Mattel, Inc. v. Barbie-Club.Com, Docket No. 01-7680.

Citation310 F.3d 293
Decision Date07 November 2002
Docket NumberDocket No. 01-7680.
PartiesMATTEL, INC., Plaintiff-Appellant, v. BARBIE-CLUB.COM, Barbie21.Com, Barbieborza.Com, Barbiedoll-A.Com, Barbiegallery.Com, Barbiej.Com, Barbiepchome.Com, Barbiesecrets.Com, Captainbarbie.Com, Missbarbie.Com, Princessbarbie.Com, Quierokillerbarbies.Com, Quierobarbie.Com, Thebarbie.Com, Thebarbys.Com, Casinohotwheel.Com, Casinohotwheels.Com, Hotwheelcasino.Com, Hotwheelscasino.Com, Thehotwheelcasino.Com, Hotwheelscafe.Com, Hotwheelscanada.Com, Hotwheelshome.Com, Hotwheelspchome.Com, Hotwheelsusa.Com, Hotwheelsweb.Com, Ourhotwheels.Com, Coolhotwheels.Com, Ilovehotwheels.Com, Ihotwheels.Com, Hotwheelswanted.Com, Buymatchbox.Com, Coolmatchbox.Com, Ilovematchbox.Com, Imatchbox.Com, Matchboxintros.Com, Matchboxonline.Com, Ourmatchbox.Com, Mymatchbox.Com, Matellsoftware.Com, Matellsoftware.Net, Matellsoftware.Org, Mattels.Com, Mattle.Net, Mastertheuniverse.Com, See-And-See. Com, Seensay.Net, Seensee.Net, Tycoltd.Com, Viewermaster.Com, Viewmasters.Net, Barbie21century.Com, and Mattle.Com, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

William Dunnegan, Perkins & Dunnegan, New York, NY, for Plaintiff-Appellant.

Michael Aschen, Abelman, Frayne & Schwab, New York, NY, for Defendant-Appellee captainbarbie.com.

Before CABRANES, STRAUB, and SOTOMAYOR, Circuit Judges.

SOTOMAYOR, Circuit Judge.

Plaintiff Mattel, Inc. ("Mattel") appeals from orders entered by the United States District Court for the Southern District of New York (Cote, J.) on May 2 and May 17, 2001, dismissing Mattel's claims against the defendant domain names (collectively, the "Domain Names") for lack of in rem jurisdiction under the Anticybersquatting Consumer Protection Act of 1999 ("ACPA"), 15 U.S.C. § 1125(d). We affirm, holding that (1) subsection (d)(2)(A) of the ACPA provides for in rem jurisdiction only in the judicial district in which the registrar, registry, or other domain-name authority that registered or assigned the disputed domain name is located, and (2) subsection (d)(2)(C) does not provide an additional basis for in rem jurisdiction.

BACKGROUND
I. Facts

The underlying facts are not in dispute. Mattel owns registered trademark rights to "Barbie," "Hot Wheels," and other well-known marks. To protect these marks against allegedly unlawful domain-name registration and use, Mattel filed this in rem action against the Domain Names in the Southern District of New York on November 15, 2000, seeking cancellation or transfer of the Domain Names under the ACPA, 15 U.S.C. § 1125(d).1 The Domain Names are fifty-seven Internet addresses that were registered with domain-name registrars in the United States by various persons or entities over which Mattel alleged that it could not obtain personal jurisdiction. Because Mattel could not sue in personam, it sought to avail itself of the in rem provisions of the ACPA, which permit the owner of a mark to bring suit directly against a domain name that "violates any right of the owner of a mark registered in the Patent and Trademark Office, or protected under subsection (a) or (c) of this section." 15 U.S.C. § 1125(d)(2)(A)(i).

A domain name is a unique string of characters or numbers that typically is used to designate and permit access to an Internet website. See Sporty's Farm L.L.C. v. Sportsman's Market, Inc., 202 F.3d 489, 492-93 (2d Cir.2000). The widespread use of domain names in recent years has been accompanied by a phenomenon known as "cybersquatting," which involves

the registration as domain names of well-known trademarks by non-trademark holders who then try to sell the names back to the trademark owners. Since domain name registrars do not check to see whether a domain name request is related to existing trademarks, it has been simple and inexpensive for any person to register as domain names the marks of established companies. This prevents use of the domain name by the mark owners, who not infrequently have been willing to pay "ransom" in order to get "their names" back.

Id. at 493 (citing H.R.Rep. No. 106-412, at 5-7 (1999); S.Rep. No. 106-140, at 4-7 (1999)). In order to combat such bad-faith registration or use of domain names, Congress enacted the ACPA as a supplement to the federal trademark statute. The ACPA applies to all domain names registered before, on, or after the date of enactment, November 29, 1999. Pub.L. No. 106-113 tit. III § 3010, 113 Stat. 1501, 1501A-552 (1999).

