows courts to “consider any other elements of bad

faith” not enumerated in the statute. Advance Magazine Publishers Inc. v. Vogue Int'l,

123 F. Supp. 2d 790, 799 (D.N.J. 2000); see 15 U.S.C. § 1125(d)(1)(B)(i) (using

permissive language).

       On remand, we instructed the District Court to reevaluate factor five, the “intent to

divert consumers,” and factor nine, “the extent to which the mark . . . is or is not

distinctive and famous.” Carnivale, 456 F. App'x at 107. We now review the results of

that balancing process.

2
  In this second appeal, Staub Design also challenges the District Court’s determination
on the first element, whether Carnivale’s mark is “distinctive.” Appellants’ Br. 4-21.
Our opinion on the first appeal explicitly stated that “[w]e do not here disturb the District
Court’s ruling [on summary judgment] that Carnivale’s mark is distinctive . . . .”
Carnivale v. Staub Design, LLC, 456 F. App'x 104, 108 n.3 (3d Cir. 2012). Consequently,
this challenge is foreclosed under “law-of-the-case doctrine” which “bars our
reconsideration of issues previously resolved by an earlier panel.” Atl. Coast Demolition
& Recycling, Inc. v. Bd. of Chosen Freeholders of Atl. Cnty., 112 F.3d 652, 663 (3d Cir.
1997). When this Court affirms in part and reverses in part, the issues that we necessarily
dispose of in the affirmance become “law-of-the-case” despite our remand for additional
proceedings on separate issues. Todd & Co., Inc. v. S.E.C., 637 F.2d 154, 156-57 (3d Cir.
1980); see also Cowgill v. Raymark Indus., Inc., 832 F.2d 798, 802 (3d Cir. 1987). Staub
Design does not assert any of the exceptions to the doctrine. See Pub. Interest Research
Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116-17 (3d Cir. 1997).
                                              3
                                                    B.

          As to factor five,3 although we agreed with the District Court that because “intent

is rarely discernible directly, it must typically be inferred from pertinent facts and

circumstances,” Audi AG v. D'Amato, 469 F.3d 534, 549 (6th Cir. 2006) (quoting Int'l

Bancorp, L.L.C. v. Societe Des Baines De Mer Et Du Cercle Des Etrangers A Monaco,

192 F. Supp. 2d 467, 486 (E.D. Va. 2002)) (internal quotation marks omitted), we

nevertheless directed the District Court to consider whether the record supported an

inference that the Appellants intended to divert consumers. Carnivale, 456 F. App’x at

107.

          In doing so, the District Court highlighted testimony in which John Staub admitted

to viewing Carnivale’s website, www.affordablehouse.com. That website was replete

with home building-related content, and the District Court pointed to evidence that

Appellants registered their domain name, www.theaffordablehouse.com, a short time after

John Staub viewed Carnival’s website. Carnivale v. Staub Design, LLC, Civ. No. 08–

764–SLR, 2012 WL 6814251, at *2-3 (D. Del. Jan. 7, 2012). Moreover, the District

Court refused to credit John Staub’s claim that his website was intended to serve a purely

3
    In full, factor five reads:

          (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 represented by the mark, either for commercial gain or with the
          intent to tarnish or disparage the mark, by creating a likelihood of
          confusion as to the source, sponsorship, affiliation, or endorsement of the
          site;

15 U.S.C. § 1125(d)(1)(B)(i)(V).
                                                4
educational function. Rather, the court ruled to the contrary based on evidence that

supported a finding of a profit motive. Id. at *3. From that evidence, the District Court

inferred that Staub Design sought to ride the coattails of Carnivale’s long-established

website—an indicator of bad faith. Id.

         On this record, we are not left with a “definite and firm conviction” that Staub

Design’s intent was unrelated to consumer diversion. This is especially true when we

consider that Staub Design’s domain name is the entirety of Carnivale’s mark, “The

Affordable House.” See Int'l Bancorp, 192 F. Supp. 2d at 486.

         As to factor nine,4 we directed the District Court to assess the extent to which the

mark is distinctiveness. Carnivale, 456 F. App’x at 108. See § 1125(d)(1)(B)(i)(IX); see

also Shields, 254 F.3d at 482.5 Secondary meaning is also relevant to this inquiry. See

E.T. Browne Drug Co. v. Cococare Products, Inc., 538 F.3d 185, 199 (3d Cir. 2008). On

remand, the District Court considered these factors and again concluded that “the ninth

factor slightly supports a finding of bad faith.” Carnivale, 2012 WL 6814251, at *4.

         Although the District Court’s analysis of factor nine on remand is not without

some shortcomings, we cannot conclude that its findings were clearly erroneous. Further,

while the “unique circumstances” cited by the District Court are not exceedingly

4
    In full, factor nine reads:

         (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) of this section.

15 U.S.C. § 1125(d)(1)(B)(i)(IX).
5
  The factors as listed in Shields were re-written as part of the Trademark Dilution
Revision Act, Pub. L. No. 109-312, § 2, 120 Stat. 1730 (2006).
                                               5
indicative of bad faith, we find no clear error with their inclusion in the holistic approach.

Moreover, when we accord the proper amount of deference to the District Court’s

balancing of both statutory and non-statutory factors, we are not left with a “definite and

firm conviction that a mistake has been committed.” Sabinsa Corp., 609 F.3d at 182.

                                             II.

Accordingly, we will affirm the judgment of the District Court.

                                              6