Court Opinion

ID: 1009568
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:58:10.419974+00
Date Added: 2024-06-11T09:51:12.231886
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

CABLE NEWS NETWORK, LP, LLLP,          
               Plaintiff-Appellee,
                 v.
CNNEWS.COM,
               Defendant-Appellant,
MAYA ONLINE BROADBAND NETWORK
(HK) COMPANY, LIMITED,
                                                 No. 02-1112
                       Appellant.
ELECTRONIC FRONTIER FOUNDATION,
      Amicus Supporting Appellant.
AT&T CORPORATION,
     Amicus Supporting Appellee.
                                       
            Appeal from the United States District Court
         for the Eastern District of Virginia, at Alexandria.
                   T. S. Ellis, III, District Judge.
                          (CA-00-2022-A)

                      Argued: October 30, 2002

                      Decided: January 23, 2003

   Before LUTTIG, MICHAEL, and TRAXLER, Circuit Judges.

Vacated in part, affirmed in part, and final order affirmed by unpub-
lished per curiam opinion.
2               CABLE NEWS NETWORK v.     CNNEWS.COM

                             COUNSEL

ARGUED: James Wilson Dabney, PENNIE & EDMONDS, L.L.P.,
New York, New York, for Appellants. David J. Stewart, ALSTON &
BIRD, L.L.P., Atlanta, Georgia, for Appellee. ON BRIEF: Hailing
Zhang, Nanda K. Alapati, PENNIE & EDMONDS, L.L.P., New
York, New York, for Appellants. John D. Haynes, ALSTON &
BIRD, L.L.P., Atlanta, Georgia; Janis Orfe, THE LAW OFFICES OF
JANIS ORFE, P.C., Fairfax, Virginia, for Appellee. Cindy Cohn,
Legal Director, ELECTRONIC FRONTIER FOUNDATION,
San Francisco, California; Eric C. Grimm, CYBERBRIEF, P.L.C.,
Ann Arbor, Michigan, for Amicus Curiae Foundation. Laura A.
Kaster, Frank L. Politano, Michele A. Farber, AT&T CORP., Basking
Ridge, New Jersey; Alan Charles Raul, Frank R. Volpe, Edward R.
McNicholas, Julie M. Zampa, SIDLEY, AUSTIN, BROWN &
WOOD, L.L.P., Washington, D.C., for Amicus Curiae AT&T.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   Cable News Network LP, LLLP (CNN) brought this in rem action
against the domain name cnnews.com under the Anticybersquatting
Consumer Protection Act of 1999 (ACPA), alleging that the use of the
domain name by a Chinese news service provider both infringed on
and diluted the CNN trademark. CNN sought an order transferring
ownership of the domain name from Maya HK, a Chinese company,
to CNN. The district court granted CNN’s motion for summary judg-
ment on the trademark infringement claim. The court then entered an
order transferring the domain name cnnews.com to CNN. We affirm.

                                  I.

   When a company wants the rights to a new domain name, it con-
tacts a registrar. The registrar submits the domain name to a registry,
                CABLE NEWS NETWORK v.     CNNEWS.COM                 3
which enters the assigned domain name into a database. Network
Solutions, Inc. (NSI), a Virginia corporation that was bought out after
the commencement of this action, operated both a registrar and a reg-
istry, with these functions being performed by separate units within
the corporate structure. The registry unit, now known as VeriSign
Global Registry Services (VeriSign GRS), is the sole registry for .com
domain names. Its right to this position stems in part from a contract
with the U.S. Department of Commerce.

   Maya HK, a Chinese company, is a subsidiary of Shanghai Maya,
another Chinese company. In November 1999 Heyu Wang, Maya
HK’s general manager, registered the domain name cnnews.com with
NSI; NSI served as both the registrar and registry in that transaction.
Wang remained the nominal owner of the domain name, which was
licensed to Shanghai Maya, and Maya HK earned royalties from
Shanghai Maya’s use of the name. Maya HK has registered six other
domain names used by Shanghai Maya, including cnmaya.com,
cnnav.com, cnsport.com, and cncities.com.

   Beginning in April 2000 CNN wrote to Wang, demanding that he
transfer the rights to the cnnews.com site to CNN. Wang refused and
appears to have transferred ownership of the domain name to Maya
HK in October or November 2000. Around the same time, Maya HK
had Eastcom, a Chinese company, register the domain name, severing
any link with NSI (or its successor) as a registrar. VeriSign GRS, as
the sole registry for ".com" domain names, remains the company’s
registry.

