Harrods Ltd. v. Sixty Internet Domain Names
| Citation | 302 F.3d 214 |
| Decision Date | 23 August 2002 |
| Docket Number | No. 00-2414.,No. 01-1928.,00-2414.,01-1928. |
| Parties | HARRODS LIMITED, Plaintiff-Appellant, v. SIXTY INTERNET DOMAIN NAMES; Harrodsargentina.Com; Harrodsargentina.Net; Harrodsargentina.Org; Harrodsbuenosaires.Com; Harrodsbuenosaires.Net; Harrodsbuenosaires.Org, Defendants-Appellees. Harrods Limited, Plaintiff-Appellee, v. Fifty-Four Internet Names; Harrodssudamerica.Com; Harrodssudamerica.Net; Harrodssudamerica.Org; Harrodssouthamerica.Com; Harrodsouthamerica.Net; Harrodssouthamerica .Org; Harrodsbrasil.Com; Harrodsbrasil.Net; Harrodsbrasil.Org; Harrodsbrazil.Com; Harrodsbrazil.Net; Harrodsbrazil.Org; Ciberharrods.Com; Ciberharrods.Net; Ciberharrods.Org; Cyberharrods.Com; Cyberharrods.Net; Cyberharrods.Org; Harrodsbank.Com; Harrodsbank.Net; Harrodsbank.Org; Harrodsbanking.Com; Harrodsbanking.Net; Harrodsbanking.Org; Harrodsfinancial.Com; Harrodsfinancial.Net; Harrodsfinancial.Org; Harrodsservices.Com; Harrodsservices.Net; Harrodsservices.Org; Harrodsvirtual.Com; Harrodsvirtual.Net; Harrodsvirtual.Org; Harrodsstore.Com; Harrodsstore.Net; Harrodsstore.Org; Tiendaharrods.Com; Tiendaharrods.Net; Tiendaharrods.Org; Harrodsamerica.Com; Harrodsamerica.Net; Harrodsamerica.Org; Shoppingharrods.Com; Shoppingharrods.Net; Shoppingharrods.Org; Harrodsshopping.Com; Harrodsshopping.Net; Harrodsshopping.Org; Harrodsbashopping.Com; 2 Harrodsbashopping.Net; Harrodsbashopping.Org; Harrodsshoppingba.Com; Harrodsshoppingba.Net; Harrodsshoppingba.Org, Defendants-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
ARGUED: Ralph Arthur Taylor, Jr., Dorsey & Whitney, L.L.P., Washington, D.C., for Plaintiffs-Appellants. Susan J. Kohlmann, Pillsbury Winthrop, L.L.P., New York, New York, for Defendants-Appellees. ON BRIEF: Kevin B. Bedell, Dorsey & Whitney, L.L.P., Washington, D.C.; Bruce R. Ewing, Lile H. Deinard, Dorsey & Whitney, L.L.P., New York, New York, for Plaintiffs-Appellants. Rodney H. Glover, Attison L. Barnes, III, Charles C. Lemley, Gardner, Carton & Douglas, Washington, D.C., for Defendants-Appellees.
Before WILKINS and MICHAEL, Circuit Judges, and HAMILTON, Senior Circuit Judge.
Affirmed in part, reversed in part, and remanded by published opinion. Judge MICHAEL wrote the opinion, in which Judge WILKINS and Senior Judge HAMILTON joined.
This case involves a dispute over Internet domain names between two companies named "Harrods," both with legitimate rights to the "Harrods" name in different parts of the world. The plaintiff, Harrods Limited ("Harrods UK"), is the owner of the well-known Harrods of London department store. The defendants are 60 Internet domain names ("Domain Names" or "Names") registered in Herndon, Virginia, by Harrods (Buenos Aires) Limited ("Harrods BA"). Harrods BA, once affiliated with Harrods UK, is now a completely separate corporate entity that until recently operated a "Harrods" department store in Buenos Aires, Argentina. Harrods UK sued the 60 Domain Names under 15 U.S.C. § 1125(d)(2), the in rem provision of the recently enacted Anticybersquatting Consumer Protection Act (ACPA), Pub.L. No. 106-113, 113 Stat. 1501A-545 () (1999). Harrods UK alleged that the Domain Names infringed and diluted its American "Harrods" trademark and that Harrods BA registered the Names in bad faith as prohibited by 15 U.S.C. § 1125(d)(1).1 The district court dismissed the infringement and dilution claims, holding that in rem actions could only be maintained for bad faith registration claims under § 1125(d)(1). As discovery was just beginning, the district court granted summary judgment to six of the Domain Names on Harrods UK's bad faith registration claim. After full discovery and a bench trial, the court awarded judgment to Harrods UK against the remaining 54 Domain Names and ordered those names to be transferred to Harrods UK. Both sides now appeal. For the reasons that follow, we affirm the judgment as to the 54 Domain Names, reverse the dismissal of Harrods UK's infringement and dilution claims, reverse the grant of summary judgment to the six Domain Names, and remand for further proceedings.
