Bulbs 4 E. Side, Inc. v. Ricks

• Decision Date: 10 August 2016
• Docket Number: CIVIL ACTION NO. 4:14-CV-3672
• Citation: 199 F.Supp.3d 1151
• Parties: BULBS 4 EAST SIDE, INC. ; dba Just Bulbs, Plaintiffs, v. Gregory RICKS, et al, Defendants.
• Court: U.S. District Court — Southern District of Texas

199 F.Supp.3d 1151

BULBS 4 EAST SIDE, INC. ; dba Just Bulbs, Plaintiffs,

v.Gregory RICKS, et al, Defendants.

CIVIL ACTION NO. 4:14-CV-3672

United States District Court, S.D. Texas, Houston Division.

Signed August 10, 2016

Mark Samuel Kaufman, Kaufman Kahn LLP, New York, NY, Monica Fitzgerald Oathout, Vorys Sater Seymour and Pease, LLP, Houston, TX, for Plaintiffs.

Zachary R. Hiller, Zachary Hiller, Attorney at Law, Houston, TX, for Defendants.

ORDER AND OPINION

MELINDA HARMON, UNITED STATES DISTRICT JUDGE

Before the Court are Plaintiff's Motion for Summary Judgment (Document No. 26), Defendant's Motion for Summary Judgment (Document No. 33), and the parties' responses and replies (Document Nos. 35, 36, 37). Having considered these filings, the facts in the record, and the applicable law, the Court concludes that both Motions will be granted in part and denied in part.

Background

Plaintiff Bulbs 4 East Side Inc., d/b/a Just Bulbs ("Just Bulbs" or "Plaintiff") is a "leading supplier of light bulbs of all shapes and sizes." (Document No. 1 at 1). Just Bulbs¹ is currently operated by David Brooks ("Brooks") and it "owns, and has used for more than 34 years [since 1983], the federally registered service mark JUST BULBS in connection with its retail services." (Document No. 26 at 2, 5). Plaintiff registered and used the domain name www.justbulbs.com(the "Domain Name") from 1998 to 2003. Id. at 9. However, Plaintiff could not renew the Domain Name in 2003 due to issues with its registrar, AT&T, and so let the Domain Name expire, planning to re-purchase it the next day. Id. at 9-10. When Plaintiff attempted to re-purchase the Domain Name, Plaintiff discovered that Defendant Gregory Ricks² ("Ricks" or "Defendant") had purchased it, and was using it in connection with light bulbs. Id. Under Defendant's ownership, entering the Domain Name takes consumers to a website that "provides advertising and hyperlinks to other retailers selling light bulbs." Id. Defendant is paid when consumers click on these ads. Id. Plaintiff alleges that Defendant "is a serial cybersquatter who has registered or purchased (that is, obtained after someone else initially registered) between 5,000 and 10,000 domain names" and that Defendant "has been a party to at least 17 federal lawsuits (the vast majority of which resulted in his transferring the disputed domain names to the complainant) and 20 domain name arbitrations alleging trademark infringement and cybersquatting against him." Id. at 2.

In its Complaint, Plaintiff details its attempts, prior to this lawsuit, to retain the domain name. Plaintiff filed two unsuccessful complaints against Defendant with the World Intellectual Property Organization ("WIPO"). In 2003, Plaintiff's predecessor-in-interest³ filed the first complaint, Superiority. Inc. d/b/a Just Bulbs v. none/Motherboards.com [controlled by Ricks], WIPO Case No. D2003-049I ("Superiority "), "in accordance with the Uniform Domain Name Dispute Resolution Policy (the "Policy"), approved by the Internet Corporation for Assigned Names and Numbers ("ICANN")." (Document No. 1 at 3). However the WIPO panel denied the complaint:

13. [ ] The panel found that plaintiff had not proven that the respondent lacked legitimate interests in respect of the Domain Name, because although the respondent initially was selling light bulbs, it used "Just Bulbs" in its descriptive sense and there was no evidence that, at the time of the Domain Name registration, the respondent was aware of the plaintiff's JUST BULBS service mark. The panel in the Superiority case also noted that the respondent there "evinced good faith by removing light bulb advertisements from its site subsequent to being notified of the dispute" and commencing to advertise flower bulbs at the website. Accordingly, the panel held, "Respondent has a legitimate interest in using the domain name for flower bulbs."

14. The panel in Superiority further observed that "this is not a case where Respondent is deliberately benefitting from the use of the trademark meaning of JUST BULBS by funneling traffic to its site," and therefore concluded as follows: "Since Respondent has represented that it will not resume advertising light bulbs, Respondent's use of the domain name as a portal for customers interested in flower bulbs is sufficient to demonstrate a legitimate interest and a bona fide use of the domain name."