   The cnnews.com site primarily carries Chinese language news.
Some of these news stories refer to CNN stories. The site contains
some English language content and includes links to English language
sites. Shanghai Maya’s primary shareholder, Tom.com, has expressed
a desire to reach the worldwide Chinese-language community,
although Tom.com seems to regard expansion in mainland China as
a more realistic short-term goal. Moreover, Maya HK and Shanghai
Maya claim that they have no connections to the United States except
their use of NSI’s (now VeriSign GRS’s) registry. Indeed, Shanghai
Maya has said that it does not accept payment from those outside the
mainland.
4                CABLE NEWS NETWORK v.      CNNEWS.COM

   In December 2000 CNN brought an in rem action against the
domain name cnnews.com in the United States District Court for the
Eastern District of Virginia to gain the rights to the domain name.
Jurisdiction was asserted under the in rem provisions of the ACPA,
which is part of the Lanham Act. 15 U.S.C. § 1125(d)(2)(a). At the
behest of counsel for CNN and VeriSign GRS, Eastcom deposited a
registrar certificate with the district court, which gave the court con-
trol over the registration of cnnews.com.

   Maya HK filed a motion to dismiss in April 2001, contesting the
validity of the court’s in rem jurisdiction. The district court denied the
motion. The court explained first that a plaintiff asserting in rem juris-
diction did not have to demonstrate that the defendant had minimum
contacts with the forum. The court held that the statute explicitly
allows in rem suits to be brought where the registry for the domain
name is located. Because the registry for cnnews.com, VeriSign GRS,
is in the Eastern District of Virginia, the court had jurisdiction. Sec-
ond, the court found that CNN did not need to plead and prove bad
faith to satisfy the jurisdictional requirements. Third, it denied Maya
HK’s claim that CNN had failed to join an indispensable party.
Finally, the district court found that CNN had perfected service.

   Following the denial of this initial motion to dismiss, the parties
conducted discovery and both ultimately submitted motions for sum-
mary judgment. In its summary judgment order, the district court first
considered whether CNN had demonstrated the required elements for
a trademark infringement claim. The court required CNN to show (1)
that it possessed a mark; (2) that Maya HK used the mark; (3) that
Maya HK’s use of the mark was "in commerce," which the Lanham
Act defines as a use that is connected to or has an effect on U.S. com-
merce; (4) that Maya HK’s use of the mark was connected with the
sale, distribution, or advertising of goods or services; and (5) that
Maya HK’s use of the mark was likely to confuse consumers. After
determining that only elements (3) and (5) were contested, the court
concluded that CNN had satisfactorily demonstrated that Maya HK’s
use of cnnews.com affected U.S. commerce and was likely to cause
consumer confusion. Moreover, the court rejected Maya HK’s request
that it apply the Supreme Court’s analysis in Steele v. Bulova Watch
Co., 344 U.S. 280, 285-89 (1952), to determine whether extraterrito-
rial application of the Lanham Act was appropriate. The court deter-
                CABLE NEWS NETWORK v.    CNNEWS.COM                 5
mined instead that because the res was located within the United
States, the Act’s application was domestic, not extraterritorial. The
court then decided that CNN was required to establish that Maya HK
had acted with bad faith to prevail on a trademark infringement claim.
Concluding that Maya HK had acted with bad faith, the court granted
summary judgment to CNN on its trademark infringement claim. The
court, however, rejected CNN’s trademark dilution claim because
CNN did not demonstrate actual harm to the mark. Based on these
determinations the district court ordered that the domain name
cnnews.com be transferred to CNN.

                                 II.

   Maya HK appeals, arguing primarily that the district court lacked
jurisdiction because Maya HK did not have sufficient minimum con-
tacts with the forum. Maya HK also appeals (1) the district court’s
determination that Maya HK acted in bad faith, (2) the court’s refusal
to apply the Steele factors to determine whether it should apply the
Lanham Act extraterritorially, (3) the court’s grant of summary judg-
ment to CNN on its trademark infringement claim, and (4) the court’s
order transferring ownership of the domain name cnnews.com to
CNN.

   The district court properly exercised in rem jurisdiction over the
domain name cnnews.com. See Harrods Ltd. v. Sixty Internet Domain
Names, 302 F.3d 214, 225 (4th Cir. 2002). The court decided the mer-
its, including the issue of Maya HK’s bad faith, prior to our holding
that a plaintiff may prevail in an in rem trademark infringement and
dilution action without alleging and proving bad faith. Harrods Ltd.,
302 F.3d at 232. The portions of the district court’s summary judg-
ment opinion dealing with the bad faith issue are therefore vacated.
In light of Harrods Ltd. there is no need for us to address the issue
of whether Maya HK acted in bad faith. This, however, does not alter
the outcome because the district court determined that CNN had
established all of the essential elements of a trademark infringement
claim. As to the issue of trademark infringement and all remaining
issues raised on appeal, we affirm on the reasoning of the district
court. Cable News Network L.P., L.L.L.P. v. cnnews.com, 177 F.
Supp. 2d 506 (E.D. Va. 2001) (opinion granting CNN’s motion for
6               CABLE NEWS NETWORK v.   CNNEWS.COM

summary judgment). The district court’s final order transferring the
domain name cnnews.com to CNN is also affirmed.

                             VACATED IN PART AND AFFIRMED
                             IN PART; FINAL ORDER AFFIRMED