Internet Injunction, Cybersquatting, Trademark, Ralph Fucetola JD

On April 12, 2004, Hon. George Seltzer, Presiding Chancery Judge of Atlantic County, New Jersey, issued an Order to Show Cause and Temporary Retraining Order in a case involving a New Jersey on-line vendor whose trademarks and trade names were being cybersquatted by an off-shore web site. On May 27, 2004 a Permanent Injunction was issued. A copy of the Injunction is below. For further information about Internet Injunctions, see: http://www.internetinjunction.com. I can be reached at ralph.fucetola@usa.net.

TRO Granted

Link to the May Injunction

Wording of the April TRO

"Further Ordered that Defendants, their assigns and successors, and all internet search engines, registers or other persons, wherever located, in concert with them, are hereby TEMPORARILY RESTRAINED, until further Order of this Court, from linking to, posting or maintaining on the Internet and World Wide Web, any web page, directly or indirectly, ...that includes, in its file name, URLs, Metags or text, the trade names or Trademarks of the Plaintiff, ... in any form, format or design."

SUPERIOR COURT OF NEW JERSEY
Chancery Division – Atlantic County
Docket No. ATL-C-66-04

G xxx, Inc., a New Jersey corporation markets under the Trademark H xxxä and h xxxä. It is the developer and owner of the Mark that Defendant Phuket Herbs of Thailand has cybersquatted in violation of Plaintiff’s famous mark, per Shields v Zuccarini (US Court of Appeals for the Third Circuit, No. 00-2236, June 15, 2001, discussed herein) through the use of online text, file name, URL (Universal Resource Locator or domain name) and/or metatags. Plaintiff’s Marks were filed for registration with the US Patent and Trademark Office, Serial Numbers 78198706, 78319316 and 78388246. It has used same since at least June 1, 2000. Defendant Phuket’s use of Herbal Smoke Shop is confusingly similar to the use by Plaintiff. Plaintiff's web site is at www.herbal-smoke-shop.com.

The actual URL that violates the Plaintiff’s rights is: http://www.herb-herbs-herbal-aromatherapy-essential-oil.com/herbal-2/h xxx .htm and it links to www.phuket-herb.com, the URL that serves as the main entry to Defendan Phuket’s web store.

Defendant Phuket’s unauthorized use will confuse the public and may constitute violations of civil and criminal statutes, including the 1999 Anticybersquatting Consumer Protection Act (15 USC 1125), Fair Trade Laws, the Copyright Act, Consumer Protection Laws and the laws protecting Trademarks. The other named Defendants are the registrar and/or administrators of the URL and prominent search engines.

1. The Plaintiff, G xxx, Inc., is a New Jersey corporation located in Galloway Township, Atlantic County, New Jersey (Certificate of Incorporation, Complaint Exhibit A).

2. Plaintiff markets herbal products and accessories through a web store on the Internet under the Trademark, H xxx and URL www.h xxx.com.

3. Defendant Phuket, upon information and belief, is an herbal supply company in Muen Phuket, Thailand. It markets under the URL www.phuket-herb.com.

4. Plaintiff has filed for Trademark registration for its trade name with the US Patent and Trademark Office, Serial Numbers 7 xxx, 7 xxx and 7 xxx.

5. Plaintiff’s Mark is a famous mark widely recognized on the Internet. According to the Alexa rating system, it holds a rank of 42,620 while Defendant Phuket’s rank is 199,528 (Exhibit B).

6. Defendant Phuket has established a spurious web page designed to mimic Plaintiff’s Mark at http://www.herb-herbs-herbal-aromatherapy-essential-oil.com/herbal-2/h xxx .htm by using the Mark in the title to the page. It is derivative and dilutive of Plaintiff’s Mark.

7. This page redirects traffic to the main Phuket Herb web shop and away from Plaintiff’s web shop, thereby counterfeiting Plaintiff’s URL.