Id. at 3-4. Ten years later, in 2013, Plaintiff filed another complaint against Defendant, WIPO Case No. D2013-1779, due to new information, including the fact that Defendant was again using the site to advertise lightbulbs, rather than flower bulbs:

17. In the second WIPO complaint, plaintiff argued that defendant engaged in bad faith as shown by the following:

(a) Defendant Gregory Ricks ceased using JUST BULBS for flower bulbs (a central fact in the Superiority decision) and has been using JUST BULBS for light bulbs (the same goods and services that are the subject of plaintiff's registered trademark);

(b) At the time it commenced use of the Domain Name for plaintiff's goods, defendant Ricks knew of plaintiff's trademark, goods and services from having participated in the Superiority case, but chose to use the Domain Name in connection with goods and services identical to plaintiff's;

(c) Defendant Ricks effectively re-registered the Domain Name because during the pendency of the Superiority case he moved the Domain Name registration from one privacy or proxy service (Namesecure.com) to another (Internet.bs Corp.); and

(d) At that time, defendant Ricks repeatedly engaged, over the course of the eleven years ensuing since the Superiority case, in similarly moving domain name registration from one privacy or proxy service to another, as set forth in no less than 148 WIPO UDRP cases in which he was the respondent.

18. The WIPO panel in the second case denied the complaint. It held that defendant's movement from one privacy/proxy service to another did not result in a "new" registration because the record otherwise showed that the same party maintained the ownership of the Domain Name registration.

19. Thus, the WIPO panel limited its inquiry, pursuant to the ICANN Policy, to whether the domain name was registered in bad faith; determined that defendant's initial registration of the Domain Name was not in bad faith, as set forth in the Superiority case; and rejected plaintiff's UDRP complaint.

20. However, the WIPO panel in the second decision held that "Respondent is now using the Domain Name in bad faith, since today Respondent is clearly aware of Complainant's mark [from arbitration of the Superiority case]."

Id. at 4-5. In denying the second complaint, the panel suggested that Plaintiff seek its relief elsewhere, as it was not "the appropriate vehicle" for resolving the dispute. Id. at 5. Therefore, Plaintiff filed this suit, alleging (1) infringement of federally registered trademarks, pursuant to 15 U.S.C. § 1114(2) violations of Federal Trademark and Unfair Competition Law, 15 U.S.C. § 1125(a)(3) violations of the Federal Anti-Dilution Law, 15 U.S.C. § 1125(c)(4) violations of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)(5) injury to business reputation or trade name under Texas Business & Commerce Code § 16.29, and (6) trademark infringement and unfair competition under Texas common law. Id. at 9-13.

Standard of Review

Summary judgment under Federal Rule of Civil Procedure 56(c) is appropriate when, viewing the evidence in the light most favorable to the nonmovant, the court determines that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, 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." A dispute of material fact is "genuine" if the evidence would allow a reasonable jury to find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In a trademark case, "[a]lthough the secondary meaning of a mark and the likelihood of confusion are ordinarily questions of fact, summary judgment may be upheld if the summary judgment record compels the conclusion that the movant is entitled to judgment as a matter of law." Bd. of Supervisors for Louisiana State Univ. Agric. & Mech. Coll. v. Smack Apparel Co. , 550 F.3d 465, 474 (5th Cir.2008) (internal citations omitted) (hereinafter " Smack Apparel ").

Analysis

Federal Trademark Infringement

"To recover on a claim of trademark infringement, a plaintiff must first show that the mark is legally protectable and must then establish infringement by showing a likelihood of confusion." Am. Rice, Inc. v. Producers Rice Mill, Inc. , 518 F.3d 321, 329 (5th Cir.2008).

Legally protectable mark

Plaintiff registered the Just Bulbs mark on April 12, 1983. (Document No. 1, Exhibit A at 1). This registration is "admissible in evidence" and is "prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the registration subject to any conditions or limitations stated therein." 15 U.S.C. § 1115. However, Plaintiff's registration "shall not preclude another person from proving any legal or equitable defense or defect" in its registration. Id.

In addition to the registration of the mark, Plaintiff argues that the mark has become incontestable pursuant to 15 U.S.C. § 1065. Section 1065 states that "the right of the owner to use such registered mark in commerce for the goods or services on or in connection with which such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce, shall be incontestable." 15 U.S.C. § 1065. Plaintiff has demonstrated that "Just Bulbs has...