Intern. Bancorp v. Societe Des Baines De Mer

• Decision Date: 25 March 2002
• Docket Number: No. CIV.A.01-115-A.,CIV.A.01-115-A.
• Citation: 192 F.Supp.2d 467
• Parties: INTERNATIONAL BANCORP, L.L.C., et al., Plaintiffs, v. SOCIETE DES BAINS DE MER ET DU CERCLE DES ETRANGERS A MONACO, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

192 F.Supp.2d 467

INTERNATIONAL BANCORP, L.L.C., et al., Plaintiffs, v. SOCIETE DES BAINS DE MER ET DU CERCLE DES ETRANGERS A MONACO, Defendant.

No. CIV.A.01-115-A.

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

March 25, 2002.

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James William Pravel, Pravel Intellectual Property law, P.C., Alexandria, VA, Kathleen Joanna Lynch Holmes, Richards, McGettigan, Reilly & West, P.C., Alexandria, VA, for plaintiffs.

George Reynolds Hedges, Gregory Paul Barbee, Quinn Emanuel Urquhart Oliver & Hedges, LLP, Los Angeles, CA, Carl John Nichols, Boies Schiller & Flexner LLP, Washington, DC, for defendant.

REVISED MEMORANDUM OPINION¹

ELLIS, District Judge.

This declaratory judgment trademark infringement action pits the owner of Monaco's famed gambling establishment, Casino de Monte Carlo, against an individual and five companies who have registered fifty-three ".com" and ".net" domain names that incorporate, in various ways, the name "Casino de Monte Carlo." The disposition of the parties' cross-motions for summary judgment presents substantive and jurisdictional issues.

I.

A. SBM

Defendant and counterclaim plaintiff Societe des Bains de Mer et du Cercle des Etrangers a Monaco (SBM) is a company established in the Principality of Monaco in 1863 by charter from Prince Charles III of Monaco. SBM's majority shareholder is the government of Monaco. Its business is the management of a variety of resort hotels and gambling facilities in Monaco, including four gambling casinos, one of which is the Casino de Monte Carlo.² The record reflects that while SBM registered the "Casino de Monte Carlo" mark under the laws of Monaco in 1996, its application for the same trademark in this country, filed with the U.S. Patent and Trademark Office on November 7, 2001, is currently pending.³ The record also reflects that SBM has registered and uses various domain names,⁴ and while SBM currently provides no online gambling or gaming services, it is undisputed that SBM has such services under development.

In advertising its resort and gambling facilities, the record reflects that SBM has used the mark "Casino de Monte Carlo" in this country and throughout the world. Specifically, SBM has promoted its Casino de Monte Carlo through print media, films, and the Internet. Its magazine Societe, which is distributed in this country and elsewhere, describes and contains photographs of the Casino de Monte Carlo and uses the mark "Casino de Monte Carlo." SBM has also received substantial media coverage in this country regarding its resorts and casinos, especially the Casino de Monte Carlo.⁵

For the past eighteen years, SBM has operated a New York office to promote North American tourism in Monaco. These New York-based promotional efforts, which include advertising SBM's Casino de Monte Carlo by using the mark "Casino de Monte Carlo," occur throughout the United States by means of trade show participation, media advertising, charity partnerships, direct mail, and telephone marketing. In each of the past ten years, SBM has spent approximately four-million dollars annually on worldwide marketing efforts, with approximately twenty-five percent of this amount devoted to marketing efforts in the United States. As part of this marketing and promotional effort, SBM has annually mailed approximately 10,000 brochures that, inter alia, use the mark "Casino de Monte Carlo" to advertise this gambling facility to North American clients in the United States and Canada. A reflection of the impact of these promotional efforts is that as recently as the year 2000, approximately twenty-two percent of SBM's customers in Monaco were from North America. Undisputed evidence further reveals that the New York office was one of SBM's international sales offices from which American customers were able to book reservations.⁶

The record reflects that SBM is aware that the geographic term "Monte Carlo" is used by other entities in connection with Internet gambling.⁷ And, while it is also true that SBM has not attempted to dispute every instance of such use, this case involves more than the use of the geographic term; rather, in this case, SBM challenges the registration and use of fifty-three domain names that allegedly incorporate in some fashion the entire mark "Casino de Monte Carlo." This use of the mark, according to SBM, creates the false impression that plaintiffs' websites are affiliated with SBM. Despite this allegedly infringing use of SBM's mark, there is no evidence of resulting financial loss to SBM.