Registration of Internet URLs is controlled through VeriSign, a corporation located in the United States, through various registrars, also primarily located in the United States.

Defendant Phuket Herbs has illegally cybersquatted Plaintiff’s Trademark. There is no adequate remedy at law to remedy this action of Defendant Phuket. The Plaintiff therefore comes before the Court of Equity seeking aid in an area of developing law. Plaintiff asserts there is a strong likelihood Plaintiffs will prevail on the merits. Plaintiff seeks a declaration from the Court regarding the legal status of Defendant Phuket’s use of the Mark H xxx so that such use can be removed from the Internet in accordance with the site use rules promulgated by the Internet Service Provider, registrar and search engines. In 1999, the Appellate Division, in the case of Tammy S. Blakey v Continental Airlines, et al (322 N.J.Super. 187) reviewed Internet case jurisdiction issues, as it was at that time, in the context of defamation. Part of what the Court had to say in Part II of the decision is of relevance here:

Internet cases involving "on-line" injuries, such as intellectual property infringement, defamation, and breach of contract have proliferated as the popularity of the Internet for communications and commerce has expanded. At this stage in the development of the Internet, a primary emerging issue is the exercise of personal jurisdiction over non-resident defendants. See, e.g., CompuServe, Inc. v. Patterson,89 F.3d 1257 (6th Cir. 1996); Blumenthal v. Drudge, 992 F. Supp 44 (D.D.C. 1998); TELCO Communications v. An Apple a Day, 977 F. Supp 404 (E.D. Va. 1997); EDIAS Software Int'l, L.L.C. v. BASIS Int'l Ltd. 947 F.Supp 413 (D. Ariz. 1996); National Petroleum Mktg., Inc. v. Phoenix Fuel Co., 902 F. Supp 1459 (D. Utah 1995).
As the case law expands, so has the commentary. While some articles suggest that traditional personal jurisdiction analysis is readily adaptable to these Internet injury cases, see, e.g., Richard S. Zembeck, Comment, Jurisdiction and the Internet: Fundamental Fairness in the Networked World of Cyberspace, 6 Alb. L.J. Sci. & Tech. 339, 367 (1996), others suggest that the nature of the Internet may require a modified analysis to avoid arbitrariness so as to advance the notion of reasonable foreseeability. See, e.g., Donnie L. Kidd, Jr., Note, Casting the Net: Another Confusing Analysis of Personal Jurisdiction and Internet Contacts in Telco Communications v. An Apple A Day, 32 U. Rich. L. Rev. 505, 533-543 (March 1998); Sam Puathasnanon, Note and Comment, Cyberspace and Personal Jurisdiction: The Problem of Using Internet Contacts to Establish Minimum Contacts, 31 Loy. L.A. L. Rev. 691 (January 1998). *** Our research has revealed only two cases in which a court has declined jurisdiction of a non-resident individual or corporate defendant which has used the Internet, e-mail, and computer bulletin boards or forums to make defamatory statements. See Barrett v. Catacomb Press, F. Supp.2d (E.D. Pa. 1999); National Petroleum, supra. *** …in TELCO Communications, supra, 977 F. Supp. at 405-08, the court found that the due process clause would not be offended by the exercise of personal jurisdiction in Virginia over a Missouri corporation that had posted on the Internet two press releases allegedly defaming a Virginia corporation. The court noted that the corporate defendant was deliberately advertising itself and soliciting business on a continuous basis in Virginia. Id. at 406. ***

Several recent cases do suggest that the Court has the power to intervene. In Shannon Zelma v Market U.S.A., 343 N.J. Super 356, decided August 2, 2001, Judge Cuff was presented with an alleged right of state court action arising from the Federal Telephone Consumer Protection Act (47 USCA 227). The Court held that no special enactment by New Jersey was needed to confer jurisdiction on the State Court.

