DALE S. FISCHER, District Judge.
Debra Plato Deputy Clerk
On April 14, 2010, the Court granted Plaintiffs ex parte application requesting a Temporary Restraining Order ("TRO") enjoining Defendant Concrete Solutions, Inc. from transferring or selling the domain name <supercrete.com> to any third party pending resolution of the claim filed against Defendants for cyberpiracy under 15 U.S.C. § 1125(d). Subsequently, the parties briefed Plaintiffs further request for a preliminary injunction, appearing before the court on April 22, 2010 for oral argument on the matter. For the reasons noted below, the Court GRANTS Plaintiffs request for a preliminary injunction enjoining Defendant Concrete Solutions, Inc. from transferring or selling the domain name <supercrete.com> to any third party pending resolution of the claims raised in this action.
Plaintiff Super-Krete International, Inc. is a California corporation specializing in the sale of products for the repair and restoration of existing concrete. (Holwitz Dec. ¶ 3.) Plaintiff owns federal trademark registrations for the marks "Super-Crete," "Super-Krete," and "Super-Krete Products" ("the Marks") for use in connection with the sale and marketing of its products. (Id. at ¶ 4.) Plaintiffs Marks were filed with the U.S. Patent and Trademark Office ("USPTO") on September 24, 1999 and subsequently registered under U.S. Registration Nos. 2,375,309, 2,377,606, and 2,589,070. (Id. at ¶ 4; Ex. A).
The declaration of Plaintiff's president, Tracey Holwitz, states that the company has "continuously exploited" the "Super-Crete" mark since its acquisition in 1995, and that the company actively promotes its products under the Marks. (Id. at ¶¶ 5-8.) Specifically, Holwitz declares that the company uses the Marks in connection with online promotion of its products by owning and operating the website domains <supercrete.com>, < super-krete.com >, <super-crete.ca>, and <super-krete.ca>. (Id. at ¶ 8.)
Defendant Concrete Solutions, Inc. competes against Plaintiff in the concrete resurfacing, restoration, and sealant market. (See Sadleir Decl. ¶ 3). Defendants' operations are located less than seventeen miles from Plaintiff's location. (Holwitz Decl. ¶ 9.) Plaintiff contends that Rod Sadleir, President of Concrete Solutions and also a defendant in this action, developed a limited business relationship with Plaintiff's founder in the early 1980's and subsequently monitored Plaintiff's business activities. (Id. at ¶ 9.)
On March 17, 1999, Sadleir registered the domain name <supercrete.com> and directed all traffic from this site to the website for Concrete Solutions at <concretesolutions.com>, which offers products in direct competition with Plaintiff. (Sadleir Decl. ¶ 5; Holwitz Decl. ¶ 10.) Sadleir declares, however, that Concrete Solutions has never used the terms "supercrete" or "super-crete" on its website. (Sadleir Decl. ¶ 6.) Sadleir states that at the time of registering <supercrete.com>, he was "unaware of any trademarks allegedly owned by Plaintiff." (Id. at ¶ 7.) Five months after registering the site, Sadleir received an e-mail from Tracey Holwitz indicating Holwitz was aware of the potentially infringing website. (Id. at ¶ 7.)
Sadleir heard nothing further from Plaintiff regarding the website until 2007. (Id. at ¶ 8.) On September 23, 2007, Sadleir offered to sell the <supercrete.com> domain name to Plaintiff for $15,000. (Holwitz Decl. ¶ 11.) Plaintiff filed an arbitration action in September 2008 with the World Intellectual Property Organization ("WIPO"), seeking transfer of the <supercrete.com> domain. (Sadleir Decl. ¶ 9.)
On March 18, 2010, Plaintiff filed this action alleging, inter alia, trademark infringement and dilution under 15 U.S.C. §§ 1114, 1125 and cyberpiracy under 15 U.S.C. § 1125(d). Following the filing of the suit; Defense counsel notified Plaintiff that Defendants were considering selling the domain name <supercrete.com> to a third party—possibly from abroad. (Rome Decl. ¶ 5; Bjorgum Decl. ¶ 3.) Defense counsel would not agree to the requested stipulation that Defendants would not sell the domain name until after Plaintiffs claims had been adjudicated here. (Rome Decl. ¶ 6; Bjorgum Decl. ¶ 3.) Defense counsel contends these discussions were made as part of an attempt to settle the case. (Bjorgum Decl. ¶ 4.)
A district court should enter a preliminary injunction only "upon a clear showing that the plaintiff is entitled to such relief." Winter v. Natural Resources Defense Council, Inc., ___ U.S. ___, 129 S.Ct. 365, 375, 172 L.Ed.2d 249 (2008). Such a showing requires that plaintiff establish it "is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the public interest." Id. at 374.
