Motion to dismiss, transfer or stay cybersquatting action refused

In Argos v Orthotec LLC (2004 WL 60691), the US District Court for the District of Delaware has denied Orthotec LLC's motion to:

• dismiss Argos's complaint for lack of standing or failure to state a claim;
  
  
• transfer the action to the US District Court for the Central District of California; or
  
  
• stay the proceedings.

Orthotec, which designs products for spinal surgery, registered the domain name 'argos-us.com' in 1999. Argos, a French-based non-profit organization promoting applied research in spinal surgery, filed an action under the cybersquatting provisions of the Lanham Act (15 USC §1125(d)) on the basis of its ARGOS trademark.

The US District Court for the District of Delaware denied Orthotec's motion to dismiss, transfer or stay the proceedings. First, the court refused the motion for lack of standing, rejecting the assertion that Argos did not continuously and substantially use its ARGOS mark in US commerce prior to 1999, the year Orthotec registered 'argos-us.com'. According to Orthotec, Argos merely advertised and promoted its mark, which does not constitute use in commerce. However, the court found that "the scope of 'in commerce' as a jurisdictional predicate of the Lanham Act is broad" and Argos's operation of a website at 'argos-europe.com' satisfied the 'use in commerce' requirement.

Second, the court denied Orthotec's motion to dismiss for failure to state a claim. Orthotec contended that Argos did not allege a bad-faith intent to profit from registration of 'argos-us.com', a requirement for a cybersquatting action. The court determined that the drafters of the cybersquatting provision of the Lanham Act did not intend a narrow interpretation for this prong of the test; Argos's complaint alleged that Orthotec had attempted to trade on Argos's goodwill and generate confusion, and this was enough to withstand a motion to dismiss.

Third, the court denied the motion to transfer venue. It noted that Orthotec was incorporated in Delaware and therefore "exposed itself to the possibility of litigation in Delaware". The court stated that both private and public factors warranted maintaining the action in Delaware.

Finally, the court denied motion to stay the proceedings pending the outcome of Argos's opposition against Orthotec's trademark application for the mark ARGOS at the US Patent and Trademark Office. The court concluded that the trademark opposition proceeding was unrelated to the cybersquatting action and a stay would only "delay Argos's right to adjudicate its case against Orthotec".

The case will now proceed in the Delaware court.

Leigh Ann Lindquist, Sughrue Mion PLLC, Washington DC