In a troubling development for all domain investors, The United States District Court for the Eastern District Of Virginia has awarded the domain name Sharetv.com to the owner of ShareTv.org under a lawsuit brought under the Lanham Act and Virginia’s Unfair Competition Act. (Case No. 1:13-cv-00506, Dkt No. 1)

Although ShareTv.org had a federally registered trademark on the term ShareTV, the domain name Sharetv.com was registered three years before the Plaintiff’s own domain name ShareTV.org was  registered and some 7 years before trademark was registered.

The judgement entered by the court was actually a default judgement as the domain holder of ShareTv.com did not appear in the proceeding however, the court did examine the claims of the trademark holder and made certain rulings on the claims which again I can only describe as troubling for all domain investors.

Here are the relevant dates:

The domain name ShareTv.com was registered on September 29, 2004. (the Defendant’s Domain)

The domain name Sharetv.Org was registered on January 4, 2007 (the Plaintiff’s Domain)

The owner of ShareTv.org start’s doing business on February 1, 2007

The trademark on the term ShareTv was issued by the USPTO on April 19, 2011

The court justified its ruling that the registrant of the domain name ShareTv.com owned over 1,500 domain names and only parked the domain finding;

“Since Registrant registered the Domain Name, he has only used it in connection with a few scattered “parked” pages and mostly revenue-generating sponsored links.”

“Registrant never established Trademark or Servicemark rights in or to ShareTV, as evidenced by the fact that Registrant never used the Domain Name in connection with any bonafide offering of goods and/or services.”

As you will read below the domain holder didn’t help his cause by taking certain actions in response to Plaintiff’s claim which only hurt his case and of course his biggest error was not defending the lawsuit.

Chris Richmond the owner of ShareTv.org and the plaintiff in this suit sent TheDomains.com an advance copy of a press release will be out later today in which he says in part:

“Because Mr. Kim registered ShareTV.com four years before ShareTV launched, the lawsuit did not include the more traditional Domain Name causes of action under the Anti-cybersquatting Consumer Protection Act (ACPA) or the Uniform Domain-Name Dispute Resolution Policy (UDRP).”

“Ultimately, the Court looked past the fact that ShareTV.com was registered prior to ShareTV.org, and found that Mr. Kim’s “actions were done with the deliberate intent to deceive potential and actual users/consumers to [ShareTV’s] website.”

“The Court effectively concluded that a parked page or splash page could constitute trademark infringement, regardless of when the infringing domain was registered.”

“We hope that our case will set a precedent and pave the way for future startups.”

“The fact that we were able to prove trademark infringement against a domain registered four years before we began business is huge, and we hope it encourages companies faced with a similar situation to take action,” says Richmond.

Hum

Like I said Troubling.

Very Troubling

Here are the relevant facts and finding by Magistrate Ivan D. Davis:

ShareTV, Inc. (“Plaintiff ‘) filed a Complaint on April 25, 2013, seeking relief under 15 U.S.C.§§ 1114(1) and 1125(a), Va. Code§§ 59.1-200 and 59.1-92.12, and Virginia’s common law Unfair Competition Act based on Mr.Sooyong Kim’s (“Registrant’s) use of the Defendant Domain ShareTv.com

Plaintiff is an online television community offering a broad range of services for more than 10,000 television shows.

Since the founding of Plaintiff in 2007, Plaintiff has acquired more than fifty million total visitors to its ShareTV website, receives nearly two million monthly visitors, and has over 175,000 registered users.

On or about February 1 , 2007, Plaintiff adopted and began to use the service mark and trade name ShareTV in commerce within the United States in connection with its online television services; this use has continued in connection with such services.

This service mark and trade name is used by the public to identify the services of Plaintiff and to distinguish it from others.

Plaintiff registered the domain name on , and has used this domain name since February 1, 2007 in connection with the advertising, offering, and rendering of its online television services.

In addition to the domain name sharetv.org, Plaintiff also owns fourteen other domain names which redirect the user to Plaintiff’s primary sharetv.org domain name including Share.tv

Additionally, on April 19, 2011, Plaintiff was issued U.S. Registration No.3,947,657 for the SHARETV service mark in connection with its online television services.

The Registrant of Defendant Domain Name ShareTv.com, is currently listed as the owner of over 1,500 domain names.

In 2011, Plaintiff began receiving reports of confusion between Registrant’s use of the Domain name and Plaintiff’s website.