Under the Anticybersquatting Consumer Protection Act ("ACPA"), Congress provided civil remedies for trademark holders seeking relief against parties infringing upon their marks in connection with website domain names. 15 U.S.C. § 1125(d); see Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 680 (9th Cir.2005) ("[C]ybersquatting occurs when a person other than the trademark holder registers the domain name of a well known trademark and then attempts to profit from this by either ransoming the domain name back to the trademark holder or by using the domain name to divert business from the trademark holder to the domain name holder."). As part of its cyberpiracy claim under § 1125(d), Plaintiff seeks the specific injunctive relief of a transfer of the <supercrete.com> domain name from Defendants to Super-Krete, Inc.
To support a claim for cybersquatting under § 1125(d), a plaintiff must prove that the defendant:
15 U.S.C. § 1125(d)(1)(A); see also Bosley Medical Institute, 403 F.3d at 681 ("[A] `trademark owner asserting a claim under the ACPA must establish the following: (1) it has a valid trademark entitled to protection; (2) its mark is distinctive or famous; (3) the defendant's domain name is identical or confusingly similar to, or in the case of famous marks, dilutive of, the owner's mark; and (4) the defendant used, registered, or trafficked in the domain name (5) with a bad faith intent to profit.'" (quoting DaimlerChrysler v. The Net Inc., 388 F.3d 201, 204 (6th Cir.2004))).
Plaintiff has adduced evidence of ownership of registered trademarks for the terms "Super-Crete," "Super-Krete," and "Super-Krete Products" in connection with the sale of products for the repair and restoration of existing concrete. (Holwitz Decl. ¶ 4; Ex. A). "Super-Crete"—the mark most similar to the domain name at issue—was first registered as a trademark in 1975, twenty years before Sadleir registered the disputed domain name. While Defendants make the general argument that the "Super-Crete" mark is descriptive and not distinctive, the mark's registration with the USPTO is sufficient evidence to establish its distinctiveness and validity. Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1199 (9th Cir.2009) ("[F]ederal trademark registration of a particular mark supports the distinctiveness of that mark, because the PTO should not otherwise give it protection. Registration alone may be sufficient in an appropriate case to satisfy a determination of distinctiveness."); see 15 U.S.C. § 1115(a) (stating that PTO registration is "prima facie evidence of the validity of the registered mark"). Accordingly, the Court finds that Plaintiff will likely be able to establish that its Marks are valid and enforceable under the ACPA.
In determining whether there is confusing similarity under the ACPA, courts compare the plaintiffs mark with the name of the website. See Coca-Cola Co. v. Purdy, 382 F.3d 774, 784 (8th Cir. 2004) (holding that there was a likelihood of confusion under the ACPA where defendant had registered websites including www.my-washingtonpost.com, www. mymcdonalds.com and www.drinkcoke. org); Louis Vuitton Malletier & Oakley, Inc. v. Veit, 211 F.Supp.2d 567 (E.D.Pa. 2002) (holding that plaintiff owning Louis Vuitton mark was entitled to default judgment on ACPA claim based on defendant's use of domain name www.LouisVuittonreplicas.com); Graduate Mgmt. Admission Council v. Raju, 267 F.Supp.2d 505 (E.D.Va.2003) (holding that plaintiff owning GMAT mark was entitled to default judgment on claim under the ACPA where defendant used domain names www. GMATPLUS.com and www.GMATPLUS. net and was selling past test questions from the Graduate Management Admission Test (GMAT)).
A court should not look beyond the domain name to consider the content of the website. Purdy, 382 F.3d at 783. "The inquiry under the ACPA is thus narrower than the traditional multifactor likelihood of confusion test for trademark infringement." Id. Consequently, even if it might be evident from the content of the website that it is not sponsored by or
Defendants registered the domain name <supercrete.com> in 1999 and have since used the domain to reroute web viewers to Concrete Solutions' primary website. The only difference between Plaintiffs registered mark of "Super-Crete" and Defendants' domain name of <supercrete.com> is the removal of the hyphen. Based on the case law, this minor variation makes Defendants' domain name confusingly similar to Plaintiffs mark. While Defendants argue that the hyphen is significant in modifying the term, this argument is contrary to the case law—and common sense. See Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 382 (7th Cir.1976) ("[S]mall changes in words, such as adding or deleting a hyphen, are insufficient to distinguish marks."); Stix Products, Inc. v. United Merchants & Mfrs., Inc., 295 F.Supp. 479, 486 (S.D.N.Y.1968) ("The absence of a hyphen ... is of no significance, it is `a distinction without a difference.'"); Safeway Stores v. Dunnell, 172 F.2d 649, 655-56 (9th Cir.1949) (finding "Safe-Way" on toilet seat covers was an imitation of "Safeway" for supermarket stores). Further, the likelihood for consumer confusion is exacerbated here by the fact that both parties operate commercial websites marketing products in the same specific market for restoration and repair of existing concrete, and that both parties operate in the same geographic area. Accordingly, the court finds that Plaintiff is likely to be able to show that Defendants registered and use a domain name that is confusingly similar to Plaintiffs registered mark.
