Fifth Circuit follows the trend in criticism site dispute
In TMI Inc v Maxwell, the US Court of Appeals for the Fifth Circuit has reversed a district court decision that found that the defendant's use of domain names featuring the plaintiff's TRENDMAKER mark for a criticism website violated the Anti-cybersquatting Consumer Protection Act (ACPA), the Federal Trademark Dilution Act (FTDA) and Texas anti-dilution law. The Fifth Circuit followed the trend of recent case law, holding that the non-commercial use of a domain name for a criticism site is not infringing, even if the domain name does not convey the critical nature of the site.
TMI sells houses under the mark TRENDMAKER HOMES and operates a website at 'trendmakerhomes.com'. Joseph Maxwell intended to buy a house from TMI but he became dissatisfied with the homes he was shown and a salesperson's alleged misrepresentations. Maxwell registered and used the domain name 'trendmakerhome.com' to tell his story. The site contained a disclaimer at the top of the page indicating that it was not TMI's website. It also featured a section called Treasure Chest, a place where readers could share information about contractors, but this section contained the name of only one person who had done work for Maxwell. Maxwell removed the site after a year and let the domain name registration expire. TMI then sent Maxwell a demand letter requesting that he remove the site and transfer the 'trendmakerhome.com' domain name. In response, Maxwell tried to re-register the domain name but TMI had already registered it. Maxwell then registered 'trendmakerhome.info' but never posted any content at that name. TMI sued Maxwell under the ACPA, and for dilution under the FTDA and Texas law.
The US District Court for the Southern District of Texas upheld TMI's claims. It enjoined Maxwell from using, among others, the mark TRENDMAKER and ordered him to transfer 'trendmakerhome.info' to TMI.
On appeal, the Fifth Circuit reversed on all claims. It first determined that FTDA claims must involve commercial use to be actionable. It then rejected TMI's argument that the Treasure Chest portion of Maxwell's site was commercial because:
- Maxwell never accepted payment for any listing;
- Maxwell did not charge to view the site;
- the site did not contain advertising or links to other websites; and
- Maxwell was not in the business of selling domain names.
The Fifth Circuit therefore reversed the district court's finding that Maxwell had violated the FTDA. It also overturned the lower court's decision on the Texas dilution claim, stating that the Texan law was not designed to address cases involving "non-trademark uses of a name to comment on, criticize, ridicule, parody, or disparage the goods or business of the name's owner".
The Fifth Circuit next considered the ACPA claim. It held that Maxwell's non-commercial use of TMI's mark in the domain name 'trendmakerhome.com' to inform consumers of his experience with TMI, without any offer to sell the name, did not constitute a bad-faith intent to profit from TMI's mark. Nor did his registration of a second domain name, 'trendmakerhome.info', constitute bad faith because he registered it for the same purposes as 'trendmakerhome.com' and only after the first name expired.
This decision is consistent with a growing trend in case law to permit use of domain names featuring third-party trademarks for criticism sites, even if the domain name does not convey the critical nature of the site. Examples of these rulings include Lucas Nursery and Landscaping Inc v Grosse (see Interpretation of ACPA's area of control is on level ground ) and Rohr-Gurnee Motors Inc v Patterson, 2004 US Dist LEXIS 2068 (ND Ill February 9 2004) (relating to the domain name 'gurneevolkswagen.com').
David M Kelly, Finnegan Henderson Farabow Garrett & Dunner LLP, Washington DC
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