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Decision against travel bureau over domain name draws sharp dissent on appeal

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An Indiana Court of Appeals judge recently wrote that her colleagues who formed the majority to rule against a local tourism board were “out of touch,” and she suggested a case over an Internet domain name presented a novel issue that no court in the country has addressed.

At issue: Does a local visitors bureau have a common-law unfair competition claim against a resort that quickly registered the Web address “visitmichigancitylaporte.com” just after the name was announced during a public meeting?

A trial court ruled in favor of the visitors bureau on seven common-law claims, but a divided Court of Appeals panel reversed 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. The majority – authoring Judge Melissa May and Chief Judge Nancy Vaidik – applied 100-year-old caselaw, which dissenting Judge Patricia Riley wrote was unresponsive to the realities of the Internet age.
 

riley-patricia.jpg Riley

“Despite my state and nationwide research, no single similar case exists – even Indiana case law in general is extremely sparse with respect to trademarks, let alone trade names. Although factually some cases might come close, no court before us has dealt with the almost simultaneous registrations of domain names in the context of common law unfair competition.”

In this case, the Serenity Springs resort registered the URL shortly before the visitors bureau attempted to do the same. The resort then used the Web address to direct Internet traffic to its website.

Riley held that this should give rise to a common-law unfair competition claim, as the trial court held, largely relying on Restatements of Torts to make the argument.

“By appropriating the Bureau’s trade name and linking it to its own website, Serenity created this probable confusion and deception and consequently committed unfair competition with the Bureau,” Riley wrote. “I would affirm the trial court’s finding of unfair competition in favor of the Bureau.”

But some legal experts believe that no trade name even exists in this case. The phrase in question isn’t trademarked,

and the Court of Appeals has rejected claims that the bureau has established a right of use.

Michigan City attorney Michael S. Bergerson represents the LaPorte County Convention and Visitors Bureau and said he expects the board will authorize a petition to seek transfer to the Indiana Supreme Court, based in part on the strength of the dissent.

“It would appear to me at least and others who read (the opinion) that the court is essentially inviting the visitors and convention bureau to seek transfer,” Bergerson said.

“It’s bad law, what they did,” he claimed of the Court of Appeals ruling. “It opens the door for a lot of charlatans out there who want to pass off their goods as somebody else’s.”

Attorney Jonathan Watson of Passaro Kahne & Taylor of Benton Harbor, Michigan, represented the resort and doesn’t see it that way. “I don’t think the Supreme Court is likely to take this one,” he said. “The Court of Appeals opinion is pretty much in line with what is generally legal nationwide.”

In a prior ruling, the Court of Appeals threw out the trial court ruling that enjoined Serenity Springs from using the domain name. In the current case appealed after remand that again found in favor of the bureau, May wrote for the majority that “Visit Michigan City LaPorte” was not a protectable name and Serenity Springs’ use wasn’t unfair competition.

Valparaiso University School of Law Professor Curt Cichowski said the key to the ruling was the majority’s holding that this phrase had not become identified with the visitors bureau before the resort began to use it.

Curt Cichowski Cichowski

“I don’t see this case as breaking any new ground,” said Cichowski, who teaches courses on intellectual property, trademark and unfair competition, among others. Cichowski said it’s impossible for domain names to be almost simultaneously registered, as Riley suggested in dissent, because the first registration earns the right to use the name.

“Serenity obviously adopted someone else’s future slogan as their URL. They did not act in the best of faith,” Cichowski said. “Gut instinct suggests the bureau should have some remedy. But Serenity did not infringe any trademark of the bureau, they did not unfairly compete, and they did not cyber-squat.

“There is no question they ‘took’ it from the bureau and adopted it as their own URL. But it takes more than ill intent to establish consumer confusion. The case turns on what the consuming public took the phrase to identify,” he said. “It does not turn on who thought of the phrase first, but who used it first to establish an identity – in the relevant consumers’ minds – for their goods or services.”

“The bureau could have avoided all of this by simply having the URL registered before they made the public announcement,” Cichowski said. “In hindsight, a simple cure.”

The majority relied on Hartzler v. Goshen Churn Ladder Co., 55 Ind. App. 455, 104 N.E. 34 (1914), in which the court ruled that it was unfair competition “(w)here such words or names by long use have become identified in the minds of the public with the goods or business of a particular trader.”

The majority held, “As Serenity Springs bought and began using the domain name immediately after the Bureau announced it in a public meeting, the name could not have ‘previously come to indicate and designate [the Bureau’s] goods,’ nor could it have, by ‘long use’ become identified in the minds of the public with the Bureau.”

In the interim, the bureau is using the URL michigancitylaporte.com as its Web address Bergerson said, and Watson said Serenity has parked the visitmichigancitylaporte.com domain for the time being, in compliance with the trial court order.

Bergerson claims the bureau was harmed because it invested more than $100,000 in a marketing campaign that found added value in the domain name that it sought to register. He bristles at the suggestion that the bureau and a hired marketing company simply didn’t have their ducks in a row before announcing the domain name.

“We attempted to settle the case,” he said, accusing Serenity of trying to profit from the sale of the domain name. “The demand they made was outlandish,” he said.•

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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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