Cable News Network L.P., L.L.L.P. v. Cnnews.Com

• Decision Date: 18 September 2001
• Docket Number: No. Civ.A. 00-2022-A.,Civ.A. 00-2022-A.
• Citation: 162 F.Supp.2d 484
• Court: U.S. District Court — Eastern District of Virginia
• Parties: CABLE NEWS NETWORK L.P., L.L.L.P., Plaintiff, v. CNNEWS.COM, Defendant.

162 F.Supp.2d 484

CABLE NEWS NETWORK L.P., L.L.L.P., Plaintiff, v. CNNEWS.COM, Defendant.

No. Civ.A. 00-2022-A.

United States District Court, E.D. Virginia, Alexandria Division.

September 18, 2001.

Janis R. Orfe, The Law Offices of Janis Orfe, P.C., Fairfax, VA, for plaintiff.

Paul Edward Dietze, Pennie & Edmonds, Washington, D.C., for defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

At issue on a threshold dismissal motion in this in rem action brought under the Anticybersquatting Consumer Protection Act¹ ("ACPA") are the following questions:

(1) Does an ACPA in rem action comport with due process where, as here, the registry is located in this jurisdiction but the absent registrant is a Chinese entity that has no minimal contacts with any state in the United States and uses the infringing domain name in connection with a website that is wholly in the Chinese language and directed to persons in China?

(2) Is a showing of bad faith a jurisdictional requirement for maintaining an ACPA in rem action?

(3) Does Rule 19(b), Fed.R.Civ.P., require a plaintiff in an ACPA in rem action to join parties claiming an interest in the allegedly infringing domain name?

(4) Does a plaintiff properly effect service of process in an ACPA in rem action where, as here, it has published notice of the action in accordance with a court order and has sent notice of the matter to the registrant of the domain name at the address the registrant provided to the registrar?

I.

Plaintiff, Cable News Network L.P., L.L.L.P., is a Delaware limited liability limited partnership with its principal place of business in Atlanta, Georgia. It is engaged in the business of providing news and information services throughout the world via a variety of electronic media. It is also the owner of the trademark "CNN," which plaintiff has registered in this country² and dozens of others, including China. Since at least 1980, plaintiff has used its registered CNN trademark in connection with providing news and information services to people worldwide through a variety of cable and satellite television networks, private networks, radio networks, websites, and syndicated news services. Some of these services are accessible in China and provided in the Chinese language. Since adopting the CNN mark, plaintiff has used the mark "CNN" in the names of all of its broadcast networks, the best known of which include CNN Headline News, CNN En Espanol, CNNSI, CNNFN, and CNN International. Plaintiff's services are also accessible worldwide via the internet at the domain name "cnn.com." There can be no doubt that plaintiff's CNN mark is famous.³

Maya Online Broadband Network (HK) Co. Ltd. ("Maya") is a Chinese company that is a subsidiary of a second Chinese company, Shanghai Online Broadband Network Co. Ltd. On November 12, 1999, Maya's general manager, Heyu Wang, registered the domain name "cnnews.com" with Network Solutions, Inc. ("NSI"), a domain name registrar and registry,⁴ located in Herndon, Virginia.⁵

Maya operates the cnnews.com website, which is designed to provide news and information to Chinese-speaking individuals worldwide. This website is part of Maya's comprehensive on-line services system that includes video on demand, broadband services, and a variety of e-business services. The cnnews.com website is one of many sites linked to Maya's main website, cnmaya.com.⁶ The "cn" prefix apparently refers to "China," where the characters "cn" are widely used and understood as an abbreviation for the country name "China." The top level internet domain for China is "cn."⁷ Given this, Maya, the respondent in this action,⁸ asserts that its choice of the domain name cnnews.com was entirely reasonable and that it did not select or use this domain name in bad faith. And Maya further points out that most people who access the cnnews.com website in China likely have never heard of CNN, as most Chinese citizens lack access to plaintiff's television stations and websites.

Maya asserts that the target audience of its online services, including cnnews.com, is located entirely within China. Maya also asserts that it does not advertise any of its services outside of China, sells no products or services to persons outside of China, does not ship goods outside of China, or accept payments from any source outside of China. In confirmation of these assertions, Maya proffers statistics reflecting that 99.5% of the registered users of Maya's websites are located within Chinese cities. It appears, moreover, that all of Maya's business is conducted in the Chinese language and that it transacts no business in the United States.

