Christopher J. HAWES, d/b/a CJH Color and Design Group v. NETWORK SOLUTIONS, INCORPORATED; L‘Oreal, a Societe Anonyme
Nos. 02-1182, 02-1377, 02-1824, 02-1825
United States Court of Appeals, Fourth Circuit
July 9, 2003
337 F.3d 377
Before WIDENER, WILKINSON, and NIEMEYER, Circuit Judges.
Affirmed in part, reversed in part, and remanded by published opinion. Judge NIEMEYER wrote the opinion, in which Judge WIDENER and Judge WILKINSON joined.
OPINION
NIEMEYER, Circuit Judge:
Christopher J. Hawes, doing business as CJH Color and Design Group (“Hawes“), commenced this action against Network Solutions, Inc. and L‘Oreal, S.A., a French corporation, under the Lanham Act as amended by the Anticybersquatting Consumer Protection Act, for a declaratory judgment that Network Solutions’ transfer of his domain name <lorealcomplaints.com> to L‘Oreal was “improper” and that his registration and use of <lorealcomplaints.com> was “not unlawful.” He also seeks an injunction ordering the return of the domain name. The district court dismissed Hawes’ complaint for lack of subject matter jurisdiction, under
For reasons that differ from those given by the district court, we affirm dismissal of Hawes’ complaint against Network Solutions. We reverse the district court‘s order dismissing Hawes’ complaint against L‘Oreal and remand that portion of the case for further proceedings.
I
In April 1999, Hawes registered the domain name <lorealcomplaints.com> with Network Solutions, Inc. in Herndon, Virginia, and, in connection with that registration, entered into a Domain Name Registration Agreement. Hawes alleges that he registered the domain name to develop a forum in which to communicate with L‘Oreal concerning problems with its products because his efforts to communicate with L‘Oreal had been unsuccessful and its representatives were unable to “properly answer [Hawes‘] inquiries.”
A little over a year after Hawes registered <lorealcomplaints.com>, L‘Oreal filed suit against Hawes in a French court, alleging infringement of L‘Oreal‘s French trademarks. Upon learning of this French litigation, Network Solutions transmitted a “Registrar Certificate” for the domain name <lorealcomplaints.com> to counsel for L‘Oreal in Paris, tendering control and authority over the registration of the domain name to the French court, in accordance with Network Solutions’ “standard service agreement with its registrants and the dispute policy incorporated therein.” On Hawes’ failure to appear before the French court, the court entered judgment in favor of L‘Oreal and ordered the domain name <lorealcomplaints.com> to be transferred to L‘Oreal. Hawes has challenged the French court‘s jurisdiction through appellate review. After Hawes received notice of the French court‘s order, he wrote Network Solutions a letter stating that if Network Solutions transferred the domain name pursuant to its dispute resolution policy and the ensuing French court order, then he would file suit in a federal court in the United States to establish that his registration and use of <lorealcomplaints.com> was not unlawful. Notwithstanding this letter, Network Solutions transferred the name to L‘Oreal on October 5, 2000.
In April 2001, Hawes commenced this action by filing a two-count complaint
On Network Solutions’ motion to dismiss, filed under
After discovery proceeded for about four months, L‘Oreal renewed its motion under
I believe that [Hawes has] the right to come in, if this domain name has been improperly transferred, whether it has or not is another question, but if it has been improperly transferred, [he has] the right to come in and ask for that domain name back. But now I find myself in a posture where my colleague has dismissed out of the case the very person who has to be here in order to get that accomplished.
Judge Hilton then referred the matter back to Judge Lee. A few days later Judge Lee granted L‘Oreal‘s motion to dismiss under
From the final judgment dismissing the claims against both Network Solutions and L‘Oreal for lack of subject matter jurisdiction, Hawes filed this appeal.
II
In dismissing Count I of the complaint, which alleged that Network Solutions improperly transferred the domain name <lorealcomplaints.com>, the district court construed the claim as one under
[Hawes] never alleges that any underlying ACPA action was in existence when [Network Solutions] allegedly transferred the LOREALCOMPLAINTS.COM domain name. Without the existence of an underlying action, [Network Solutions], as a domain name registry, could not be in violation of
15 U.S.C. § 1114 .
In dismissing Count II of the complaint, which was asserted against L‘Oreal to obtain the declaration that Hawes’ registration and use of the domain name <lorealcomplaints.com> was “not unlawful under Title 15, United States Code, § 1114(II) [sic],” the district court concluded that it did not have subject matter jurisdiction for three reasons. First, it found that there was no justiciable case or controversy, explaining that “[a] mere desire to use a trademark in connection with a product does not constitute a course of conduct placing a party in a legally adversarial conflict with another party.” Second, construing Count II as a claim under
In reaching these conclusions, the district court was required to interpret the complaint with scant help from Hawes’ now-replaced counsel, who based both counts of the complaint on “15 U.S.C. § 1114(II),” a statutory provision that does not exist. Nonetheless, the district court‘s conclusions that Count I against Network Solutions was based on
Count I, which Hawes denominated “Improper Transfer of Domain Name,” alleges that Network Solutions “has transferred, suspended, or otherwise modified the domain name ‘LOREALCOMPLAINTS.COM’ contrary to Title 15 of the United States Code, § 1114(II) and [Hawes] is thereby entitled to injunctive relief.” This language mirrors the language of
(I) A domain name registrar . . . that takes any action described under clause (ii) [“refusing to register, removing from registration, transferring, temporarily disabling, or permanently canceling a domain name“] affecting a domain name shall not be liable for monetary relief or, except as provided in subclause (II), for injunctive relief, to any person for such action, regardless of whether the domain name is finally determined to infringe or dilute the mark.
