• Company That Did Not Register Its Name As Domain Name Suffers Consequences At Hands Of Irate, Internet-Savvy Customer
  • April 8, 2004 | Author: Jonathan M. Eisenberg
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • A dissatisfied customer of a landscaping/nursery business has gotten her revenge online and seen it blessed by the U.S. Court of Appeals for the Sixth Circuit, in the recent case of Lucas Nursery and Landscaping Inc. v. Grosse.

    Michelle Grosse was not pleased with some landscaping work performed for her by Lucas Nursery. Grosse filed a complaint with the local Better Business Bureau (the "BBB"), which investigated the work but came to no conclusions. Taking matters into her own hands, Grosse found that the Internet domain name lucasnursery.com was available for registration. Indeed, Lucas Nursery had no online presence. Grosse registered lucasnursery.com and posted there an essay blasting Lucas Nursery's workmanship (which allegedly cost her an extra $5,400 to have corrected) and the BBB's failure to help. Lucas Nursery's attorney sent Grosse a cease-and-desist letter, but she determined that the company had no registered U.S. trademark in its name and kept up the online attack.

    Lucas Nursery filed a lawsuit under the federal anti-cybersquatting law against Grosse in a federal court in Detroit, MI, but the court granted summary judgment for Grosse.

    On appeal at the Sixth Circuit, the primary question was whether Grosse acted with the requisite bad-faith intent to profit by her use of the domain name. Considering a variety of pertinent circumstances, the Sixth Circuit noted that Grosse did not have any trademark or other intellectual-property rights in the domain name, which was not even a reference to her own personal name or nickname. These factors weighed against any claim that Grosse had legitimate rights in the domain name.

    Weighing in Grosse's favor, however, were the following factors: she listed her true identity and contact information with her domain name registrar; she was making only non-commercial use of the website; she never offered to ransom the domain name to Lucas Nursery (in what would be the quintessential act of cybersquatting); and she had no history of acquiring other domain names that were duplicative of third parties' trademarks. Moreover, the Sixth Circuit found that Grosse did not exhibit an intent to divert consumers away from Lucas Nursery's online location in a way that could harm the company's good will or tarnish its name. A key fact underlying this finding was that Lucas Nursery had no other online presence away from which consumers could be diverted. Hence, the Sixth Circuit upheld Grosse's rights and her website can stay on the Internet (although it is not online presently).

    Prior cases have upheld the rights of other customers who wanted to tell the world about their alleged bad experiences with companies, purchased websites containing the target company names connected with some other pejorative words (e.g., www.compupix.com/ballysucks), and posted criticisms there.

    However, where the domain name in question is simply the unmodified name of the target institution (e.g., peta.org, thebuffalonews.com), courts have tended to side with the hapless institution. The usual rationale is that the institution has an interest in the domain name which is its "natural" online location, and thus the Internet-using public would be confused and hindered in trying to find the institution online. (A primary objective of trademark-related laws is to increase consumers' knowledge and decrease their confusion.)

    In light of these precedents, the Lucas Nursery decision can be criticized for failing to acknowledge that Lucas Nursery's name likely has been tarnished in the eyes of potential or actual customers who looked for the company online (and rightly so, Grosse would probably say). Such customers may well have assumed that Lucas Nursery -- like so many enterprises, of all sizes -- had a website and gone looking for it, found only Grosse's website, and were dissuaded from doing business with the company. The mere fact that a company like Lucas Nursery lacked a website before a determined critic came along seems like a thin basis for letting the company be beat up on the Internet indefinitely at its intuitive online location.

    At this point in the evolution of Internet business, probably most existing companies have secured domain names closely or exactly matching their actual company names. For any business that has lagged in this area, or for start-ups, the Lucas Nursery case should prompt serious consideration of quickly registering the appropriate domain name(s), to avoid the fate that befell Lucas Nursery.