Likewise, our claim hereunder arises, in part, through the new Federal Anticybersquatting Consumer Protection Act (15 U.S.C. 1125) that makes a person liable in a civil action for trafficking in or using the domain name (URL), personal name or famous mark of another, resulting in dilution of the trade name. In this case, as detailed in the Certification of Plaintiff’s President, the domain name and mark are the same and are used, exactly, as the URL identifier of a web page that points to the Defendant Phuket’s web site, taking visitors who want to visit Plaintiff’s site to Defendant Phuket’s site instead. Under Section 1129 Part (a) of the Act,

"any person who, on or in connection with any goods or services, or any container for goods, use in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact...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".

The Plaintiff's business name is a protected trade name. Therefore, Defendant's use of Plaintiff's trade name is in clear violation of the Act because it is an unauthorized use and a "false" and "misleading representation of fact". The Federal statute contains no specific language limiting its enforcement to federal courts, thus under the Shannon Zelma case, the Superior Court of New Jersey has authority under the Act to provide relief. Exhibits B and C show the status on the Internet of the two web pages.

Furthermore, during the last Legislative Session in 2001, the New Jersey Legislature adopted changes to our state harassment law, under Chapter 220 of the laws of that year, to extend its protection to the Internet, by including the use of computers as a basis for a harassment claim. In this case, Defendant continuously harassed the Plaintiff by redirecting the public away from Plaintiff’s business, through use of computers(see the Certification of Plaintiff’s President).

Finally, the Superior Court (Morris County) recently decided a somewhat similar Internet posting case. That decision was appealed and the Superior Court was upheld in Dendrite International, Inc. v John Doe No. 3, 342 N.J. Super 134, decided July 11, 2001. The Appellate Division stated,

"Information contained in postings...can form the basis of litigation instituted by an individual, corporation or business entity under an array of causes of action, including breach of employment or confidentiality agreements; breach of a fiduciary duty; misappropriation of trade secrets; interference with a prospective business advantage; defamation; and other causes of action" and further, "[t]he trial court must consider and decide those applications by striking a balance between the well-established First Amendment right to speak...and the right of the plaintiff to protect its proprietary interests and reputation through the assertion of recognizable claims based on the actionable conduct of the...defendants".

While that case was about communications posted on the Internet, the same analysis holds for web page names, which are also a form of communication that allows the public to access information they are seeking.

That case also concerned disclosure of the identities of anonymous Internet posters, it nonetheless gives courts guidance in determining when to intervene in Internet publication issues. Judicial intervention is necessary in an era where the Internet has become an important and effective medium for communicating information - or, as in this case, false and misleading information tantamount to counterfeiting the identity, goods and services of Plaintiff .

The way Internet search engines work is, in part, to respond to queries from the public by returning the location (URL) of web pages that include, in their names, the phrase searched. In this case, if someone searches for the Plaintiff’s web site, Herbal Smoke Shop, they will find Defendant Phuket’s web page including Plaintiff’s Mark in its name, a page that automatically redirects the searcher to Defendant Phuket’s main web page. Attached, as Exhibit C of the Complaint, is search from a leading search engine, showing how Defendant Phuket is misusing Plaintiff’s Mark (see the Certification of Plaintiff’s President).

In this case we are concerned with a Defendant that does not have permission to use a Mark, mimicking that trademark, to falsely direct Internet traffic. It is derivative and dilutive of Plaintiff’s Mark. Due to the nature of how the Defendant is misusing the Plaintiff’s Mark, judicial intervention is undeniably essential to stop the Defendant from further damaging the Plaintiff and misleading the public. We seek, in the words of Judge MacKenzie (see below), an Injunction “with legs…” since it is so simple for a Defendant like Phuket Herbs to change URL registrars, internet service search providers (see the Certification of Plaintiff’s President).

The elements of common law fraud are: (1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages. Gennari v. Weichert Co. Realtors, 148 NJ 582, 610 (1997) (citation omitted).

