Trademarks & Service Marks: PETA v. Doughney

PEOPLE FOR THE ETHICAL TREATMENT OF ANIMALS, Plaintift-Appellee MICHAEL T. DOUGHNEY, an individual, Defendant-Appellant UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT 263 F.3d 359 August 23, 2001 GREGORY, Circuit Judge: People for the Ethical Treatment of Animals ("PETA") sued Michael Doughney ("Doughney") after he registered the domain name peta.org and created a website called "People Eating Tasty Animals." PETA alleged claims of service mark infringement under 1S U.S.C. § 1114 and Virginia common law, unfair competition under 15 U.S.C. § 1125(a) and Virginia common law, and service mark dilution and cybersquatting under 15 U.S.C. § 1123(c). Doughney appeals the district court's decision granting PETA's motion for summary judgment... Finding no error, we affirm. PETA is an animal rights organization with more than 600,000 members worldwide. PETA "is dedicated to promoting and heightening public awareness of animal protection issues and it opposes the exploitation of animals for food, clothing, entertainment and vivisection." Appelice/Cross-Appellant PETA's Brief at 7. Doughney is a former internet executive who has registered many domain names since 1995. For example," Doughney registered domain names such as dubyadot.com, dubyadot.net, deathbush.com, RandallTerry.org (Not Randall Terry for Congress), bwtel.com (Baltimore Washington Telcphone Company), pmrc.org ("People's Manic Repressive Church*), and ex-cult.org (Ex-Cult Archive). At the time the district court issued its summary judgment ruling, Doughney owned 50-60 domain names. Doughney registered the domain name peta.org in 1995 with Network Solutions, Inc. ("NSI"). When registering the domain name, Doughney represented to NST that the registration did "not interfere with or infringe upon the rights of any third party," and that a "nonprofit educational organization" called "People Eating Tasty Animals" was registering the domain name. Doughney made these representations to NSI despite knowing that no corporation, partnership, organization or entity of any kind existed or traded under that name. Moreover, Doughney was familiar with PETA and its beliefs and had been for at least 15 years before registering the domain name. After registering the peta.org domain name, Doughney used it to create a website purportedly on behalf of "People Eating Tasty Animals." Doughney claims he created the website as a parody of PETA. A viewer accessing the website would see the title "People Eating Tasty Animals" in large, bold type. Under the title, the viewer would see a statement that the website was a "resource for those who enjoy eating meat, wearing fur and leather, hunting, and the fruits of scientific research." The website contained links to various meat, fur, leather, hunting, animal research, and other organizations, all of which held views generally antithetical to PETA's views. Another statement on the website asked the viewer whether he/she was "Feeling lost? Offended? Perhaps you should, like, exit immediately." The phrase "exit immediately" contained a hyperlink to PETA's official website. Doughney's website appeared at "www.peta.org" for only six months in 1995-96. In 1996, PETA asked Doughney to voluntarily transfer the peta.org domain name to PETA because PETA owned the "PETA" mark ("the Mark"), which it registered in 1992. See U.S. Trademark Registration No. 1705,510. When Doughney refused to transfer the domain name to PETA, PETA complained to NSI, whose rules then required it to place the domain name on "hold" pending resolution of Doughney's dispute with PETA. (1) Consequently, Doughney moved the website to www.mtd.com/tasty and added a disclaimer stating that "People Eating Tasty Animals is in no way connected with, or endorsed by, People for the Ethical Treatment of Animals." In response to Doughney's domain name dispute with PETA, The Chronicle of Philanthropy quoted Doughney as stating that, "if they [PETA] want one of my domains, they should make me an offer." Non- Profit Groups Upset by Unauthorized Use of Their Names on the Internct, THE CHRONICLE OF PHILANTHROPY, Nov. 14, 1996. Doughney does not dispute making this statement. Additionally, Doughney posted the following message on his website on May 12, 1996: "PeTa" has no legal grounds whatsoever to make even the slightest demands of me regarding this domain name registration. If they disagree, they can sue