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Judge: Outdated caselaw needs revised to handle Internet issues

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A dissenting judge in an unfair competition case involving the near simultaneous registrations of the same Internet domain name urged the Indiana Legislature and Supreme Court to “usher Indiana into the technological realities of the 21st Century.”

Judge Patricia Riley dissented from her colleagues Judge Melissa May and Chief Judge Nancy Vaidik in Serenity Springs, Inc. and Laura Ostergren v. The LaPorte County Convention and Visitors Bureau, by and through its Board of Managers, 46A04-1309-MI-470, a case that’s before the appeals court for the second time in a little more than a year.

The LaPorte County Convention and Visitors Bureau sued area hotel-resort Serenity Springs after the resort registered the domain name “visitmichigancitylaporte.com” just hours of the visitors bureau announced at a public meeting the phrase “Visit Michigan City LaPorte” was selected as the branding identifier for the area. Because Serenity Springs registered that domain name first – and used it to direct traffic to its website – the visitors bureau was unable to acquire it.

In April 2013, the Indiana Court of Appeals reversed the trial court’s holding that permanently enjoined Serenity from using the designation or domain name and ordered the resort to transfer the domain to the bureau. But the trial court hadn’t considered all of the claims before it when it issued that ruling last year, so on remand, the trial court once again ruled in favor of the visitors bureau on its claim of unfair competition and trade name infringement.

The majority, citing Hartzler v. Goshen Churn Ladder Co., 55 Ind. App. 455, 104 N.E. 34 (1914), reversed and ruled in favor of the resort.

“We acknowledge authority from other jurisdictions suggests a ‘single use’ or an ‘initial use’ is sufficient (on an unfair competition claim),” Judge Melissa May wrote. “But even that standard is not met in the case before us; we have only the Bureau’s statement of its intention to commence using that phrase. Serenity Springs’ actions therefore did not amount to unfair competition, and it was error for the trial court to so hold.”

“Visit Michigan City LaPorte,” was not a protectable trade name and Serenity Springs’ use of it was not unfair competition, the majority held.

Judge Patricia Riley, in her dissent, argued that the bureau established a bona fide initial use of the phrase by paying a marketing firm and announcing the results in a televised meeting. But the majority declined to hold paying for a study and announcing its results amounts to even a single or initial “use in trade.”

Riley described Hartzler as “still good law,” but its principles are “difficult to apply to an era where messages can be sent at the speed of light and goods can be purchased by the push of a button.” She noted she could not find a case anywhere that has dealt with the nearly simultaneous registrations of domain names in the context of common law unfair competition, and that Indiana caselaw is extremely sparse with respect to trademarks and trade names.   

“In light of Indiana’s sparse and outdated case law, I would urge our Legislature and supreme court, if the opportunity arises, to look beyond the man and cart method promoted by Hartzler and approved by an out-of-touch majority, and instead usher Indiana into the technological realities of the 21st Century by formulating tools appropriate to handle the complexities of the internet’s realm,” she wrote.

 

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