Just Sue Them! Nike Wins Cybersquatting Suit

Jul 2, 2004

A federal court in Illinois has granted Nike’s motion for summary judgment on its claim that a corporate defendant’s use of its Just Do It! phrase in a web site address (www.justdoit.net) constituted cybersquatting and violated the Anticybersquatting Consumer Protection Act (ACPA).
Central to the court’s finding was that the defendant Circle Group Internet, Inc. used the web address for the primary purpose of redirecting traffic to its own site and that the phrase did not have a history of use with the defendants, prior to its use in the web site address.
Nike was forced to seek relief from the federal courts after it lost an initial argument on June 13, 2002 before the World Intellectual Property Organization Arbitration and Mediation Center (WIPO). After consideration the case, the WIPO majority concluded that CIG did not register the domain name in bad faith, though it did express some concern about the aforementioned redirect function.
Turning to the district court, Nike claimed that not only did CGI violate the ACPA, but that it also:
• infringed upon its trademark in violation of the Lanham Act, 15 U.S.C. § 1114(1), and the common law of various states, including Illinois (Count II);
• engaged in unfair competition under the common law of various states, including Illinois, as well as a violation of the Illinois Deceptive Trade Practices Act, 815 ILCS §§ 510/1 et seq. (Count III); and
• exhibited dilution in violation of the Lanham Act, 15 U.S.C. § 1125(c) (Count IV).
Shortly into discovery, Nike moved for summary judgment on Count I.
The court began its review by noting that Nike has used the trademarked phrase consistently since 1988 in connection with footwear, apparel, equipment, retail store services, web-based communication, informational services, advertising, and other related goods and services. The court added that Nike “has spent hundreds of millions of dollars advertising and promoting its JUST DO IT mark and has sold tens of millions of dollars in apparel under that mark.”
CGI, which helps emerging companies build their business infrastructure, registered the domain name justdoit.net in 1997. While CGI initially used the domain for employee email addresses, it embraced another purpose in 1999, redirecting internet users to its corporate web site.
“Defendant makes no use of the JUST DO IT mark or the phrase ‘just do it’ on its website, and has no trademark registrations or applications for the JUST DO IT mark,” wrote the court. “Nor is JUST DO IT part of defendant’s legal name or the legal name of any individual in the company. Defendant at no time provided goods or services in connection with the domain name, which was merely used as a redirect to defendant’s primary websites.”
The defendant’s CEO, Gregory Halpern, claimed in a deposition that he used the phrase as his company’s domain name “because it is a positive, catchy and motivational phrase that he has been using for over thirty years, as well as in his book I Care About You, which was published by Can-Do Publishing Company, Inc. in 1978.”
However, no where in the book in the phrase used and the defendant failed to provide any other evidence that would corroborate his testimony “that he used the phrase consistently over the past thirty years.”
The district court wrote that to prevail under the ACPA, the plaintiff must establish that:
(1) its JUST DO IT mark is distinctive and famous;
(2) defendant’s domain name is identical or confusingly similar to plaintiff’s JUST DO IT mark; and
(3) defendant registered or used the domain name with bad faith intent to profit. 15 U.S.C. § 1125(d)(1)(A).
While admitting the applicability of the first two prongs, the defendant argued in response to the motion for summary judgment that its actions did not meet the final prong: bad faith intent to profit.
The federal judge disagreed.
“Defendant registered a domain name containing plaintiff’s famous and distinctive trademark and used that domain name to, among other things, divert web traffic to its own website,” the judge wrote. “Other than defendant’s unsubstantiated representation that its chief executive officer, Halpern, had used the phrase ‘just do it’ in the past, defendant does not appear to have any connection with JUST DO IT: “just do it” is not part of defendant’s name or that of any of its affiliates, and defendant does not make bona fide noncommercial use or fair use of “just do it” on its website. Quite simply, defendant sought to capitalize on plaintiff’s goodwill in its JUST DO IT mark by diverting users to defendant’s primary website by using the justdoit.net domain name.”
Significantly, the court added that even if Halpern could show prior use of the phrase, it would not provide safe harbor and defeat summary judgment.
“As the Fourth Circuit has noted, ‘All but the most blatant cybersquatters will be able to put forth at least some lawful motives for their behavior. To hold that all such individuals may qualify for the safe harbor would frustrate Congress’ purpose by artificially limiting the statute’s reach.’ Virtual Works, Inc. v. Volkswagen of America, Inc., 238 F.3d 264, 270 (4th Cir. 2001).”
Nike, Inc. v. Circle Group Internet, Inc., N.D.Ill., No. 02 C 7192, 5/24/04
Attorneys of Record: (for plaintiff) Mark Van Buren Partridge and Chad J Doellinger of Pattishall, McAuliffe, Newbury, Hillard & Geraldson, Chicago, IL. (for defendant) James Kenneth Borcia of Tressler, Soderstrom, Maloney & Priess, Chicago, IL.


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