After these reports continued, Plaintiff notified Sedo Inc., the company hosting the Domain Name, about Registrant’s unauthorized use of the Plaintiff’s SHARETV mark. Sedo Inc. recognized the confusion and promptly removed the Domain Name from its hosting service on or about February 4, 2013.

In an effort to remedy the confusion, Plaintiff offered to purchase the Domain Name from Registrant, but did not succeed.

Through Plaintiff’s Counsel, on February 25, 2013, Plaintiff sent a cease-and-desist letter by way of e-mail to Registrant regarding his infringing use of the SHARETV service mark and the consumer confusion resulting from such use.

Subsequently, Plaintiff and Registrant, by way of legal counsel, entered into discussions regarding the Defendant Domain Name.

After discussions between Plaintiff and Registrant failed, Registrant modified the Domain Name website to display Plaintiff’s SHARETV service mark in Korean instead of the former display in English; Registrant also added that the alleged online television services would be “Coming Soon.”

Registrant subsequently made additional changes to augment the Domain Name website to more closely resemble that of Plaintiffs website, including prominently displaying Plaintiffs SHARETV service mark for the first time since registering the Domain Name in 2004. Registrant also included the phrase “The TV that we share with Neighbors . .. ‘Coming soon.'”

Confusion over Defendant Registrant’s Domain Name and Plaintifrs website continues to increase.

In that regard, on April 23, 2013, a writer for the New York Post’s online newspaper confused the Defendant Domain Name with Plaintiff’s website and another user of Plaintiff’s website advised Plaintiff of this article and inquired about the affiliation between the Domain Name and Plaintiffs website.

Due to Registrant’s now virtually identical service mark to that of Plaintiffs SHARETV mark, save only the minor difference between the Domain Name and Plaintiff’s SHARETV mark, is the top-level domain signifier”.com.” Some of Plaintiff’s users have and continue to be confused as to Registrant’s Domain Name, and the confusion will likely continue if Registrant’s Domain Name remains operable.

Plaintiff alleges that Registrant’s use of Plaintiff’s SHARETV mark in the Defendant Domain Name constitutes trademark infringement under 15 U.S.C.§§ 1114 and 1125(a) and violates Virginia’s common law requirements for unfair competition, Va. Code § 59.1-92.12 and the Virginia Consumer Protection Act, Va. Code § 59.1-200. Plaintiff moves this Court to enter an Order of default judgment against Defendant and to authorize the transfer of ownership of the Domain Name to Plaintiff.

First, Plaintiff alleges that Registrant’s continued use of Defendant Domain Name violates 15 U.S.C. §§ 1114 and 1125(a) because it constitutes trademark infringement.

Furthermore, § 1125(a) provides that a person will be liable in a civil action, if, without consent of the registrant, the person uses any word, term, name or combination thereof that:

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 15 U.S.C. § 1125(a).

Thus, for Plaintiff to prevail in its action for trade and service mark infringement under §§ 32(1) and 43(a) of the Lanham Act, P1aintiff must establish that: (1) Plaintiff owns a valid and protectable mark; (2) Registrant used the mark in commerce in connection with the sale, offering of sale, distribution, or advertising of goods and/or services; and (3) Registrant’s use of the mark is likely to cause confusion among customers.

Virginia’s statutory requirements under Va. Code § 59.1-92.12 for trade and service mark infringement and Virginia’s common law requirements for unfair competition are analogous to that ofthe federal requirements under§§ 32(1) and 43(a) of the Lanham Act.

Va. Code§ 59.1-92.12 states that an action for service mark infringement may be brought against any person who uses in a manner likely to cause a consumer confusion, mistake,or deception as to the source or origin of any goods or services, without the consent of the owner of a registered mark, any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of such goods or services.

1. Ownership of the SHARETV Service Mark

Plaintiff is the owner of U.S. Registration No. 3,947,657 for the SHARETV service mark.

Because Defendant has failed to respond to Plaintiffs allegations in the instant case.and because upon default Defendant concedes Plaintiff’s allegations, Plaintiff has established its exclusive rights to the SHARETV service mark.
3. Likelihood of Confusion

A likelihood of confusion exists “if the defendant’s actual practice is likely to produce confusion in the minds of consumers about the origin of goods or services in question.”

In assessing the confusion, the standard is “how the two parties actually use their marks in the marketplace to detennine whether the defendant’s use is likely to cause confusion.”

