DSPT International, Inc. v. Nahum
624 F.3d 1213
| 9th Cir. | 2010Background
- DSPT designs and sells Equilibrio and EQ-branded clothing; EQ marks were used in commerce since 1999.
- Nahum, initially in DSPT, registered the domain name eq-Italy.com for DSPT's site but did so in his own name.
- Nahum later left DSPT, began employment with a DSPT competitor, and the eq-Italy.com site then redirected to a contact for Nahum.
- DSPT suffered a website outage and lost sales in fall 2005–2006; DSPT incurred costs to recreate its site and mitigate branding harm.
- DSPT sued Nahum under the Anticybersquatting Consumer Protection Act (ACPA) and for trademark infringement; Nahum counterclaimed for disputed commissions.
- Jury found ACPA violation, distinctiveness and confusing similarity, and $152,000 in damages; district court denied post-trial motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ACPA apply to use of a domain name to leverage a claim? | Nahum used eq-Italy to gain leverage for commissions. | Use to gain leverage is not bad faith to profit from the mark. | Yes; use can support bad-faith intent to profit under ACPA. |
| Is eq-Italy.com distinctive and confusingly similar to DSPT's EQ mark? | eq-Italy.com is confusingly similar in context of men's shirts; EQ had prior use in commerce. | No genuine confusion; marks operate in different contexts and styles. | Yes; jury could find confusion and similarity in the relevant market. |
| Was there bad-faith intent to profit from the mark under ACPA? | Domain was held for ransom to extract payment; factor VI supports bad faith. | Any profit was related to disputed commissions; not to monopolize the mark. | Yes; the conduct demonstrated intent to profit from DSPT's mark. |
| Were damages under ACPA properly supported? | Lost profits and costs to recreate the site are compensable; precise proof not required. | Damages must be proven with reasonable precision. | Yes; the jury reasonably calculated damages given unavailable precise data. |
Key Cases Cited
- Bosley Medical Institute v. Kremer, 403 F.3d 672 (9th Cir. 2005) (cybersquatting includes ransom-style domain retention for profit)
- Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151 (9th Cir. 2001) (treatment of likelihood of confusion and related marks factors)
- Perfumebay.com Inc. v. eBay, Inc., 506 F.3d 1165 (9th Cir. 2007) (confusing similarity and cybersquatting framework in context of online domains)
- Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999) (totality-of-circumstances approach to protectmark rights in online context)
- Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir. 1993) (damages standards and proving monetary harms)
- Eastman Kodak Co. v. S. Photo Materials Co., 273 U.S. 359 (Supreme Court 1927) (economic damages framework and foreseeability of harms)