In Lettenmaier v. Lube Connection, Inc., 162 NJ 134 (1999), the Court stated the proposition that the Consumer Protection Act is "remedial" and therefore "its provisions are [to be] construed liberally in favor of the consumer to accomplish its deterrent and protective purposes." Id. at 139 (citations omitted). Moreover, noted the Court, the "'history of the Consumer Fraud Act is one of constant expansion of consumer protection.'" Ibid. (quoting Gennari v. Weichert Co. Realtors, 148 NJ 582, 604 (1997).

Defendant Phuket, by pretending to be the Herbal Smoke Shop, (1) engaged in material misrepresentation; (2) surely knew of that falsity; and (3) by using the dilutive “herbal-smoke-shop” web page to redirect traffic to its main herbal sales site, intended others to rely on the misrepresentation; (4) such reliance would be reasonable, as the search engines acted in concert, and (5) Plaintiff lost traffic and potential customers as a result.

Further, Defendant Phuket may change its URL registration or Internet Service Provider, to defeat the jurisdiction of the Court. In the Szynalski case, referenced below, the Defendant refused to appear in Court, moved the company owning the URL from Florida to Costa Rico and changed the Service Provider from a company in the United States to Canada. Nonetheless, Judge MacKenzie issued an Order “with legs” and the Canadian provider removed the web page.

In conclusion, the Plaintiff asks the Court to grant a preliminary injunction against Defendant, to stop the publishing of false and infringing web page names on the Internet by way of different, misleading websites (URLs). Furthermore, the nature of the issues in this case, involving counterfeit commercial attribution and the right to one’s own business name and Mark, call for immediate judicial intervention, due to the vastness of the Internet, the potential dilution of Plaintiff's trade name and reputation, and the complex issue of stopping such abuse on the Internet. There is no adequate remedy at law and only an injunction, running to the Defendant Phuket and those acting in concert with that Defendant, namely the registrars, administrators and search engines, will adequately protect the rights asserted herein.

In a matter (Szynalski et al. v Halbert et al., Docket No. MRS-C-169-02) which this Counsel presented to the Morris County Chancery Division, in December 2002, regarding the misuse of a Mark on the Internet, Judge MacKenzie, in granting a Permanent Injunction, stated:

“The Court is familiar with the nature of the conflict between these parties, having dealt with the issue at an earlier hearing. And the Court is also gratified to learn that injunctive relief that was granted in interlocutory form was effective, at lease within the United States of America. However, it seems that [Defendant] has not yet learned a lesson. The lesson is you cannot malign, embarrass, humiliate or otherwise in an egregious and untruthful fashion reduce the general reputation that a person has except by the truth. Here the truth does not support [Defendant]. Accordingly, a permanent injunction should be entered with legs that will take it beyond the boundaries of the… fifty states and will follow [Defendant’s posting] … wherever throughout the world. So ordered.”

Once again, Ralph Fucetola JD succeeded in obtaining emergency relief from a Court in an Internet Trademark Cybersquatting Case. This case, G xxxs v Phuket Herbs, sets a precedent in that the cybersquatting included not just the client's URLs, but also other Trademarks and, in an unusual twist, the defendant attempted to avoid the requirements of the law by mimicking the Trademark as part of a file name.

The Order, issued April 12, 2004, concludes,

"Further Ordered that Defendants, their assigns and successors, and all internet search engines, registers or other persons, wherever located, in concert with them, are hereby TEMPORARILY RESTRAINED, until further Order of this Court, from linking to, posting or maintaining on the Internet and World Wide Web, any web page, directly or indirectly, of Defendant ...that includes, in its file name, URLs, Metags or text, the trade names or Trademarks of the Plaintiff, ... in any form, format or design."

Ralph Fucetola, JD
ralph.fucetola@usa.net
http://www.vitaminlawyernews.com
http://www.vitaminlawyer.com
http://www.internetinjunction.com
http://www.lawyer4assetprotection.com
http://www.disclaimersforsale.com
http://www.stupidbusinessmistakes.com
All Rights Reserved

Precedent Setting Injunctions Issued in Internet Case