The Fourth Circuit set out nine factors to assess whether a likelihood of confusion exists including:

(1) the strength or distinctiveness of the plaintiff’s mark as actually used in the marketplace; (2) the similarity of the two marks to consumers; (3) the similarity of the goods or services that the marks identify; (4) the similarity of the facilities used by the two parties; (5) the similarity of advertising used by the two parties; (6) the defendant’s intent; (7) actual confusion; (8) the quality of the defendant’s product; and (9) the sophistication of the consuming public.

Not all of these factors are of equal importance, nor are they always relevant in any given case.

Further, evidence of actual confusion, is weighed most heavily in the likelihood-of-confusion analysis.

In assessing the likelihood of confusion,this Court examines eight of the nine relevant factors within the nine factor test.11

a. Strength of Distinctiveness of Plaintiffs Mark

Since 2007, Plaintiff has grown significantly and incurred numerous followers and users.

Thus, due to Plaintifrs expansive online television business, including fifty million total users and two million monthly users, it follows that Plaintifrs SHARElV service mark is recognizable.

Plaintiff has also heavily invested in advertising and promoting its online television website and services in connection with the SHARETV mark.

Consequently, the commercial value of the SHARETV service mark is strong enough to enhance the confusion of actual and potential consumers.

Because Plaintiff federally registered its SHARETV service mark, the mark is presumed inherently distinctive and its registration constitutes prima facie evidence that the mark is not generic or merely descriptive.

In total, this Court finds that the foregoing illustrates that Plaintiff’s SHARETV mark is both distinctive and strong.

b. Similarity of the Marks

Because the Domain Name is virtually identical to the SHARETV service mark, save the additional <“.com”>, and also because this additional part is not a part of the actual service mark, the marks appear identical.

The Fourth Circuit has held that a likelihood of confusion exists when a domain name is identical to the mark in question, regardless of whether confusion about a website’s source or sponsorship could be resolved by visiting the plaintiff’s true website.

Registrant’s addition of “.com” to the Plaintitrs SHARETV service mark to create the Defendant Domain Name may actually enhance the likelihood of confusion between the SHARETV service mark and the Domain Name because many Internet users may mistakenly associate the Domain Name with the SHARETV service mark and business. See id. The fact that the Domain Name is nearly identical to the SHARETV service mark in tenns of appearance, sound,and meaning weighs heavily in favor of a likelihood of confusion. See George & Co., 575 F.3d at 396. Thus, due to the similarity of the Plaintitrs SHARETV mark and the mark Registrant’s uses in the Domain Name, this Court finds that the marks are nearly identical.

c. Similarity of the Goods/Services

The Defendant’s Domain Name website purports to be the home page of Plaintifrs SHARETV and displays the messages:”The TV that we share with neighbors”and “Coming Soon. ” (Compl.1j38.) Although the Domain Name website does not currently offer any identifiable goods or services, if Registrant acts on his published statements that TV services will be “Coming Soon,”it is likely that Registrant will utilize the Domain Name to offer competing services to those offered by Plaintiff. See George & Co., 575 F.3d at 397. Thus, because Registrant purports to offer the same services as Plaintiff in the future, this Court finds that the goods and services to be rendered are similar.
d. Similarity of Facilities Used in Business

Defendant’s Domain Name website and Plaintiff’s website both use the internet to connect with consumers. The use of substantially identical means by both the Plaintiff and Defendant to facilitate services to consumers weighs in favor of finding a likelihood of confusion. explaining that the fourth factor weighs in favor of finding a likelihood of confusion where both parties used the internet to facilitate services to consumers).

Thus, upon comparison of the facilities used by both Plaintiff and Registrant, this Court finds that the facilities are identical.

e. Similarity of Advertising

Since Plaintiffs business began in 2007, Plaintiff has conducted business and collected revenue in connection with the SHARETV service mark and trade name.

Plaintiff has invested heavily in online advertising and promotion for its television community and services offered under the SHARETV service mark.

Registrant does not have the same longevity, advertising, and promotion services as Plaintiff.

In fact, Registrant’s only advertising contains the phrase “Coming Soon” alongside the phrase “The TV that we share with neighbors.”

However, the advertising does use the same facility, being the internet, and targets the same consumer audience.

Further, Registrant’s lack of advertising suggests that Registrant sought to obtain a free ride off the SHARETV service mark reputation and the advertising efforts of Plaintiff.

