Eurotech v. Cosmos European Aktiengesellschaft

• Citation: 189 F.Supp.2d 385
• Decision Date: 06 March 2002
• Docket Number: No. Civ.A.01-1689-A.,Civ.A.01-1689-A.
• Parties: EUROTECH, INC., et al., Plaintiffs, v. COSMOS EUROPEAN TRAVELS AKTIENGESELLSCHAFT, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

189 F.Supp.2d 385

EUROTECH, INC., et al., Plaintiffs, v. COSMOS EUROPEAN TRAVELS AKTIENGESELLSCHAFT, Defendant.

No. Civ.A.01-1689-A.

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

March 6, 2002.

COPYRIGHT MATERIAL OMITTED

Steven B. Ramsdell, Tyler Bartl Burke & Gorman, P.L.C., Alexandria, VA, for plaintiffs.

John Francis Cahill, Carter Ledyard & Milburn, Washington, DC, Rose Auslander, Carter, Ledyard & Milburn, New York City, for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

After losing to a registered trademark owner in a WIPO infringement proceeding, the owner of the allegedly infringing domain name brought this declaratory judgment suit to avoid having to comply with the WIPO order to transfer the domain name. Among the claims asserted in this suit are abuse of process and tortious interference, both of which are based on the trademark owner's filing and maintenance of the WIPO proceeding. Treated here is whether filing and maintaining a WIPO claim can serve as a basis for claims of abuse of process or tortious interference with prospective economic advantage.

I.

Plaintiff Eurotech, Inc. ("Eurotech"), an Illinois corporation with its principal place of business in Illinois, is a firm that provides consumer and business exchange information and technology services to various businesses. It also has a number of subsidiaries, including co-plaintiff Eurotech Data Systems Hellas, Ltd. ("Hellas"), and owns various domain names, including the domain name here in dispute, "cosmos.com."

Plaintiff, Hellas, a Greek corporation with its principal place of business in Athens, Greece, facilitates global marketing of various products and services for other companies via the Internet. It operates the website located at cosmos.com where it does not directly offer any of the products or services available on its website; it merely permits other companies to use the website to post, manage, and market their own products and services.

Defendant Cosmos European Travels Aktiengesellschaft is a corporation chartered in Liechtenstein that sells and conducts budget vacation packages. Defendant has long made use of the marks "Cosmos" and "Cosmos Tourama" and has registered each in the United States,¹ the United Kingdom, Canada, and Australia for its business of selling and conducting travel tours. Because it has extensively advertised and promoted services relating to its "Cosmos" and "Cosmos Tourama" marks for many years, defendant contends that its marks are famous in the travel industry. Defendant also operates websites located at the domain names "cosmostours.com" and "globusandcosmos.com" for the purpose of promoting its services by providing travel information for travel arrangements of clients and potential clients.

On September 21, 1994, the disputed domain name, cosmos.com, was initially registered with Network Solutions, Inc. (NSI)² by Margaret Young, an individual not affiliated with any of the parties in this dispute. In May 1998, Eurotech purchased the domain name from Young.

The cosmos.com website, now operated by Hellas, contains what Hellas terms an "almanac" of information related almost exclusively to travel. The main web page of the almanac opens directly to a page containing the mark "Cosmos.com Cosmo-travels" and bearing headings for Reservations, Destination Guides, Travel Clubs, Airlines, Hotels, Vacations,

and Cruises. Participating businesses may contract with Hellas, for the right to use the website to advertise and distribute their products and services. Thus, the cosmos.com website contains information provided to Hellas from companies involved in the travel industry, such as hotels and airline providers, as well as general travel information.

In 2001, Hellas contacted Group Voyagers, Inc. (Voyagers), a subsidiary of defendant, to determine if Voyagers, a company involved in the sale of escorted travel tours to customers in the United States, would be interested in using the cosmos.com website to increase its sales and visibility. Dino Matingas, Hellas's President, engaged in numerous telephone discussions with Steen Born, Voyagers's director of marketing, concerning a possible business relationship between the two companies. The parties also exchanged e-mail messages discussing various business arrangements. Plaintiffs allege that Born suggested that Hellas and Voyagers establish a partnership, utilizing the resources of both companies. It is also alleged that Born suggested a link exchange, whereby Hellas would provide a link to Voyagers's website on the cosmos.com website and Voyagers, in turn, would provide a link to cosmos.com from its website. Hellas declined the offer. Voyagers also offered to purchase the cosmos.com domain name from Hellas, but Hellas also declined this offer.

