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An Ohio federal court determines that large brokerage is likely to succeed in its cybersquatting lawsuit against a competitor who had registered domain names which bore a strong resemblance to the brokerage’s registered trademarks and owner’s names, and so the court entered an injunction prohibiting the competitor from using these domain names.
HER (“Company”) is an Ohio corporation which provides real estate brokerage services under the name “Real Living”. The Company’s name is derived from the initials of its founder, Harley E. Rouda, Sr. His son, Harley E. Rouda, Jr., and his son’s wife, Kaira Sturdivant-Rouda, are both involved in the current management of the Company. The Company has registered a number of trademarks, including “HER” and “REAL LIVING”.
RE/MAX First Choice, LLC, (“First Choice”) is a competitor of the Company. David Barlow (“Barlow”) is a real estate licensee affiliated with First Choice. Previously, Barlow had been affiliated with the Company from 1998-2004.
In spring of 2006, an email purportedly from “Herbie R Jr.” was sent to seven hundred of the Company’s salespeople. The email was titled “’Inside’ Real Living”, and pretended to be an inside look at the Company and its management. Among other things, the message stated that the Company’s public website was not a complete inventory of all home listings, as the Company allegedly chose not to display the listings of certain competitors, including Barlow’s listings.
The Company launched an investigation into the origin of the email, and the email was traced back to an email address used by Barlow. In June 2006, a second email was purportedly sent by herbiejr@INSIDEREALLIVING.COM(link sends e-mail). This email also focused on the fact that the Company’s website was not a complete inventory of all listings, and the email took issue with the Company’s claims that visitors could see “[a]ll the homes for sale”. Subsequently, the Company did change the language on the website to state that visitors could see “virtually all the homes” for sale.
Eventually, Barlow admitted he was the source of the emails. Barlow also stated that he had registered the domain name www.insiderealliving.com(link is external) as well as other similar domains such as www.harleyrouda.com(link is external), www.harleyroudajr.com(link is external), and www.harleyroudasr.com(link is external). Testimony indicated that users who visited any of the domains registered by Barlow were diverted to First Choice’s website.
The Company brought a lawsuit against First Choice and Barlow for violations of federal trademark law and also pursuant to the federal anti-cybersquatting laws. “Cybersquatting” is the registering, trafficking in, or using of a domain name with bad-faith intent to profit from the goodwill of a trademark belonging to someone else. The Company sought a preliminary injunction preventing any further use of the domain names registered by Barlow.
The United States District Court for the Southern District of Ohio entered injunctive relief prohibiting First Choice and Barlow from using the various domain names registered by Barlow. Courts consider the following when determining whether an injunction is appropriate: 1) likelihood of success on the merits by party seeking injunction; 2) party seeking injunction will suffer irreparable harm without the injunction; 3) probability of harm to others if injunction is entered; and 4) whether the public interest would be advanced by entering an injunction.
The court evaluated whether the Company was likely to succeed on its allegations made pursuant to the federal Anti-Cybersquatting Protection Act (“ACPA”). The ACPA is an amendment to the Lanham Act, the federal trademark law. In order to recover under the ACPA for cybersquatting, a party must show: first, it has a valid trademark entitled to protection; second, the mark is distinctive or famous; third, the other domain name is identical or deceptively similar to the owner’s marks; fourth, the other party used, registered, or trafficked in the domain name; and finally, the other party had intent to profit from the use of the domain name.
Looking at the first element, the court found that the Company had valid trademarks entitled to protection. In addition, the personal names of the Company’s founder and current management were entitled to protection because those names had become synonymous with the Company and so were also entitled to protection under applicable principles of trademark law. The second element was satisfied, as the marks and names were well known in the relevant market. The court determined that “insiderealliving.com” as well as the domains with the personal names of the Company’s management were “deceptively similar” to those of the Company because using these domains could easily confuse consumers and so the third element was satisfied. Barlow had used the domains, meeting the fourth prong, and had diverted some visitors to the First Choice website and had created confusion among consumers as to the location of the Company’s website, thereby economically benefiting First Choice and Barlow. The court rejected Barlow’s argument that he was merely criticizing the Company and his speech was protected by the First Amendment, finding that misleading use of trademarks is not protected by the First Amendment. Thus, the court ruled that the Company was likely to succeed on the merits of its lawsuit and so met the first requirement for seeking injunctive relief.
Next, the court looked at whether the Company was likely to suffer irreparable harm if an injunction did not issue. Since the court had already determined that the continued use of the domain names could confuse consumers, the court ruled that this requirement was also satisfied. Since the use of the domain names was likely to only cause harm to the Company, there was no harm to others from issuing this injunction. Finally, the public interest was served by stopping the misleading use of domain names. Therefore, the court ruled that the Company was entitled to injunctive relief preventing Barlow and First Choice from using the domain names.
The court then turned to the Company’s trademark infringement allegations and whether these allegations also entitled the Company to injunctive relief. In order to succeed in a trademark infringement action, a party must show: ownership of a valid trademark; misuse of the trademark in commerce; and likelihood of consumer confusion. The Company had a valid trademark, and Barlow had used the trademark in commerce. The court had already determined that there was a likelihood of confusion, and so the court ruled that the Company was also entitled to an injunction for trademark infringement.
HER, Inc. v. RE/MAX First Choice, LLC, No. 206-CV-492, 2007 WL 43747 (S.D. Ohio Jan. 5, 2007). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].