Defendant-appellee captainbarbie.com ("captainbarbie.com") — the only defendant to submit a brief on this appeal — is typical of the Domain Names. Captainbarbie.com is registered with Bulkregister.com, a domain-name registrar2 with offices in Baltimore, Maryland.3 Most of the other domain names were registered with domain-name authorities in Maryland, Virginia, or California. Four of the Domain Names (matellsoftware.com, matellsoftware.net, matellsoftware.org, and masteroftheuniverse.com) were registered with Register.com, a registrar with its principal office in New York City, within the Southern District of New York.

Shortly after filing this action in the Southern District, Mattel arranged to have "registrar's certificates" for each of the Domain Names sent by their respective domain-name authorities and deposited with the district court. Under the ACPA, a registrar's certificate is understood to constitute a "document[] sufficient to establish [a district court's] control and authority regarding ... the use of the domain name." 15 U.S.C. § 1125(d)(2)(C)(ii). Depositing such documentation with the district court also serves to signify, in the manner of interpleader, the registrar's disinterested surrender of the disputed property to the adjudicative authority of the court. See id. § 1125(d)(2)(D); see also FleetBoston Fin. Corp. v. Fleetbostonfinancial.com, 138 F.Supp.2d 121, 126 (D.Mass.2001) ("[I]t appears the deposit of registration documents was designed to relieve registration authorities of the burdens of appearing in domain name dispute litigation by formalizing a procedure through which those authorities can simply deposit the disputed intangible in a manner not unlike interpleader.").

II. The Proceedings Below
A. The Preliminary Conference

The proceedings below were complicated by an unfortunate but ultimately innocuous confusion of terminology between "subject matter jurisdiction" and "in rem jurisdiction." The confusion was initiated by counsel for captainbarbie.com at the preliminary conference held on March 30, 2001, when counsel raised a "concern ... about the subject matter jurisdiction of the court" and then proceeded to argue that Mattel's broad interpretation of § 1125(d) (the in rem jurisdiction provision) was an incorrect invocation of the "subject matter jurisdiction [sic] of the court." Both parties as well as the court continued to refer to "subject matter jurisdiction" instead of "in rem jurisdiction" throughout the conference.

The record shows that, muddled as their terminology was, the parties and the court essentially understood the substance of the two concepts. Although the district judge announced that it thought to satisfy itself as to the "issue of subject matter jurisdiction," the judge plainly meant that Mattel should address the specific issues regarding in rem jurisdiction that captainbarbie.com had raised. Complying with the judge's request with studied literalness while ignoring her manifest intention, Mattel submitted a brief demonstrating that the ACPA conferred federal-question subject matter jurisdiction on the court. After receiving captainbarbie.com's response brief, which substantively addressed the issue of in rem jurisdiction, the district court dismissed the case for lack of "in rem jurisdiction under 15 U.S.C. § 1125(d)." Mattel, Inc. v. Barbie-Club. Com, No. 00 Civ. 8705, 2001 WL 436207, at *3 (S.D.N.Y. May 1, 2001). Mattel neither sought to file a further brief in reply to captainbarbie.com's response brief nor moved for reconsideration or reargument on the issue of in rem jurisdiction. In a post-opinion brief responding to specific questions posed by the court, Mattel did not challenge the court's disposition of the jurisdictional question and made no mention of being surprised that in rem jurisdiction rather than subject matter jurisdiction was the ground of dismissal.

B. The District Court Decision

The district court's opinion, which states that captainbarbie.com "has raised the issue of whether this Court has subject matter jurisdiction over this in rem action,"4 Mattel, Inc., 2001 WL 436207, at *1, analyzes in rem jurisdiction under the ACPA and concludes by dismissing the action because "this Court lacks in rem jurisdiction under 15 U.S.C. § 1125(d) over defendant captainbarbie.com, and all other defendants in this action that do not have a domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name located within this district."5 Id. at *3.

The district court reached this conclusion by determining that: (1) § 1125(d)(2)(A) of the ACPA does not allow in rem jurisdiction "except in the judicial district in which the domain name registry, registrar, or other domain name authority is located"; (2) § 1125(d)(2)(C), which Mattel argued provides an additional basis for in rem jurisdiction in any other judicial district where a registrar's certificate or similar documentation has been deposited with the court, exists simply "to facilitate the continuation of litigation in one of the districts identified in subparagraph (2)(A)"; and (3) interpreting § 1125(d)(2)(C) as a basis for in rem jurisdiction "would run afoul of the due process clause of the Fifth Amendment of the United States Constitution." Mattel, Inc., 2001 WL 436207, at *2 (quoting FleetBoston, 138 F.Supp.2d at 125, 129, 135).

The district court dismissed the action in orders entered on May 2 and May 17, 2001. This...

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