Thus, although the advertising quality and quantity between the two parties is not similar, because they share the same medium and audience, this Court finds that as a whole, these factors minimally weigh in favor of the likelihood of confusion by consumers.

f. Registrant’s Intent

Registrant’s intent can be inferred by a series of events including:a pattern of registering and using over 1,500 domain names; the lack of the Defendant Domain Name’s use in connection with any bonafide goods or services; Plaintiff’s cease-and-desist letter to Registrant putting Registrant on notice of his infringing use; and Registrant’s modification of the Defendant Domain Name shortly after discussions with Plaintiff.

Although intent to deceive is not required for a finding of confusion, if there is intent to confuse the public, this intent constitutes strong evidence of establishing a likelihood of confusion. See Pizzeria Uno, 747 F.2d at 1535. Thus, as evidenced by the aforementioned events on the part of Registrant, the undersigned concludes that Registrant’s actions were done with the deliberate intent to deceive potential and actual users/consumers of Plaintiff’s website.

g. Actual Confusion

A defendant’s conduct which results in actual confusion among consumers is one of the most heavily weighed factors in ascertaining the existence of a likelihood of confusion.

To date, multiple users of Plaintiffs website have reported their confusion between Registrant’s Domain Name and Plaintiff’s website.

Additionally, a writer for the New York Post’s on-line newspaper confused Defendant Domain Name with Plaintiff’s domain name, which confirms that a variety of consumers are actually confused by Registrant’s use of the Domain Name.

Therefore, the undersigned finds that Plaintiff pleads clear evidence that actual confusion between the Domain Name and Plaintiff’s website has occurred.

h. Sophistication of the consuming public

Along with the consuming public, a writer for the New York Post’ s online newspaper, a recognizable publication, confused Plaintiff’s website with Defendant Domain Name. Such confusion constitutes adequate evidence of confusion by both the general public as well as sophisticated users.

Accordingly, upon review of the record and after giving weight to the aforementioned factors, the undersigned finds that Plaintiff has sufficiently plead that Registrant’s actions in connection with Defendant Domain Name result in a clear finding that such actions are likely to cause confusion to consumers. T

hus, this Court finds that Registrant’s use of Plaintiff s SHARETV mark in the Domain Names constitutes trademark infringement under 15 U.S.C. §§ 1114 and 11 25(a) as well as Va. Code§ 59.1-92.12 and Virginia’s common law requirements for unfair competition.

B. Count Three: Virginia Consumer Protection Act

Pursuant to Va. Code§ 59.1-200(A)(2), (3) and (14), the Virginia Consumer Protection Act, it is unlawful to “misrepresent the source,sponsorship,approval,or certification of goods or services… misrepresent the affiliation, connection, or association of the supplier, or of the goods or services, with another … [or] use any other deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction.”

Defendant Domain Name purports to be the home page of Plaintiff, and displays the messages: “The TV that we share with neighbors”and “Coming Soon.”

Further, Defendant Domain Name’s failure to use the website in connection with any bona fide goods or services, Plaintiffs cease-and-desist letter to Registrant making Registrant aware of his infringing use, and Registrant’s modification of the Domain Name shortly after discussions with Plaintiff show an attempt by the Registrant to misrepresent affiliation, connection, or association of SHARETV with Plaintiff in violation of the Virginia Consumer Protection Act, Va. Code§ 59.1-200.

In sum, this Court finds that Registrant’s use of Plaintiff’s SHARETV mark in connection with Defendant Domain Name constitutes trademark infringement under 15 U.S.C. §§ 1114 and 1125(a) as well as Virginia’s common law requirements for unfair competition, Va. Code § 59.1-92.12, and the Virginia Consumer Protection Act, Va. Code § 59.1-200.

IV. RELIEF

Although Plaintiff’s Complaint seeks several remedies Plaintiff’s Motion for Default Judgment asks only for the transfer of the Domain Name to Plaintiff.

Under§ 43(d)(2) of the Lanham Act, the relief for an in rem proceeding is forfeiture or cancellation of the domain name or transfer of the domain name to the owner of the trademark.

Since the registry for Defendant Domain Name, Verisign Inc., is located within this judicial district and subject to the Court’s jurisdiction, this Court may properly order Verisign Inc. to transfer the Defendant Domain Name to Plaintiff’s chosen registrar,eNom, Inc. so that eNom, Inc. may register the Domain Name in Plaintiff’s name.