Harrods UK and its predecessors have operated a department store named "Harrods" in the Knightsbridge section of London, England, since 1849. In 1912 Harrods UK created a wholly owned subsidiary, Harrods South America Limited, to carry on business in South America. Harrods South America Limited created Harrods BA as an independent company, and in 1914 Harrods BA opened a department store under the name "Harrods" in a new building in downtown Buenos Aires designed to look like Harrods UK's historic London building. Over the following decades Harrods BA registered "Harrods" as a trademark in Argentina, Brazil, Paraguay, Venezuela, and a number of other South American countries. Harrods UK and Harrods BA quickly drifted apart: by the 1920s Harrods BA was operating largely independently of Harrods UK, and the last remaining legal ties between the two companies were severed in 1963.
In the early 1990s Harrods UK and Harrods BA entered into negotiations for Harrods UK to buy Harrods BA's South American trademark rights in the name "Harrods." At one point Harrods UK offered $10 million for the rights, but the parties never reached agreement. Later, in 1995, Harrods UK sued Harrods BA in British court, alleging breach of contract, breach of fiduciary duty, and passing off, all arising from Harrods BA's use of the name "Harrods" in South America.2 The British High Court of Justice, Chancery Division, dismissed the contract and fiduciary duty claims against Harrods BA, and this decision was affirmed in 1998 by the Court of Appeal, Civil Division. Harrods Ltd. v. Harrods (Buenos Aires) Ltd., [1997] F.S.R. 420(Ch.), aff'd, [1999] F.S.R. 187 (C.A.). The Court of Appeal held that Harrods BA had an implied contractual right to carry on business under the name "Harrods" anywhere in South America. Neither British court ruled on the passing off claim because that claim was withdrawn by Harrods UK on the condition that Harrods BA limit its business to South America. Here, we have not been asked to conclusively determine the legitimacy and scope of Harrods BA's rights in the name "Harrods" throughout South America. It appears, however, that Harrods BA has the right to use the name "Harrods" in Argentina and much of South America, and for the limited purposes of this litigation Harrods UK does not attempt to prove otherwise.
Harrods UK, for its part, has exclusive trademark rights in the name "Harrods" in much of the rest of the world, including the United States, where retail catalog and Internet sales generate millions of dollars in revenue each year. Harrods UK's retail business has thrived in recent years, but Harrods BA's business has been in decline since the early 1960s. Over the years, Harrods BA occupied less and less of its large Buenos Aires department store building and leased more and more of the space to other vendors. Some time around 1998 Harrods BA ended its department store operation entirely, and the building now sits vacant. Harrods BA's only current revenue is about $300,000 annually from the continued operation of the building's parking garage.
In February of 1999 Harrods UK launched a website at the domain name harrods.com, and the website became a functioning online retail store in November of 1999. Harrods BA executives testified that sometime in 1999 they also began planning to launch a Harrods store on the Internet. Toward that end, Harrods BA hired a consultant, a Mr. Capuro, to prepare a proposal for an online business. In the fall of 1999, around the same time that Harrods UK was launching its Internet business (and announcing this in the press), Harrods BA began registering the first of what eventually became around 300 Harrods-related domain names. The 60 Domain Names that are defendants in this case were registered with Network Solutions, Inc. (NSI), a domain name registry located in Herndon, Virginia. At that time NSI served as the exclusive worldwide registry for domain names using .com, .net, and .org.3
A brief explanation of the nature and terminology of Internet domain names is warranted before we continue with the details of Harrods BA's domain name registrations. A domain name is the "address" at which a computer user accesses a website on the Internet.4 A typical domain name is www.ca4.uscourts.gov, which is the domain name for the website of the United States Court of Appeals for the Fourth Circuit. Domain names consist of sections of alpha-numeric characters separated by periods, called "dots." These sections are referred to, working from right to left, as the top-level domain, the second-level domain, and so on. The top-level domain is the ending suffix, such as .gov (as in ca4.uscourts.gov) or .com (as in vw. com). The second-level domain is the section just to the left of the top-level domain (in the above examples, uscourts and vw serve as the second-level domains). For obvious reasons, most companies want their primary trademark to serve as their second-level domain, as in vw.com for Volkswagen of America. See Virtual Works, Inc. v. Volkswagen of Am., Inc., 238 F.3d 264 (4th Cir.2001).
Harrods BA registered each of its Harrods-related domain names under the .com, .net., and .org top-level domains. For example, Harrods BA registered the second-level domain harrodsbuenosaires as harrodsbuenosaires.com, harrodsbuenosaires.net, and harrodsbuenosaires.org. This case involves 20 distinct second-level domain names, each registered under the three top-level domains .com, .net, and .org, for a total of 60 defendant Domain Names.5 All told, Harrods BA registered about 300 Harrods-related domain names in the United States. The 20 second-level domain names at issue in this case are...
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