It is never wise to register the trademark of a competitor in a domain name. As Silver Ring found out, registering a competitor’s trademark in a domain name can subject you to the possibility of damages and a permanent injunction under the Anticybersquatting Consumer Protection Act (ACPA).
Plaintiff Silver Ring, a Virginia corporation, and Defendant Digisplint, a Canadian corporation, are competitors in the luxury finger split business. Both manufacture finger splits for arthritic individuals made out of gold and sterling silver. See Silver Ring Splint Co. v. Digisplint, Inc., 2008 WL 2478390 (W.D.Va. June 18, 2008).
Plaintiff Silver Ring claimed that Defendant Digisplint infringed on its catalog’s copyright, while Digisplint counterclaimed that Silver Ring cybersquatted its trademark by registering the digisplint.com domain name. The district court granted summary judgment in favor of Silver Ring’s claim of copyright infringement.
Silver Ring had a registered copyright on its catalog. The district court found that Digisplint copied the bullet point text under some of the items in the catalog and used the text on its website and handbills. Silver Ring registered digisplint.com in July of 1998, before the enactment of the Anticybersquatting Consumer Protection Act. Digisplit received registration of its DIGISPLINT mark with the USPTO in March 2007.
The district court upheld the grant of summary judgment in favor of Silver Ring’s copyright claims, as well as the statutory damages of $30,000. The district court also enjoined Digisplint from further infringing upon Silver Ring’s copyright.
Next, the district court examined Digisplint’s ACPA claims. The court found that the nine factors listed in the ACPA statute for identifying a bad faith intent to profit were not determinative of either side’s case. The court recognized that the nine factors are not the only factors that can be considered in an ACPA suit, and cited the classic ACPA Sporty’s Farm case for that proposition:
The most important grounds for our holding that Sporty's Farm [a wholly owned subsidiary of Omega Engineering, Inc.] acted with a bad faith intent, however, are the unique circumstances of this case, which do not fit neatly into the specific factors enumerated by Congress but may nevertheless be considered under the statute. We know from the record and from the district court's findings that Omega planned to enter into direct competition with Sportsman's [the owner of the “sporty's” mark] in the pilot and aviation consumer market.... It cannot be doubted, as the court found below, that Omega registered sportys.com for the primary purpose of keeping Sportsman's from using that domain name.
Ultimately, the court found that Silver Ring was liable for registering Digisplint’s trademark, but refused to award statutory damages because the website was registered before the ACPA was enacted. Instead, the court permanently enjoined Silver Ring from registering Digisplint’s marks in a domain name.