B. The Plaintiff Companies and Levy

The declarative judgment plaintiffs are five companies: International Bancorp, L.L.C. (d/b/a I. Bancorp Europe), International Services, Inc., International Lotteries, L.L.C., Britannia Finance Corporation, and Las Vegas Sportsbook, Inc. (collectively referred to as the "plaintiff companies"). These entities are also named as counterclaim defendants in SBM's counterclaim. Also named as a counterclaim defendant is Claude Levy, a French national who resides in Belgium. Levy is the owner and operator of the five plaintiff companies, which the record reflects are all undercapitalized and have failed to observe many traditional American corporate formalities. It also appears that the plaintiff companies have (i) no officers, directors, or members other than Levy and his wife, Arja Levy, (ii) no employees, and (iii) essentially no corporate records. The record also reflects that Levy and his wife registered the disputed domain names on behalf of the five plaintiff companies, occasionally using aliases in doing so. The undisputed record also reflects that while the five plaintiff companies purport to be distinct entities, they have common leadership, common goals, and work together with a common purpose. A brief description of each of the five plaintiff companies follows.

International Bancorp, L.L.C., a Delaware limited liability company, registered six of the disputed domain names with Verisign, located in Herndon, Virginia.⁸ Levy and his wife are the only members of International Bancorp. The company currently has no employees, no office, and no bank account. It has no principal place of business in the United States and its members have never filed a tax return relating to the business.

International Services, Inc., is incorporated in St. Kitts, West Indies. It registered with Verisign thirty-one domain names challenged by SBM.⁹ The corporation now manages and registers domain names for the other plaintiff companies. It has three shareholders, including Levy. International Services has no employees, no offices, and no bank accounts.

International Lotteries, L.L.C., is a Delaware limited liability company that registers domain names and develops websites. It has no employees, no offices, and no bank account. The company registered with Verisign twelve of the domain names that are now in dispute.¹⁰ Levy and his wife are the sole members of the company.

Britannia Finance Corporation is a Delaware corporation that provides accounting and financial services for the other plaintiff companies. Britannia's sole directors are Levy and his wife. It has no employees and no offices, but does maintain bank accounts in European banks. The record reflects that Britannia maintained no corporate minutes and has never filed a tax return in any jurisdiction. Britannia registered with Verisign four of the domain names that are now in dispute.¹¹

Las Vegas Sportsbook, Inc. is incorporated under the laws of the Republic of Panama and has registered domain names on behalf of the other plaintiff companies. Las Vegas Sportsbook has two corporate shareholders, both of which are owned by Levy, who acts himself as an agent on behalf of Las Vegas Sportsbook. Like the other plaintiff companies, Las Vegas Sportsbook has no employees, no offices, and appears to lack any source of revenue.

Levy, the five plaintiff companies, and their affiliates are in the business of developing and operating websites relating to the online gaming industry. Domain names are, of course, central to this effort. The first of the domain names at issue registered by one of the plaintiff companies was casinomontecarlo.com, which was registered by International Lotteries in 1997. Since then Levy and the five plaintiff companies have registered with Verisign the additional 52 disputed domain names.

According to the record, Levy, the five plaintiff companies and their affiliates have developed more than 150 websites devoted to online gambling.¹² Among these websites are "Casino Monte Carlo," located at casinomontecarlo.com and "Monte Carlo Casinos," located at montecarlocasinos.com. These two sites are central to the plaintiff companies' online gambling activities. Located at these sites are the plaintiff companies' pages describing their online gambling services and containing pictures and graphics of the interior of a casino that appears to be copied from SBM's Casino de Monte Carlo.¹³ Both sites invite visitors to download the plaintiff companies' software program entitled "Casino Monte Carlo." This program uses a greeting that reads "Welcome to Casino Monte Carlo" and contains a picture of the exterior of SBM's Casino de Monte Carlo.¹⁴ Levy, the record reflects, authorized the use of these pictures of graphics.

Also located at these sites are the following statements which appear in part to refer or allude to SBM:

• "This casino is owned and managed by a group of U.S. corporations, including a U.S. finance company, and an international group of companies who have been in business for more than 140 years."

• "We are the only Internet gaming company to have the double gambling license from Casino Monte Carlo and from Las Vegas Casino."

• "For your protection, your funds are held in a top European bank, established over 100 years ago, which also provides the strictest banking secrecy in the world,...