(II) A domain name registrar . . . may be subject to injunctive relief only if such registrar . . . has—
(aa) not expeditiously deposited with a court, in which an action has been filed regarding the disposition of the domain name, documents sufficient for the court to establish the court‘s control and authority regarding the disposition of the registration and use of the domain name;
(bb) transferred, suspended, or otherwise modified the domain name during the pendency of the action, except upon order of the court; or (cc) willfully failed to comply with any such court order.
It is therefore apparent that Hawes brought Count I under
Count II, which Hawes denominated an “Action under the Anticybersquatting Consumer Protection Act,” alleges that “the mark owner of ‘L‘Oreal’ has received notice that [Hawes] intended to file a civil action to establish that the registration or use of ‘LOREALCOMPLAINTS.COM’ by [Hawes] is not unlawful.” In this count, Hawes asks that this Honorable Court hold that the registration and/or use of the domain name “LOREALCOMPLAINTS.COM” by plaintiff is not unlawful under Title 15, United States Code, § 1114(II) and that this Honorable Court reactivate the domain name “LOREALCOMPLAINTS.COM” and/or transfer said domain name to [Hawes]. This language mirrors precisely the language of
A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.
It is therefore apparent that Hawes brought Count II under subpart (D)(v) of
Agreeing with the district court‘s identification of the statutory provisions on which Counts I and II rest, we now address whether the district court properly dismissed them for lack of subject matter jurisdiction under
A
Count I, brought under
For this reason, the district court erred in dismissing Count I under
Considering the complaint against the standards applicable to a
Hawes did allege that Network Solutions tendered control over the domain name to the French court after L‘Oreal commenced an action in France against Hawes for infringing L‘Oreal‘s French trademarks, but the pendency of a foreign action is irrelevant to the question of whether a registrar is exposed to liability under the Lanham Act. This conclusion that the French proceedings are irrelevant to a registrar‘s liability under
The ACPA creates a cause of action for cybersquatting against anyone who registers, traffics in, or uses a domain name that is identical or confusingly similar to a trademark with the badfaith intent to profit from the good will associated with the trademark. See
In this case, there was no anticybersquatting action or reverse anticybersquatting action under the ACPA pending in any court at the time Network Solutions transferred the domain name <lorealcomplaints.com>. Because there was no action adjudicating Lanham Act liability, there could be no allegation that Network Solutions was not cooperating with a court in a domain name dispute involving domain name hijacking or reverse domain name hijacking, and thus there could be no basis to consider an exception from the limitation of liability. Accordingly, the district court was correct in concluding that the complaint failed to include a necessary averment of fact in support of a claim to find Network Solutions’ conduct fell within the exception to the limitation of liability granted by
Thus, we agree with the district court that the claim against Network Solutions must be dismissed, but we affirm this conclusion on the basis of
B
Count II against L‘Oreal is brought under
The district court dismissed Hawes’ reverse domain name hijacking claim, concluding that, under
The district court also supported its conclusion that it lacked subject matter jurisdiction because one element of Hawes’ claim under
While an element of a claim under
[T]o establish a right to relief against an “overreaching trademark owner” under this reverse hijacking provision, a plaintiff must establish (1) that it is a domain name registrant; (2) that its domain name was suspended, disabled, or transferred under a policy implemented by a registrar as described in
15 U.S.C. § 1114(2)(D)(ii)(II) ; (3) that the owner of the mark that prompted the domain name to be suspended, disabled, or transferred has notice of the action by service or otherwise; and (4) that the plaintiff‘s registration or use of the domain name is not unlawful under the Lanham Act as amended.
Barcelona.com, 330 F.3d at 626-27. But the statute makes none of these elements jurisdictional. Rather, jurisdiction is conferred by the fact that the cause of action provided under
But even on the district court‘s assumption that a jurisdictional element has been omitted because Network Solutions’ policy was not involved, the court misread the complaint. The complaint alleges that Network Solutions breached its Domain Name Registration Agreement by transferring control over the domain name to a French court or, more precisely, to counsel for L‘Oreal for deposit in the French court. It asserted that “[a]s a direct and proximate cause of said material breach of said Domain Name Registration Agreement, [Hawes] . . . seeks an interpretation of said Domain Name Registration Agreement . . . as to whether Network [Solutions] is allowed to tender and/or transfer to the Republic of France complete control and authority over the registration of the domain name.” The complaint also quotes from the letter that Hawes’ lawyer sent to Network Solutions and copied to L‘Oreal indicating an intent to file an action “to establish that the registration and/or use of the above-referenced domain name by [Hawes] is not unlawful.” Finally, the complaint actually included a copy of the Domain Name Registration Agreement which includes Network Solutions’ “Domain Name Dispute Policy,” pursuant to which Network Solutions purportedly transferred control over the domain name,
Fully and fairly read, the complaint alleges that the transfer of the domain name took place pursuant to Network Solutions’ Domain Name Dispute Policy as contained in the Domain Name Registration Agreement, and it was because of that policy, as interpreted by Network Solutions, that the Registrar Certificate was filed with the French court and that the domain name was ultimately transferred. Because L‘Oreal is alleged to have received the domain name <lorealcomplaints.com> on the basis of Network Solutions’ interpretation of the scope of its “Domain Name Dispute Policy,” the second element for a cause of action under
In sum, as we note here and in Part II.A above, the district court had subject matter jurisdiction over Hawes’ claim brought under the Lanham Act as amended by the ACPA, and Hawes’ complaint purports to state a claim against L‘Oreal alleging a cause of action under that Act.*
We should add that our conclusion that Hawes’ complaint states a cause of action under
Although a
In holding that Hawes has alleged a cause of action under
In view of our reversal of the district court‘s dismissal order, we expect that the district court will allow L‘Oreal to reinstate its counterclaims for adjudication with Hawes’ claim under
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