The discussions between Hellas and Voyagers lasted two months, concluding at the end of May 2001. At the request of Born, they were scheduled to resume in September. Hellas alleges that at no time during any of the discussions did Voyagers manifest disapproval of Hellas's using the term "cosmos.com," either as a domain name or as the business name of Hellas.

On July 20, 2001, defendant, the parent company of Voyagers, filed a complaint with the World Intellectual Property Organization (WIPO) in accordance with the Uniform Domain Name Dispute Resolution Policy (UDRP).³ In its WIPO complaint, defendant asserted a claim for trademark infringement based on allegations (i) that defendant had consistently used its registered trademarks "Cosmos" and "Cosmos Tourama;" (ii) that the cosmos.com domain name was identical to its "Cosmos" trademark, and confusingly similar to its "Cosmos Tourama" trademark; and (iii) that plaintiffs used the cosmos.com domain name as an integral part of a travel business that competes directly with defendant's business. Defendant further claimed that Hellas had no rights or legitimate interest in the cosmos.com domain name and that the domain name was registered and used in bad faith. For relief, defendant sought an order transferring the registrar certificate for cosmos.com to defendant.

Defendant also asserted that Hellas offered to sell the cosmos.com domain name to defendant, an allegation Hellas disputed. After Hellas filed its response denying that an offer of sale had been made, defendant was allowed to amend its complaint to reflect this fact. Although the WIPO arbitrator⁴ allowed defendant to amend the complaint, he declined to give Hellas the opportunity to respond to the amended complaint. On the basis of the arbitration record, the arbitrator ruled that the domain name cosmos.com should be transferred to defendant (i) because the domain name cosmos.com was identical or confusingly similar to defendant's registered trademarks "Cosmos" and "Cosmos Tourama;" (ii) because there was evidence that Hellas was commonly known by the name "Cosmos.com.;" and (iii) because Hellas's use of the cosmos.com domain name was not legitimate or fair. See WIPO Case No. D2001-0941.⁵ Thus, on October 22, 2001, Hellas was notified by Verisign that unless it commenced a lawsuit by 5 p.m., November 5, 2001, the domain name cosmos.com would be transferred to defendant.

To avoid the transfer, plaintiffs filed this complaint against defendant, asserting the following claims:

(i) declaratory relief with respect to the domain name cosmos.com.;

(ii) unlawful conversion;

(iii) tortious interference with prospective economic advantage; and

(iv) abuse of process.

Defendant responded by seeking threshold dismissal of counts (iii) and (iv) of the complaint and by filing a counterclaim alleging that plaintiffs (1) engaged in trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), (2) engaged in common law unfair competition, and (3) violated the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d). Plaintiffs then sought to dismiss defendant's counterclaim and to strike the affirmative defenses in defendant's answer.

On February 15, 2002, following oral argument, a bench ruling issued, granting defendant's motion to dismiss counts (iii) and (iv) of the complaint, denying plaintiffs' motion to dismiss defendant's counterclaim, and denying plaintiffs' motion to strike defendant's affirmative defenses. See Eurotech, Inc. v. Cosmos European Travels Aktiengesellschaft, Civil Action No. 01-1689-A (E.D.Va. Feb. 15, 2002) (order). This memorandum opinion sets forth in greater detail the reasons for dismissal of counts (iii) and (iv) of the complaint.

II.

Four distinct grounds were advanced in support of the dismissal of the tortious inference with prospective economic advantage and abuse of process claims:

(1) the tortious interference claim fails because plaintiffs cannot plead or prove the requisite intent of defendant to injure plaintiffs' business and cannot plead or prove any interference with a specific business relationship;

(2) the abuse of process claim fails because plaintiffs cannot plead or prove that defendant brought the WIPO claim for an ulterior purpose;

(3) both claims fail because the Noerr-Pennington doctrine immunizes defendant from tort claims based on defendant's initiating and maintaining the WIPO proceeding (4) both claims fail because plaintiffs, by purchasing the cosmos.com domain name, agreed to submit to a WIPO proceeding in the event of a domain name dispute.

Each is treated separately.

A. Absence of necessary elements of tortious interference

In Virginia,⁶ maintenance of a tortious interference with prospective economic advantage claim requires, inter alia, alleging and proving two elements. First, a plaintiff must allege and show that defendant's actions were aimed at injuring the plaintiff's business.⁷ This, the instant plaintiffs cannot do. Here, defendant's goal in instituting the WIPO proceeding was not to injure plaintiffs' business, but rather defendant's manifestly legitimate...