Coca-Cola Co. v. Purdy

• Decision Date: 01 September 2004
• Docket Number: No. 02-2894.,No. 03-1795.,No. 03-1929.,02-2894.,03-1795.,03-1929.
• Citation: 382 F.3d 774
• Parties: COCA-COLA COMPANY; McDonald's Corporation; Pepsico, Inc.; The Washington Post Company; Washingtonpost.Newsweek Interactive Company, LLC, Plaintiffs-Appellees, v. William S. PURDY, Sr.; Please Don't Kill Your Baby; Does 1-10, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 774

382 F.3d 774

COCA-COLA COMPANY; McDonald's Corporation; Pepsico, Inc.; The Washington Post Company; Washingtonpost.Newsweek Interactive Company, LLC, Plaintiffs-Appellees, v. William S. PURDY, Sr.; Please Don't Kill Your Baby; Does 1-10, Defendants-Appellants.

No. 02-2894.

No. 03-1795.

No. 03-1929.

United States Court of Appeals, Eighth Circuit.

Submitted: March 12, 2004.

Filed: September 1, 2004.

Appeal from the United States District Court for the District of Minnesota, Ann D. Montgomery, J.

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Counsel who presented argument on behalf of the appellant was James Tarsney, St. Louis Park, MN.

Counsel who presented argument on behalf of the appellee was Thomas P. Olson, Washington, DC.

Before MURPHY, SMITH, and COLLOTON, Circuit Judges.

MURPHY, Circuit Judge.

This case was brought under the Anticybersquatting Consumer Protection Act by the Washington Post Company and its wholly owned subsidiary Washingtonpost.Newsweek Interactive Company, LLC (the Post entities), the Coca-Cola Company, McDonald's Corporation, and PepsiCo, Inc. to stop William S. Purdy¹ from appropriating Internet domain names² that incorporate and are confusingly similar to their trademarks and servicemarks. The district court³ granted preliminary injunctive relief enjoining defendants from registering or using certain domain names and ordering them transferred to their proper owners. Purdy was later found in contempt and fined for violating the injunctions. He appeals from the preliminary injunctions and the contempt orders.

I.

Both the common law and Congress have provided protection to the holders of recognized trademarks to prevent others from appropriating or copying them and taking advantage of the owner's good will for their own benefit. See 1 McCarthy on Trademarks and Unfair Competition § 2:31 (4th ed.) (citing Weinstock, Lubin & Co. v. Marks, 109 Cal. 529, 42 P. 142 (1895); Hugo Stein Cloak Co. v. S.B. Stein & Son, 58 Ohio App. 377, 16 N.E.2d 609 (1937)). Congress enacted the Lanham Act over fifty years ago to protect the value of trademarks by encouraging their registration, see 3 McCarthy § 19:2, and to provide a federal cause of action to prevent their misappropriation, see 15 U.S.C. § 1125. One legislative purpose of that act was to ensure that "where the owner of a trade-mark has spent energy, time, and money in presenting to the public the product, he is protected in his investment from its misappropriation by pirates and cheats." S.Rep. No. 1333, at *3 (1946).

The development of the Internet created new areas of concern, and in 1999 Congress passed the Anticybersquatting Consumer Protection Act (ACPA) in order to prevent misappropriation of trademarks by stopping conduct known as "cybersquatting." See ACPA, Pub.L. No. 106-113, 113 Stat. 1501 (1999) (codified at 15 U.S.C. § 1125(d)). In the ACPA Congress added section 43(d) to the Lanham Act and defined cybersquatting as registering or using with a bad faith intent to profit a domain name that is confusingly similar to a registered or unregistered mark or dilutive of a famous mark. See 15 U.S.C. § 1125(d). See also 4 McCarthy § 25:78. A number of cybersquatting problems prompted Congressional action. There was concern about individuals registering domain names that are similar to famous marks for the purpose of profiting by selling them to the legitimate owners of the marks. See Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 238 (4th Cir.2002). Congress was also aware of individuals attaching obscene or pornographic material to an infringing domain name in order to tarnish the mark. S.Rep. No. 106-140, at *6 (Aug. 5, 1999). Others attempted to divert unsuspecting consumers to their sites in order to engage in unfair competition. Id. Conduct of this sort has been described as the "Internet version of a land grab." Interstellar Starship Servs., Ltd. v. Epix, Inc., 304 F.3d 936, 946 (9th Cir.2002).