To assist courts in the determination of bad faith intent under the statute, Congress enumerated a non-exclusive list of nine factors to be considered:
15 U.S.C. § 1125(d)(1)(B)(i).
On balance, the relevant factors here favor a finding that Defendants acted with bad faith intent to profit from the <supercrete.com> domain name. Using the domain name solely to route potential web customers to Concrete Solutions' website, Defendants make no claim to use of "supercrete" as a mark. Indeed, defendants state that they have never applied the term to any of their products. While Defendants contend that "supercrete" could be used as a purely descriptive term without infringing on a distinctive trademark, this argument has little merit precisely because Defendants admit to never using the term to describe their products. Instead, Defendants employ a domain name that is confusingly similar to a local competitor's mark for the sole purpose of directing web traffic to their commercial website, which offers products in direct competition with Plaintiffs. As such, it appears that Defendants only interest in the domain name is to divert customers who may have been searching for Plaintiffs mark to their own commercial website, as referenced in factor five. Further, Defendants' attempt to sell the domain to Plaintiff in 2007 suggests bad faith intent as referenced in factor six.
In opposition, Defendants argue that their registration of the site on March 17, 1999—six months prior to Plaintiffs filing of the current trademark registrations on September 24, 1999—suggests sufficient prior use of the site under factor three to negate a finding of bad faith intent. (Opposition at 10-12.) In support, Defendants rely largely on the finding of the WIPO panel that Plaintiff had not demonstrated use of the Marks in commerce prior to their trademark registration in September 1999.
Further, Plaintiff has submitted credible evidence suggesting that the "Super-Crete" mark was used in commerce well before Sadleir registered the disputed domain name in 1999. The original registration of the mark was made in 1975 and assigned by written contract to Plaintiff in 1995. Both registrations of the mark indicate that the date of first use in commerce was 1966. Holwitz has also declared that Plaintiff has continuously used the "Super-Crete" mark in connection with its products since 1995. Plaintiff additionally contends that Sadleir was aware of these activities well before registering the domain. Although Sadleir may not have been aware of the trademark registrations involved, it appears likely that he would be aware of a mark used by a local competitor within the relatively narrow market of concrete-surfacing products. The Court finds that the prior use factor weighs in favor of bad faith, rather than against.
Finally, Defendants contend that their use of the <supercrete.com> domain name falls within the safe harbor provision of the statute. The ACPA contains a safe harbor provision, which states: "Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful." 15 U.S.C. § 1125(d)(1)(B)(ii). While not clearly stated, Defendants' reliance on the safe harbor provision appears to be based on the WIPO decision and the potential use of "supercrete" as a descriptive term. As noted, however, WIPO's decision is granted no deference here, and Defendants have expressly stated that they never used the term "supercrete" to describe their products. Further, the Ninth Circuit has found that "courts should `make use of this "reasonable belief'" defense very sparingly and only in the most unusual cases.'" Lahoti, 586 F.3d at 1203 (quoting Audi AG v. D'Amato, 469 F.3d 534, 549 (6th Cir. 2006)). Indeed, the Ninth Circuit went on to state that "`[a] defendant who acts even partially in bad faith in registering a domain name is not, as a matter of law, entitled to benefit from the [ACPA's] safe harbor provision.'" Id. (quoting Virtual Works, Inc. v. Volkswagen of Am., Inc., 238 F.3d 264, 270 (4th Cir.2001)). Even if
In opposition, Defendants argue that Plaintiff waited too long to bring its present claims related to the <supercrete.com> site and that the ACPA claim should be barred under the doctrine of laches. "Laches is an equitable time limitation on a party's right to bring suit, resting on the maxim that `one who seeks the help of a court of equity must not sleep on his rights.'" Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir.2002) (internal quotes and citations omitted). In evaluating a laches claim where an injunction is sought, courts first determine when the statute of limitations period expired for "the most closely analogous action under state law." Id. at 836. "If the plaintiff filed within that period, there is a strong presumption against laches. If the plaintiff filed outside that period, the presumption is reversed." Tillamook Country Smoker, Inc. v. Tillamook County Creamery Ass'n, 465 F.3d 1102, 1108 (9th Cir.2006).