me. And if they don't, well, perhaps they can behave like the polite ladies and gentlemen that they evidently aren't and negotiate a settlement with me.... Otherwise, "PeTa" can wait until the significance and value of a domain name drops to nearly nothing, which is inevitable as each new web search engine comes on-line, because that's how long it's going to take for this dispute to play out. PETA sued Doughney in 1999, asserting claims for service mark infringement, unfair competition, dilution and cybersquatting. PETA did not seek damages, but sought only to enjoin Doughney's use of the "PETA" Mark and an order requiring Doughney to transfer the peta.org domain name to PETA. Doughney responded to the suit by arguing that the website was a constitutionally-protected parody of PETA. Nonetheless, the district court granted PETA's motion for summary judgment on June 12, 2000. People for the Ethical Treatment of Animals, Inc. v. Doughney, 113 F. Supp. 2d 915 (E.D. Va. 2000). The district court rejected Doughney's parody defense, explaining that only after arriving at the "PETA.ORG" web site could the web site browser determine that this was not a web site owned, controlled or sponsored by PETA. Therefore, the two images: (1) the famous PETA name and (2) the "People Eating Tasty Animals" website was not a parody because [they were not) simultancous. Id. at 921. PETA subsequently moved for attorney fees and costs. The district court denied the motion, finding that the case was not "exceptional" under 15 U.S.C. § 1117. PETA moved to reconsider in part, arguing that it was entitled to "costs of the action" and attaching a statement for filing fees, photocopying, facsimiles, courier services, postage, travel, mileage, tolls, parking, long distance telephone calls, "services," transcripts, computer research, "miscellaneous" expenses, and witness fees and mileage. The district court ruled on September 15, 2000, stating that Plaintiff has submitted to the Court what it asserts is an itemization of its expenses without providing any supporting documentation or legal analysis of why these expenses are "costs of the action" within, the meaning of 15 U.S.C. § 1117(a) and 28 U.S.C. § 1920. Defendant challenges Plaintiff's expenses as excessive. It appears to the Court that many of Plaintiff's expenses are for merc "trial preparation," and not recoverable as costs. For those reasons it is hereby, ORDERED that Plaintiff's Motion for Reconsideration and/or Clarification is DENIED except that Plaintiff shall be awarded those costs routinely taxed by the Clerk. Plaintiff shall not receive as costs mere trial preparation expenses. Plaintiff shall submit a Bill of Costs to the Clerk of the Court. People for the Ethical Treatment of Animals, Inc. v. Doughney, 113 F.Supp 915 (E.D. Va. 2000). We review a district court's summary judgment ruling de novo, viewing the evidence in the light most favorable to the non-moving party. Goldstein v. The Chestnut Ridge Volunteer Fire Co., 218 F.3d 337, 340 (4th Cir. 2000); Binakonsky v. Ford Motor Co., 133 F.3d 281, 284-85 (4th Cir. 1998). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. A. Trademark Infringement/Unfair Competition| A plaintift alleging causes of action for trademark infringement and unfair competition must prove (1) that it possesses a mark; (2) that the defendant used the mark; (3) that the defendant's use of the mark occurred "in commerce"; (4) that the dofendant used the mark "in connection with the sale, offering for sale, distribution, or advertising" of goods or services; and (5) that the defendant used the mark in a manner likely to confuse consumers. 15 U.S.C. $§ 1114, 1125(a); Lone Star Steakhouse & Saloon v. Alpha of Virginia, 43 F.3d 922, 930 (4th Cir. 1995). (2] There is no dispute here that PETA owns the "PETA" Mark, that Doughney used it, and that Doughney used the Mark "in commerce." Doughney disputes the district court's findings that he used the Mark in connection with goods or services and that he used it in a manner engendering a likelihood of confusion. 