Federal court in Virginia overturns NAF decision

In Retail Services Inc v Freebies Publishing (2003 US Dist LEXIS 2934), the US District Court for the Eastern District of Virginia has overturned a National Arbitration Forum decision that ordered the transfer of the domain name 'freebie.com'. The court ruled that (i) panellist Carolyn M Johnson incorrectly found that the registrant, Retail Services (RS), sought to divert internet users from Freebies Publishing (FP), the owner of the FREEBIES mark, and (ii) RS had not violated the Anti-cybersquatting Consumer Protection Act.

FP registered the FREEBIES mark in 1977 and used it until 2001 for periodicals with information about free mail-order offerings. The 1977 registration was abandoned in 1985, but FP obtained a new registration in 1993. In 1991, during the time FP's registration was abandoned, RS registered 'freebie.com' for use in connection with a website and computer system that tracks retail transactions and provides incentive offers. When the website became operational in 2001, FP brought proceedings against RS under the Uniform Domain Name Dispute Resolution Policy seeking transfer of the domain name.

Johnson, the sole panellist, ordered the transfer, concluding that RS's domain name was confusingly similar to FP's registered mark and RS sought to divert internet users from FP.

RS then filed the federal suit seeking to reverse the UDRP decision. It argued that 'freebie' is a generic term for something given or received without charge and, therefore, FP's registration must be cancelled. FP contended that its mark has acquired distinctiveness through use and that it does not use the mark to provide free things.

The district court found FP's argument unsupported by the evidence, noting that its website banner states: "Bringing you the best free and almost free offers since 1977!" Thus, the court concluded that FP, through its own actions, allowed the mark to lose whatever acquired distinctiveness it may have gained over 22 years of use and thereby allowed it to become generic. The court went on to hold that a generic word is ineligible for trademark protection and, therefore, RS had not violated the Anti-cybersquatting Consumer Protection Act.

Brian E Banner, Banner & Witcoff Ltd, Washington DC

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