UDRP expenses count as injury for purposes of TM case

Migliore & Associates, LLC v. Kentuckiana Reporters, LLC, No. 3:13–CV–315, 2015 WL 730058 (W.D. Ky. Feb. 19, 2015)
Note: a genuine pleasure to read! Thank you, Judge Heyburn. Migliore, a court reporter, sued Kentuckiana for trademark infringement and ACPA cybersquatting.  The court here denied Kentuckiana’s motion for summary judgment.
Intro: “The court reporter game is a tough racket. It’s tougher still when a competitor registers an internet domain name that is confusingly similar to your business name then links it to its own website.” Migliore’s website is at miglioreassociates.com. “Searches on popular internet search engines associate her with court reporting and Migliore & Associates,” and she’s spent thousands of dollars each year promoting her business through print ads, internet listing, and marketing materials.  Kentuckiana registered andorreporters.com, actionreporters.com, coultereporting.com, coulterreporters.com, kentuckycourtreporting.com, kycourtreporter.com, and lisamigliore.com. Five, including the last, were similar or identical to the business names of Kentuckiana competitors. Kentuckiana redirected hits to those websites to its own site.
Migliore sent a C&D; Kentuckiana discontinued the redirection but refused to transfer the domain name.  Migliore filed a UDRP action, during which Kentuckiana maintained that it registered the disputed domain name to use it as a possible “gripe site” or “fact check site” regarding Migliore’s public comments on policy issues related to the court reporter industry. But no content was ever developed for the website. The WIPO arbitrator decided that Kentuckiana acted in bad faith and ordered it to transfer the domain name to Migliore. But Kentuckiana still refused to reimburse Migliore for the costs of bringing the WIPO action, so Migliore sued.
Kentuckiana argued that Migliore lacked standing for want of injury in fact.  “[J]ust because an injury is difficult to measure or quantify does not mean that the injury is nonexistent.”  Injury can exist without provable money damages.  “Beyond legal niceties, it borders on the absurd to assert that purchasing a domain name that includes a variation of a competitor’s personal name, then linking that website to your own, would cause no injury to your competitor…. [A]t the very least, Migliore incurred damage control costs that satisfy the injury requirement for Article III standing.”
It’s important to distinguish the elements necessary to prove a violation of the Lanham Act from the elements necessary to justify a certain remedy. “Lanham Act plaintiffs can sometimes recover for damage control without showing actual confusion or actual damages”; these remedies serve to encourage quick response and the mitigation of damage.  Such costs are awardable when a plaintiff can show (1) likelihood of confusion or damage to profits, goodwill, or sales; (2) that the damage control expenses were caused by defendant’s Lanham Act violation; and (3) that the damage control efforts were reasonable and proportionate to the damage likely to occur.  This category of remedy would be appropriate here, viewing the facts in the light most favorable to Migliore. Thus, she had standing.
Kentuckiana argued that the Sixth Circuit limited damage control costs to false advertising cases, but the court disagreed—the Sixth Circuit has narrowly limited presumptive damages to cases of comparative false advertising, but damage control is a different kind of measure.
Kentuckiana also contended that Migliore lacked a protectable interest in lisamigliore.com and that its use of that domain name was not likely to cause confusion within the relevant purchasing community for court reporting services. The court found a genuine issue of material fact as to both.
Migliore provided sufficient evidence to allow a jury to conclude that “Lisa Migliore” had attained secondary meaning in the relevant purchaser market.  Though she had no consumers ready to testify about the distinctiveness of “Lisa Migliore” and no consumer surveys on the topic, Migliore had exclusive use in Louisville since 1997 (and possibly exclusive use of “Migliore” for court reporting in the US). She’d served thousands of customers.  “Other court reporters—even Kentuckiana at one point—have referred business to Migliore. And, most glaring, others have intentionally copied her name.”  Kentuckiana’s own copying helped establish secondary meaning: “Kentuckiana claims it meant to use the domain name as a gripe site. Fine. But no one would have visited this gripe site—and Kentuckiana’s copying would have been futile—if ‘Lisa Migliore’ had not attained some secondary meaning.”
Similarly, there was a genuine issue of material fact on confusion.  True, as with secondary meaning, Migliore was weak on some of the factors—there was no showing of actual confusion, and Kentuckiana continued to claim intent to use the site as a gripe site.  But a jury should decide.  “[T]here is reason to believe that “Lisa Migliore” is a stronger mark than Kentuckiana lets on. Remember: it copied the mark. It did so for a reason.”
The parties competed to provide fungible services (stenographic versus digital reporting), using the same marketing channel.  Though purchasers arguably are sophisticated clients, it wasn’t “unimaginable” that a lawyer “referred by a colleague to ‘Lisa Migliore’ may, after being redirected from http://www.lisamigliore.com to http://www.kentuckianareporters.com, believe that ‘Lisa Migliore’ is in fact associated with Kentuckiana and pay for Kentuckiana’s services without further inquiry.”  Kentuckiana claimed intent to create a gripe site, but it never did. Given the redirection, and its registration of multiple competitors’ names, “it is easy to infer that Kentuckiana merely wanted to redirect customers away from Migliore and other rivals to its own website.”
So too with ACPA.  Bad faith intent to profit could be inferred from the fact of registration of copycat names for several competitors, all redirected to Kentuckiana’s site.  Kentuckiana claimed that its webmaster was the only person with the know-how or ability to cause this redirection, and that because Kentuckiana never told him to redirect, this must have been an accident. “Fair enough. But Migliore claims otherwise, the bad faith inference is reasonable, so there is a genuine issue of material fact that warrants sending these questions to the jury.” 
The safe harbor for gripe sites was not dispositive.  “Kentuckiana asks this Court not to punish it for exercising its First Amendment right to take part in the political process via this nascent gripe site.”  But “troubling questions” remained: “If this was a gripe site, why was content never added? Why did Kentuckiana register similar domain names to other competitors, even when some of those competitors were not involved in the relevant public policy debate? Why did the domain names redirect to Kentuckiana’s site?”  Maybe the redirection was an accident, but the facts viewed in the light most favorable to Migliore entitled her to reach a jury, where she’d have to prove bad faith.
This entry was posted in acpa, http://schemas.google.com/blogger/2008/kind#post, standing, trademark. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s