1. To use PETA's Mark "in connection with" goods or services, Doughney need not have actually sold or advertised goods or services on the www.peta.org website. Rather, Doughney need only have prevented users from obtaining or using PETA's goods or services, or need only have connected the website to other's goods or services. While sparse, existing caselaw on infringement and unfair competition in the Internet context clearly weighs in favor of this conclusion. For example, in OBH, Inc. v. Spotlight Magazine, Inc., the plaintifis owned the "The Buffalo News" registered trademark used by the newspaper of the same name. 86 F. Supp. 2d 176 (W.D. N.Y. 2000). The defendants registered the domain name thebuffalonews.com and created a website parodying The Buffalo News and providing a public forum for criticism of the newspaper. Id. at 182. The site contained hyperlinks to other local news sources and a site owned by the defendants that advertised Buftalo-area apartments for rent. Id. at 183. The court held that the defendants used the mark "in connection with" goods or services because the defendants' website was "likely to prevent or hinder Internet users from accessing plaintiffs' services on plaintifts' own web site." Id. Prospective users of plaintiffs' services who mistakenly access defendants' web site may fail to continue to search for plaintiffs' web site due to confusion or frustration. Such users, who are presumably looking for the news services provided by the plaintifis on their web site, may instead opt to select one of the several other news-related hyperlinks contained in defendants' web site. These news-related hyperlinks will directly link the user to other news-related web sites that are in direct competition with plaintiffs in providing news-related services over the Internet, Thus, defendants' action in appropriating plaintiff's mark has a connection to plaintiffs distribution of its services. Id. Moreover, the court explained that defendants' use of the plaintiffs' mark was in connection with goods or services because it contained a link to the defendants' apartment-guide website. Id. Similarly, in Planned Parenthood Federation of America, Inc. v. Bucci, the plaintift owned the "Planned Parenthood mark, but the defendant registered the domain name plannedparenthood.com. 42 U.S.P.Q.2D (BNA) 1430 (S.D.N.Y. 1997). Using the domnin name, the defendant created a website containing information antithetical to the plaintitt's views. 42 U.S.P.Q.2D (BNA) at 1435. The court ruled that the defendant used the plaintift's mark "in connection with" the distribution of services because it is likely to prevent some Internet users from reaching plaintiffs own Internet web site. Prospective users of plaintift's services who mistakenly access defendant's web site may fail to contínue to search for plaintiff's own home page, due to anger, frustration, or the belief that plain tiff's home page does not exist. Id. The same reasoning applies here. As the district court explained, Doughney's use of PETA's Mark in the domain name of his website is likely to prevent Internet users from reaching[PETA's] own internet web site. The prospective users of (PETA's) services who mistakenly access Defendant's web site may fail to continue to search for (PETA's] own home page, due to anger, frustration, or the belief that [PETA's] home page does not exist. Doughney, 113 F. Supp. 2d at 919 (quoting Bucci, 42 U.S.P.Q.2D (BNA) at 1435). Moreover, Doughneys web site provides links to more than 30 commercial operations offering goods and services. By providing links to these commercial operations, Doughney's use of PETA's Mark is "in connection with" the sale of goods or services. 2. The unauthorized use of a trademark infringes the trademark hoider's rights if it is likely to confuse an "ordinary consumer" as to the source or sponsorship of the goods. Anheuser-Busch, Inc. v. L&l. Wings, Inc., 962 F.2d 316, 318 (4th Cir, 1992) (citing 2 J. McCarthy, Trademarks and Unfair Competition § 23:28 (2d cd. 1984)). To determine whether a likelihood of confusion exists, a court should not consider "how closely a fragment of a given use duplicates the trademark," but must instead consider "whether the use in its entirety creates a likelihood of confusion." Id. at 319. Doughney does not dispute that the peta.org domain name engenders a likelihood of confusion between his web site and PETA. Doughney claims, though, that the inquiry should not end with his domain name. Rather, he urges the Court to consider his website in conjunction with the domain name because, together, they purportedly parody PETA and, thus, do not cause a likelihood of confusion. A "parody" is defined as a "simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark's owner." L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 