Cybersquatter Gets Swatted Down

Cybersquatter Gets Swatted Down by Mark KaufmanThey said it couldn’t be done, but Kaufman & Kahn recently not only won summary judgment against a prolific cyber-squatter, but also won an award of statutory damages and attorney’s fees.

Gregory Ricks, a renowned cyber-squatter, had registered the domain name justbulbs.com, and he’d done that because, frankly, my client named JUST BULBS had failed to renew it. So arbitration was commenced.

Over 10 years ago, the client (through a different attorney) had lost in a Uniform Domain Resolution Procedure, or UDRP, arbitration. One of the reasons they lost was the arbitrator’s noting that the respondent was not using the domain name for light bulbs (which the client sells), but instead showed his so-called “good faith” by starting to use it for flower bulbs — so he supposedly was not infringing on the client’s trademark.

However, some years later, the squatter started using the site to direct traffic to other light bulb retailers, in direct violation of the decision. We brought another UDRP proceeding, which again rejected the claim, saying that at the time of registration the squatter was not acting in bad faith, and that’s pretty much the only thing a UDRP is empowered to resolve.  However, the arbitrator added an encouraging bit of advice: Although the UDRP had relatively limited powers, perhaps the client should sue the squatter in a court of law instead.

So we did. In Houston, Texas (to prevent the defendant’s bringing a motion for inconvenient forum:  “Hey, I’ve never been to New York City, you can’t sue me there!”).

We deposed this renowned domain squatter, who admitted to owning well over 5,000 domain names, had been in 20 UDRP proceedings, and 17 federal lawsuits — virtually all of which had resulted in his settling and transferring the domain names. So he had reason to know that he was infringing on trademarks. We pointed that he had registered and been sued for domain names that mirrored large, popular brands, including HP, SKIDOO, GOLFMATE, HTS (for Home Team Sports, on FOX News), and PLAYBOY, as well as others that were more obscure, but so specific (such as www.lexingtonmedicalgroup.com) that he clearly intended to hold the rightful owners hostage to his “visionary” business plan.

Ricks said he had never checked with the USPTO to see if any of what he was registering infringed on someone else’s trademark (which we later argued meant he was recklessly indifferent to others’ trademark rights), and he certainly knew of the client’s mark (from prior arbitrations). He alleged he hadn’t known that the UDRP arbitrator said that his post-registration use of justbulbs.com for light bulbs was in bad faith,  because he hadn’t read that decision. (We later argued that was simply not credible; the judge agreed.)

The court initially found, through our motion and summary judgment, that “Defendant’s egregious pattern of cybersquatting shows bad faith.” (“Egregious.” You don’t get THAT every day.) However, he was not necessarily liable for trademark infringement or for violating the Texas anti-dilution statute, because whether JUSTBULBS was a distinctive enough trademark that merited the protection of those laws was a question for the jury. So, not having carved the complaint in stone, we amended it, deleted those claims subject to a jury trial, and presented the court with only one claim: cyber-squatting, which the judge had already found in our favor.

After awaiting the Magistrate Judge’s review and consideration of our renewed motion for summary judgment and attorneys’ fees, the court awarded statutory damages in the amount of $50,000.00 — less than the maximum of $100,000.00 that we had requested, but still affirming that this defendant deserved to be schooled. Of course, the court directed that the domain name be transferred to the client, and also enjoined Ricks from using any name similar to our client’s trademark. And, yes, the court also awarded every dollar that we requested for attorneys’ fees and costs.

Another client, who is in the business of buying and selling domain names — in a more careful, ethical fashion — was following the litigation, said that succeeding against Ricks would be a real feather in our cap, because he’s renowned in that industry for buying up names and selling them at a calculated price point, regardless of his actual need or intent to use the domain name.

My client really believed in litigating, because what this other guy was doing was wrong. I appreciate that not everyone has the time or is able to commit to going all the way, but at the end of the rainbow there is some reward when the facts and law can be laid out clearly, and the judge gets it right.

Mark Kaufman

Mark S. Kaufman
Kaufman & Kahn
kaufman@kaufmankahn.com

747 Third Avenue
32nd Floor
New York, NY 10017
Tel. (212) 293-5556
Fax. (212) 355-5009

Blogs offer an accessible way for readers to learn more about issues that are important to them, but their short format is in no way representative of the entire breadth of knowledge that an attorney possesses. The only way to ascertain your legal rights and responsibilities is to engage an attorney in an official capacity, as a client.

1 comment

  • Alan Barson Permalink

    Great work, Mark! Thanks for sharing.

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