Plaintiff acted promptly on discovering that Wang had registered the cnnews.com domain name with NSI and that Maya had posted news information on that site. First, plaintiff notified Wang of its service mark rights and demanded that he transfer the domain name cnnews.com to plaintiff. Plaintiff also warned that it would pursue an ACPA in rem action in the Eastern District of Virginia to acquire control over the cnnews.com domain name if he failed to comply. Maya responded to plaintiff's communications with Wang, indicating that it did not intend to comply with plaintiff's demands. Next, plaintiff suggested that Maya change the domain name of its news website to "cn-news.com" and use the new domain name only in Chinese characters. Maya rejected this proposal and plaintiff subsequently filed this complaint.

With respect to service of process, plaintiff filed a motion seeking a waiver of the ACPA's requirement for service by publication⁹ on the ground that Maya already had received actual notice of this action. This motion was denied. Plaintiff, however, served a copy of this motion on the attorney for Maya and Wang. Although the attorney responded that he lacked authority to accept service of process on behalf of Maya or Wang, he sent plaintiff a copy of the WHOIS record¹⁰ for the cnnews.com domain name, which listed the address of Maya and Wang. The WHOIS record also revealed that after this controversy had arisen, but before plaintiff filed its complaint, Wang had changed the registrar for the cnnews. com domain name from NSI to Eastern Communications Company Limited ("Eastcom"), a Chinese registrar. Notwithstanding this change of registrars, Verisign continues to be the registry for the cnnews.com domain name, as it is for all ".com" websites.¹¹ Additionally, plaintiff learned that Wang had also changed the registrant of the domain name from himself to Maya, but kept himself as the administrative contact.

After filing its amended complaint,¹² plaintiff sent a copy of this complaint by e-mail and FedEx to Maya and Wang at the contact address listed in the WHOIS record. The FedEx package was returned as undeliverable because neither Maya nor Wang was found at the WHOIS address. Given the denial of a waiver of service by publication, plaintiff filed a motion requesting permission to serve process by publication pursuant to 15 U.S.C. § 1125(d)(2)(B). Plaintiff attempted to serve a copy of this motion on Maya and Wang by e-mail and FedEx. Neither Maya nor Wang filed an opposition to plaintiff's motion, and the motion was granted. Plaintiff thereafter completed service by publication by printing notice of the action for five consecutive days in Chinese, in the Hong Kong newspapers Sing Tao and Apple Daily, and in English, in the Hong Kong newspaper South China Morning Post.

During the course of this litigation, Eastcom, the current registrar for the cnnews.com domain name, and Verisign, the registry, agreed to transfer control of the cnnews.com domain name to this Court by depositing a registrar certificate for the cnnews.com domain name with the Court, as the ACPA requires. See 15 U.S.C. § 1125(d)(2)(D). This Certificate, by its terms, "tenders to the Court complete control and authority over the registration for the cnnews.com domain name registration record."

Maya's dismissal motion advances four arguments. Specifically, Maya argues that dismissal is required because

(i) the ACPA's in rem provisions, if applicable here, do not provide a constitutionally permissible basis for jurisdiction;

(ii) bad faith is a jurisdictional element of an ACPA in rem action that plaintiff has failed to plead and prove;

(iii) plaintiff has failed to join Maya as an indispensable party as required by Rule 19(b), Fed.R.Civ.P.; and

(iv) plaintiff's service of process is fatally defective.

For the reasons that follow, these arguments fail.

II.

At the outset, it is necessary to confirm that this action meets the ACPA criteria for an in rem action. These criteria, found in 15 U.S.C. § 1125(d)(2)(A), make clear that the owner of a mark, like plaintiff, may maintain an in rem action against an infringing domain name (i) if the action is brought in the jurisdiction where the registrar or registry of the infringing domain name is located,¹³ and (ii) if in personam jurisdiction over the registrant does not exist.¹⁴ This action fits squarely within these criteria.¹⁵ The registry for the allegedly infringing domain name is located in this jurisdiction and it is clear on this record that there is no in personam jurisdiction over Wang or Maya, the former and current registrants of cnnews.com.¹⁶ Thus, in rem jurisdiction is proper.

But the analysis cannot end here, for if it is clear that this action meets the ACPA criteria for an in rem action against a domain name, it is less clear that such an action comports with due process in light of Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). Put another way, the question is whether judicial disposition of an absent registrant's substantive rights to an infringing domain name in an ACPA in rem action is consistent with due process.

III.

More than twenty years ago, the Supreme Court, in a close and controversial decision, cast doubt on the constitutionality of certain in rem proceedings. See ...