34 (1st Cir. 1987). A parody must "convey two simultaneous -- andcontradictory -- messages: that it is the original, but also that it is not the original and is instead a parody." Clifts Notes, Inc. v. Bantam Doubleday Dell Publ. Group, Inc., 886 F.2d 490, 494 (2d Cir. 1989) (emphasis in original). To the extent that an alleged parody conveys only the first message, "it is not only a poor parody but also vulnerable under trademark law, since the customer will be confused." Id. While a parody necessarily must engender some initial confusion, an effoctive parody will diminish the risk of consumer confusion "by conveying [onlyl just enough of the original design to allow the consumer to appreciate the point of parody." Jordache Enterprises, Inc. v. Hogg Wyld, Ltd, 828 F.2d 1482, 1486 (10th Cir. 1987). Looking at Doughney's domain name alone, there is no suggestion of a parody. The domain name peta.org simply copies PETA's Mark, conveying the message that it is related to PETA. The domain name does not convey the second, contradictory message neoded to establish a parody - a message that the domain name is not related to PETA, but that it is a parody of PBTA. Doughney claims that this second message can be found in the coutent of his website. Indeed, the website's content makes it clear that it is not related to PETA. However, this second message is not conveyed simultancously with the first message, as required to be considered a parody. The domain name conveys the first message; the second message is conveyed only when the viewer reads the content of the website. As the district court explained, "an internet user would not realize that they were not on an official PETA web site until after they had used PETA's Mark to access the web page'www.peta.org.* Doughney, 113 F. Supp. 2d at 921, Thus, the messages are not conveyed simultancously and do not constitute a parody. See also Morrison & Foerster LLP v. Wick, 94 F. Supp. 2d 1125 (D. Co. 2000) (defendant's use of plaintiffs' mark in domain name "does not convey two simultaneous and contradictory messages" because "only by reading through the content of the sites could the user discover that the domain names are an attempt at parody*); Bucci, 42 U.S.P.Q.2D (BNA) at 1435 (rejecting parody defense because "seeing or typing the planned parenthood mark and accessing the web site are two separate and nonsimultaneous activities*). The district court properly rejocted Doughney's parody defense and found that Doughney's use of the peta.org domain name engenders a likelihood of confusion. Accordingly, Doughney failed to raise a genuine issue of material fact regarding PETA's infringement and unfair competition claims. B. Anticybersquatting Consumer Protection Act The district court found Doughney liable under the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d)(1)(A). To establish an ACPA violation, PETA was roquired to (1) prove that Doughney had a bad faith intent to protit from using the peta.org domain name, and (2) that the peta.org domain name is identical or confusingly similar to, or dilutive of, the distinctive and famous PETA Mark. 15 U.S.C. § 1125(dK 1XA). Doughney makes several arguments relating to the district court's ACPA holding: (1) that PETA did not plead an ACPA claim, but raised it for the first time in its motion for summary judgment; (2) that the ACPA, which became effective in 1999, cannot be applied retroactively to events that occurred in 1995 and 1996; (3) that Doughney did not seek to financially profit from his use of PETA's Mark; and (4) that Doughney acted in good faith. None of Doughney's arguments are availing, First, PETA raisod its ACPA claim for the first time in its summary judgment briefs. Doughney objected, noting that PETA failed to plead the claim in its complaint and failed to seek leave to amend to do so. Doughney also vigorously defended against the claim. PETA acknowledged below that it did not plead the claim, but "respectfully requested" in its summary judgment reply brief "that the district Court apply the [the ACPA] to the case at bar[.]" Nothing in the record suggests that the district court entered an order amending PETA's complaint to include an ACPA claim. However, the district court appears to have ruled on PETA's informal motion, listing the ACPA in its summary judgment order as one of the claims on which PETA seeks suminary judgment and rendering judgment as to that claim.