Here, neither party has suggested an analogous state law statute of limitations. As the cybersquatting claim at issue appears most similar to a state trademark infringement claim, the court will rely on the four-year statute of limitations for unspecified claims outlined in California Code of Civil Procedure § 343. See ATM Express, Inc. v. ATM Express, Inc., No. 07cv1293-L(RBB), 2009 WL 2973034, at *3, 2009 U.S. Dist. LEXIS 83756, at *9 (S.D.Cal. Sept. 11, 2009) (applying California's four-year statute of limitations for state trademark infringement claims to ACPA cybersquatting claim in laches analysis); Miller v. Glenn Miller Prods., 318 F.Supp.2d 923, 942 n. 11 (C.D.Cal.2004) (applying state four-year statute of limitations to trademark infringement claim). The time period for a laches defense begins to accrue "when the plaintiff knew or should have known about the potential cause of action." Tillamook, 465 F.3d at 1108. Here, it appears that Plaintiff became aware of Defendants' use of the <supercrete.com> domain in late 1999, just months after it was first registered. Plaintiff waited until at least 2008, when the arbitration claim was filed with WIPO, however, to seek to enforce its claim to the domain site. This was a delay of more than eight years; four years past the analogous statute of limitations period. Accordingly, laches is presumed to apply.
To consider whether Plaintiffs delay in filing suit was unreasonable, and therefore barred, the court must further consider the following six "E-Systems" factors: "(1) the strength and value of the trademark rights asserted; (2) plaintiffs diligence in enforcing the mark; (3) harm to the senior user if relief is denied; (4) good faith ignorance by the junior user; (5) competition between senior and junior users; and (6) extent of harm suffered by the junior user because of the senior user's
For the foregoing reasons, the court finds that Plaintiff is likely to succeed on the merits of its ACPA claim.
Plaintiff contends that it will suffer irreparable injury if Defendants transfer control over the <supercrete.com> domain before it can gain control of the site because it will lose its desired remedy of gaining control of the site.
Even without this presumption, Plaintiff has demonstrated irreparable injury based on the threatened loss of prospective customers who would be diverted away from its website should it be unable to gain control over the domain name. In Stuhlbarg Int'l Sales Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 841 (9th Cir. 2001), the Ninth Circuit found threatened loss of prospective customers and goodwill constitutes irreparable harm in the trademark context. In the instant case, the threat of an ongoing loss of prospective customers if Plaintiff should be prevented from gaining control of the <supercrete.com> domain supports a finding of irreparable harm.
"A preliminary injunction is an extraordinary remedy never awarded as of right." Winter, 129 S.Ct. at 376. "In each case, a court must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief." Amoco Production Co. v. Village of Gambell, Alaska, 480 U.S. 531, 542, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987). The balance of equities here tips sharply toward Plaintiff, who would be forced to file new claims against third parties potentially beyond this Court's jurisdiction if Defendants were to sell the domain before the conclusion of this litigation. Defendants' suggestion that Plaintiff could simply file another WIPO claim if this were to happen is disingenuous in light of the WIPO's prior decision. Further, as Defendants do not suggest that they will lose an impending sale if prevented from marketing the site during the pendency of this action, it is not clear that Defendants will be harmed in any real way by this limited delay in their ability to transfer the site to a third party. Accordingly, the Court finds this factor also weighs in favor of granting the preliminary injunction.
"In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction." Weinberger v. Romero-Barcelo, 456 U.S. 305, 312, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982). "The public interest analysis for the issuance of a preliminary injunction requires [the court] to consider `whether there exists some critical public interest that would be injured by the grant of preliminary relief.'" Independent Living Center of Southern California, Inc. v. Maxwell-Jolly, 572 F.3d 644, 659 (9th Cir. 2009) (quoting Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1458 (Fed. Cir.1988)). Plaintiff suggests that the public interest will benefit by removing a potential future threat of confusion related to the Marks. "The likelihood of confusion to consumers is the critical factor in [the] consideration" of harm to the public, as "[t]he public has an interest in avoiding confusion between two companies' products." Internet Specialties West, Inc., 559 F.3d at 993 n. 5 (9th Cir.2009). In light of the limited scope of the present preliminary
For the foregoing reasons, the Court finds that the relevant factors weigh in favor of granting Plaintiffs application for preliminary injunction. Therefore, Plaintiffs request for a preliminary injunction is GRANTED. Defendants, their affiliates, parents, subsidiaries, officers, agents, representatives, servants, employees, and attorneys and anyone acting on Defendants' behalf, are ENJOINED from selling or transferring the domain name <supercrete.com> until further order of the Court.
IT IS SO ORDERED.