The legislative history of the ACPA includes findings that cybersquatters were engaging in consumer fraud and creating public confusion as to the true source or sponsorship of goods and services in a way that would impair electronic commerce, deprive trademark owners of substantial revenues and consumer goodwill, and place overwhelming burdens on trademark owners in protecting their valuable intellectual property. S.Rep. No. 106-140, at *2 (findings). The Senate report included concerns about misleading users of the Internet: "[I]f someone is operating a web site under another brand owner's trademark, such as a site called `cocacola.com' or `levis.com,' consumers bear a significant risk of being deceived and defrauded, or at a minimum, confused." Id. at *5.

Congress enacted the ACPA to provide legal clarity for trademark owners by prohibiting bad faith and abusive registration of distinctive marks as Internet domain names with the intent to profit from their goodwill. Id. at *4. The ACPA was intended to balance the interests of trademark owners against the interests of those who would make fair uses of a mark online, such as for comment, criticism, parody, and news reporting. Id. at *8. Nevertheless, the use of a domain name "in connection with a site that makes a noncommercial or fair use of the mark does not necessarily mean that the domain name registrant lacked bad faith." Id. at *8-9. See also H.R.Rep. No. 106-412, at *11 (1999). To recognize such an exemption would "eviscerate the protections of the bill by suggesting a blueprint for cybersquatters who would simply create criticism sites in order to immunize themselves from liability despite their bad-faith intentions." S.Rep. No. 106-140, at *9. For these reasons Congress gave courts the charge to "weigh the facts of each case and make a determination based on those facts whether or not the defendant registered, trafficked in, or used the domain name with bad-faith intent to profit from the goodwill of the mark of another." Id. at *10.

II.

In early July 2002 Purdy began registering Internet domain names which incorporated distinctive, famous, and protected marks owned by the plaintiffs. The domain names he registered included drinkcoke.org, mycoca-cola.com, mymcdonalds.com, mypepsi.org, and my-washingtonpost.com. The latter name was almost exactly identical to one which the Washington Post had used to operate an interactive online news service (mywashingtonpost.com), the only distinguishing detail being Purdy's addition of a hyphen.

Purdy typically linked the domain names to the website abortionismurder.com which contains antiabortion commentary and graphic images of aborted and dismembered fetuses. It also contains multiple "What Can I Do?" links to a website where a visitor can purchase hats, shirts, neckties, and license plates with antiabortion themes and make donations using a credit card or bank account number. The content available at abortionismurder.com contained no references to plaintiffs, their products, or their alleged positions on abortion.

For several days in early July 2002 Purdy linked the domain names my-washingtonpost.com and drinkcoke.org to a website displaying what appeared to be a front page originating from washingtonpost.com. The page with this format featured the headline "The Washington Post proclaims `Abortion is Murder'" and contained graphic images of aborted fetuses next to Coca-Cola's trademark and the words "Things Don't Always Go Better With Coke. Abortion is Murder—`The Real Thing.'" ("It's the Real Thing" is a registered trademark of the Coca-Cola Company.) Sometime after this litigation began, Purdy also linked many of the domain names to his own websites which contained references to a claim that plaintiffs supported abortion, graphic photos of aborted fetuses, and links to abortionismurder.com.

Counsel for the Washington Post entities sent a cease and desist letter to Purdy on July 8, 2002, and it persuaded his Internet service provider (ISP) to stop hosting the website at my-washingtonpost.com. Counsel for McDonald's and Pepsi contacted Purdy and his domain name registrars with similar requests around this time. During a telephone conversation with counsel for the Post entities on July 8, Purdy acknowledged that he had published a counterfeit front page at my-washingtonpost.com and claimed that his actions were protected by the First Amendment. The record indicates that Purdy offered to comply with the request of the Post entities if they would publish something written by him on the Washington Post editorial page, but they declined.⁴ A few days later Purdy reactivated my-washingtonpost.com with a new ISP and published another counterfeit washingtonpost.com front page with antiabortion headlines and graphic content. He also registered washingtonpost.cc and washingtonpost.ws, linked them to abortionismurder.com, and began using the email address dontkillyourbaby@ washingtonpost.cc.

Although Purdy now claims that he targeted all of the plaintiffs because of stands they had taken in the abortion debate, it appears from the record that he initially used many of the marks only because they would attract unwitting Internet users to his antiabortion message. He wrote to a journalist in a July 16, 2002 email message that the domain names drinkcoke.org, my-coca-cola.com mymcdonalds.com, mypepsi.org, and pepsisays.com were "abortion neutral names being used but not because of any stand they have taken on abortion." He reported that the domain names were then attached to the website abortionismurder.com.

Plaintiffs filed this action on July 18, 2002 and moved for an emergency temporary restraining order and preliminary injunction. A hearing was held on the motion on July 22, at which Purdy appeared pro se and the plaintiffs were represented by counsel. The district court issued an emergency temporary restraining order and preliminary injunction on July 23. The order prohibited Purdy and those acting in...