Charter West Bank v. Riddle
989 N.W.2d 428
Neb.2023Background:
- Charter West Bank is a Nebraska bank; former customers Justin and Erin Riddle bought the domain "www.charterwestbank.com" after a denied mortgage and threatened to post adverse information and offer the site for sale for $1,000,000.
- Charter West sued the Riddles in Nebraska state district court under the Anticybersquatting Consumer Protection Act (ACPA); the Riddles had earlier sued Charter West in federal court (that suit was removed to federal court).
- The district court granted a preliminary injunction barring the Riddles from using or transferring the domain, held a bench trial, found an ACPA violation, and ultimately entered a permanent injunction enjoining use of domain names containing "charter west."
- Charter West sought transfer of the domain and injunctive relief based on alleged cybersquatting and bad-faith intent to profit.
- On appeal, the Nebraska Supreme Court reviewed jurisdiction and ACPA elements de novo and concluded Charter West failed to prove its legal name was a "distinctive" or "famous" mark at the time the Riddles registered the domain.
- Holding: the Supreme Court reversed the district court, vacated the permanent injunction, and dismissed the ACPA action for failure to prove a protectable mark; the Court also held state courts have concurrent jurisdiction over Lanham Act/ACPA claims.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the state district court had subject-matter jurisdiction over an ACPA (Lanham Act) claim | Charter West proceeded in state court; argued the case belongs there | Riddles contended the matter falls under federal law and federal jurisdiction | Held: State and federal courts have concurrent jurisdiction over Lanham Act/ACPA claims; district court had jurisdiction |
| Whether Charter West owned a protectable mark (registration required?) | Charter West relied on its legal name "Charter West Bank" and ownership/use of related domain names | Riddles argued lack of registered trademark and lack of rights to the term | Held: Registration not required under ACPA; ownership of a mark can be shown without federal registration (Matal v. Tam applied) |
| Whether Charter West’s mark was "distinctive" or "famous" at time of domain registration (element of ACPA) | Charter West asserted its name entitled it to protection and emphasized confusing similarity and bad faith | Riddles argued the name was generic/descriptive and not famous or inherently distinctive; no evidence of acquired distinctiveness | Held: Charter West failed to prove the mark was either distinctive or famous; dispositive failure—ACPA protection not established; injunction vacated |
| Admissibility of settlement emails and other evidence (Rule 408) | Charter West introduced emails showing threats, settlement discussions, and intent | Riddles argued settlement communications were barred or inadmissible under Rule 408 and otherwise insufficient | Held: Court did not decide this issue on appeal because reversal was based on lack of protectable mark (other assignments not reached) |
Key Cases Cited
- Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368 (concurrent federal/state-jurisdiction presumption cited)
- Matal v. Tam, 582 U.S. 218 (ownership/protection under ACPA not limited to registered marks)
- Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (framework for inherent distinctiveness of marks)
- Park ’N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (generic marks not protectable)
- DaimlerChrysler v. The Net, Inc., 388 F.3d 201 (illustrative ACPA jurisprudence on elements)
- Coca-Cola Co. v. Purdy, 382 F.3d 774 (discussing marks vs. domain names in Lanham Act context)