IP Law Daily, TRADEMARK—D. Col.: Domain name register’s reserve domain-name hijacking claims can proceed against IDEACITY mark holder, (Jun 8, 2023)

By Anne H. Gibson, J.D., LL.M.

Owner of IDEACITY registration had previously won UDRP arbitration case in Canada against registrant of IDEACITY.COM domain name.

A domain name registration company’s allegations of reverse domain name hijacking against a trademark holder can proceed, the federal district court in Denver has held. Mira Holdings, Inc., the registrant of the domain name “IDEACITY.COM,” filed a complaint against the holder of the trademark for IDEACITY, seeking declaratory relief, injunctive relief, and statutory damages, under the Anti-Cybersquatting Consumer Protection Act and the Lanham Act. The trademark holder, ZoomerMedia Ltd., had previously won an arbitration complaint against Mira in Canada, under which Mira was ordered to transfer IDEACITY.COM to ZoomerMedia. ZoomerMedia brought a motion to dismiss Mira’s claims, which the court granted in part and denied in part (Mira Holdings, Inc. v. ZoomerMedia, Ltd., June 7, 2023, Brimmer, P.).

Mira Holdings, Inc. (“Mira”) is a Minnesota-based company that registers generic domain names to sell and lease, and to use in offering email services. On December 14, 2019, Mira purchased the domain name “IDEACITY.COM” and registered it. Mira has not used the domain name since then. ZoomerMedia Ltd. (“ZoomerMedia”) is a Canadian company. It owns a Class 41 U.S. trademark registration for “IDEACITY,” limited to “educational services.”

On June 8, 2022, ZoomerMedia filed a complaint against Mira with the Canadian International Internet Dispute Resolution Centre (“CIIRDC”) regarding IDEACITY.COM in accordance with the Uniform Domain Name Dispute Resolution Policy (“UDRP”). As a consequence, Mira’s access to IDEACITY.COM was locked. The CIIDRC found in favor of ZoomerMedia and ordered the IDEACITY.COM domain name to be transferred to it.

Mira filed a complaint against ZoomerMedia, seeking injunctive relief and statutory damages under the Anti-Cybersquatting Consumer Protection Act (“ACPA”) and declaratory relief under ACPA and the Lanham Act. ZoomerMedia filed a motion to dismiss.

Injunctive relief under ACPA. The court first considered Mira’s claim for injunctive relief under ACPA section 1114(2)(D)(v). Under this section, a domain name registrant can seek protection from certain actions by “overreaching trademark owners,” to prevent so-called “reverse domain-name hijacking.” In particular, ACPA allows a “domain name registrant whose domain name has been suspended… [to] file a civil action to establish that the registration… of the domain name by such registrant is not unlawful under this chapter.” Injunctive relief granted in such a case can include the reactivation of the domain name and the transfer of the domain name back to the original registrant. To state a claim under this section, Mira needed to show that (1) it had registered the domain name, (2) it was suspended under a policy implemented by a domain name registrar, (3) ZoomerMedia had notice of the action, and (4) Mira’s registration of the domain name was not unlawful.

ZoomerMedia argued that Mira had not shown that its use of IDEACITY.COM was not unlawful. In particular, it argued that Mira had failed to adequately allege that it had not acted with a bad faith intent to profit in registering the domain name. However, the court disagreed. The court noted that Mira alleged that “has never offered to sell IDEACITY.COM to ZoomerMedia,” that ZoomerMedia’s trademark for IDEACITY is in educational services whereas Mira has never used the domain name in that area, and that Mira “‘did not have any intent to divert customers’ from ZoomerMedia’s online sites.” The court found that these allegations were sufficient to allege a lack of bad faith intent to profit, and so Mira had stated a claim under the relevant section of ACPA. ZoomerMedia’s motion to dismiss as to this claim was denied.

Declaratory relief under the Lanham Act and ACPA. Turning to Mira’s claims for declaratory relief, the court first examined an apparent typographical error. Although Mira’s amended complaint contained a caption stating, “Declaratory Relief – 28 U.S.C. § 2201,” the text underneath discussed “15 U.S.C. § 2201.” This section relates to congressional findings on fire hazards. Consequently, the court granted ZoomerMedia’s motion to dismiss as to any claims under 15 U.S.C. § 2201.

Assuming that Mira meant to reference 28 U.S.C. § 2201, the court determined that Mira sought a declaration that its registration and use of IDEACITY.COM did not violate ACPA or the Lanham Act. ZoomerMedia argued that the claim should be dismissed because Mira had failed to allege the existence of an actual controversy under the Lanham Act. The court disagreed. Citing MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), the court noted that the plaintiff in such a case did not need to have a reasonable belief in “an imminent lawsuit to establish an actual controversy.”

In the present case, Mira’s complaint stated that in the arbitration before CIIRDC, ZoomerMedia had argued that “Mira’s use of the domain name ‘create[ed] the possibility of confusion with [ZoomerMedia’s] mark.’” Additionally, Mira stated that it planned to use IDEACITY.COM in the future, but in a different class from ZoomerMedia’s registration for IDEACITY. “The Court finds that these alleged facts show that ‘there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’” Consequently, the court denied ZoomerMedia’s motion to dismiss as to this claim.

Regarding Mira’s claim for declaratory relief under ACPA, however, the court found it to be duplicative of Mira’s claim for injunctive relief. “Courts in this circuit have dismissed declaratory judgment claims ‘where a plaintiff seeks declaratory relief that would resolve the same issues raised by other claims brought in the same action,’” it stated, citing precedent. ZoomerMedia’s motion to dismiss as to this claim was granted.

Statutory damages under ACPA. Finally, Mira sought statutory damages for a violation of the cybersquatting section, section 1125(d)(1), of ACPA by ZoomerMedia. However, Mira did not allege that ZoomerMedia violated that section. The court noted that although it was possible to assert statutory damages for cybersquatting, it was not possible to do so for “reverse domain-name hijacking,” which is what Mira alleged in its injunctive relief claim. Consequently, this claim was dismissed.

ZoomerMedia’s motion to dismiss was thus granted in part and dismissed in part. Mira’s claims for injunctive relief under ACPA and for declaratory relief under the Lanham Act can proceed.

The Case is No. 22-cv-01997-PAB-SP.

Attorneys: Howard M. Neu, Sr. (Law Office of Howard Neu, P.A.) for Mira Holdings, Inc. Case L. Collard (Dorsey & Whitney LLP) for ZoomerMedia, Ltd.

Companies: Mira Holdings, Inc.; ZoomerMedia, Ltd.

Cases: TechnologyInternet Trademark ColoradoNews