Nike wins on the replay in 'JustDoIt.Net' dispute

In Nike Inc v Circle Group Internet Inc (1:02-cv-7192), the US District Court for the Northern District of Illinois has granted summary judgment in favour of the plaintiff on its claim that the defendant's use of 'JustDoIt.net' amounted to cybersquatting. The ruling overturns a World Intellectual Property Organization (WIPO) panel decision that had refused to order the transfer of the domain name.

Nike has used the federally registered mark JUST DO IT to promote its footwear, apparel and other products since 1988. The defendant, Circle Group Internet, assists emerging companies to build their business infrastructure. In 1997, Circle Group registered the domain name 'JustDoIt.net' and used it for employee email addresses. Between 1999 and 2002, Circle Group used the domain name to redirect users to its 'circlegroupinternet.com' and 'crgq.com' websites. Circle Group made no use of JUST DO IT on its websites and offered no products or services under the mark. Although Circle Group's chief executive admitted that he probably knew of Nike's use of JUST DO IT before registering the domain name in 1997, he claimed to have chosen 'JustDoIt.net' because "it is a positive, catchy and motivational phrase that he has been using for over 30 years". He also claimed to have used the phrase in a book he wrote in 1978. Circle Group submitted no evidence, however, to corroborate either claim.

Nike filed a Uniform Domain Name Dispute Resolution Policy (UDRP) complaint with WIPO against Circle Group but a split panel ruled against Nike due to a lack of bad faith on Circle Group's part (see Nike loses split decision on 'JustDoIt.net'). Nike then filed a lawsuit with the US District Court for the Northern District of Illinois claiming that Circle Group's use of 'JustDoIt.net' amounted to cybersquatting and dilution. Nike moved for summary judgment on its cybersquatting claim and Circle Group sought summary judgment on the dilution claim.

Regarding the cybersquatting claim, the court granted summary judgment to Nike. Circle Group's registration and use of a domain name in which it had no IP rights to redirect users to its commercial websites, all with knowledge of Nike's use of JUST DO IT, satisfied the requirement that Circle Group had a bad-faith intent to profit from Nike's mark. The UDRP decision in Circle Group's favour did not preclude a finding of bad faith because that decision was based on the panel's mistaken belief that Circle Group used 'JustDoIt.net' as its main website. In addition, the absence of an offer by Circle Group to sell the domain name did not preclude a finding of bad faith since that is only one of many factors considered by the court in assessing bad faith.

Turning to the dilution claim, the court denied Circle Group's motion for summary judgment because an issue of material fact existed as to whether there was actual dilution as required by Moseley v V Secret Catalogue Inc. The parties disputed the meaning of the Supreme Court's dicta in Moseley that:

"direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proved through circumstantial evidence - the obvious case is one where the junior and senior marks are identical."

Nike argued that the fact that the marks are identical alone constituted circumstantial evidence of actual dilution, while Circle Group argued that it simply gave Nike the ability to submit circumstantial evidence in an attempt to prove actual dilution. But the court did not need to resolve these competing interpretations of Moseley. It found that there was an issue of material fact that precluded summary judgment based on the identity of the marks and Circle Group's admissions that (i) the disputed domain name had "become recognized as having some relation to [Circle Group] by its employees and customers", and (ii) people would mentally associate 'JustDoIt.net' with Nike.

David M Kelly, Finnegan Henderson Farabow Garrett & Dunner LLP, Washington DC