Bihari v. Gross
United States
District Court for the Southern District of New York
Judge Shira A.
Scheindlin:
Plaintiffs Marianne Bihari and
Bihari Interiors, Inc. (collectively "Bihari") move to preliminarily
enjoin defendants Craig Gross and Yolanda Truglio (collectively "Gross")
from using the names "Bihari" or "Bihari Interiors" in the
domain names or metatags of any of their websites ("the Gross websites"),
claiming that such use violates the Anticybersquatting Consumer Protection Act
("ACPA"), 15 U.S.C. § 1125(d)(1), and infringes on Bihari's
common-law service mark in violation of § 43(a) of the Lanham Act, 15 U.S.C. §
1125(a)(1)(A). …
II. Background
A. The Failed Contract
Marianne Bihari is an interior
designer who has been providing interior design services in New York City, New
Jersey, Connecticut, California, Florida and Italy since 1984. Since 1989, she
has been continuously doing business as Bihari Interiors or Marianne Bihari
d/b/a Bihari Interiors. The Bihari Interiors name is well known, particularly in
the New York City high-end residential interior design market. Bihari does not
engage in paid advertising to promote her services; rather, she relies on
referrals from clients and other design-industry professionals.
Craig Gross is a former client
of Bihari Interiors. Yolanda Truglio is Gross's girlfriend. On February 12,
1998, Gross, on behalf of 530 East 76th Street, Inc., retained Bihari Interiors
to provide interior and architectural design services for his condominium
apartment on East 76th Street ("the Contract"). For various reasons
not relevant to this action, the relationship between Bihari and Gross soured,
and the Contract was never completed.
On June 14, 1999, Gross filed
suit against Marianne Bihari and Bihari Interiors in New York State Supreme
Court alleging fraud and breach of contract ("the State Suit"). On
August 12, 1999, Gross submitted an amended verified complaint in the State Suit.
On April 3, 2000, the state court dismissed two of the fraud claims, but granted
Gross a right to replead one of those claims. Gross has since filed a second
amended complaint which is currently pending in New York State Supreme Court.
......
C. The Websites
On March 7, 2000, Bihari served
Gross with the instant Complaint and motion for injunctive relief. Gross then
offered to take down the "bihariinteriors.com" website pending a
preliminary injunction hearing. He has since relinquished the domain names
"bihari.com" and "bihariinteriors.com" and is taking all
necessary steps to return those domain names to Network Solutions, Inc., the
provider of domain name registrations.
On March 7, 2000, the day that
Bihari served Gross with the Complaint, Bihari also learned of another website
created by Gross, "designscam.com", by using an Internet search engine
and searching for the words "Bihari Interiors". Bihari discovered that
the "designscam.com" website contained the same content as the "bihariinteriors.com"
website. Then, on March 11, 2000, Gross registered a fourth website, "manhattaninteriordesign.com",
containing the identical material as "designscam.com".
All of the Gross websites use
"Bihari Interiors" as metatags embedded within the websites' HTML code.
The description metatags of the Gross websites state "This site deals with
the problems experienced when hiring a new [sic] York City (Manhattan) designer.
It discusses Marianne Bihari[,] fraud and deceit and interior decorating."
D. The Website Content
Each of the Gross websites is
critical of Bihari and her interior design services. An Internet user accessing
any of the websites first sees a large caption reading "The Real Story
Behind Marianne Bihari & Bihari Interiors." Directly beneath this title
are three photographic reproductions of scenic New York. Beneath the photographs
is a counter indicating how many visitors the website has had. As of June 26,
2000, the counter indicated that 9,774 people have visited the website since
August 15, 1999. Also appearing on the first page of the websites are various
hyperlinks including "Tips on Picking a Designer," "New York City
Information," "Who's Who in Interior Design," "Kabalarians
Philosophy," "A Humorous Look," "Tell A Friend,"
"Send E-Mail," "Sign or Read the Guest Book," and "Participate
in the Bihari Poll."
A long block of text appears
beneath these hyperlinks and it states:
Welcome to the first
web site designed to protect people from the alleged ill intentions of
Marianne Bihari & Bihari Interiors. Keep in mind that this site reflects
only the view points and experiences of one Manhattan couple that allegedly
fell prey to Marianne Bihari & Bihari Interiors. There possibly may be
others that have experienced similar alleged fraud and deceit from Marianne
Bihari & Bihari Interiors. Please feel free to e-mail us if you think you
were victimized by Marianne Bihari & Bihari Interiors. Our goal is to
protect you from experiencing the overwhelming grief and aggravation in
dealing with someone that allegedly only has intentions to defraud. If you
think you need advice before entering into a contract with Marianne Bihari
& Bihari Interiors - Please Click Here.
Below this text a viewer finds
additional hyperlinks to "The Initial Meeting," "The Contract,"
"The Scam," and "The Law Suit" [sic]. Viewers who connect
with these links do not immediately receive the information, but are told that
if they send an e-mail, they will receive a copy of the requested information.
In addition to these comments,
the Gross websites contain a "guestbook" where visitors leave messages
for other visitors to the websites. Some of the guestbook entries indicate that
potential clients declined to retain Bihari's services because of the Gross
websites. Other messages simply comment or inquire about the Gross websites'
design. Many other entries disparage Bihari and Bihari Interiors. Bihari alleges
that many of the guestbook entries were written by Gross and Truglio, and do not
reflect true dissatisfaction with Bihari or Bihari Interiors.
The "designscam.com"
and "manhattaninteriordesign.com" websites also contain a box which
presents in blinking green letters the following incomplete statement quoted
from Bihari's March 3, 2000 Affidavit: "I was arrested and charged with
criminal possession of stolen property in the Fifth Degree." Gross neither
includes the rest of the sentence—which reveals that the arrest was for a
misdemeanor offense—nor informs the reader that the District Attorney's Office
declined to prosecute the case.
....
III.
Applicable Legal Standard
"Because of the great
potential for harm which may occur from the issuance of a preliminary injunction,
the party seeking the injunction must sustain a heavy burden." Ringling
Brothers-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corp.,
937 F. Supp. 204, 207 (S.D.N.Y. 1996). The party seeking such relief must
demonstrate: (1) likelihood of irreparable harm should the injunction be denied;
and (2) either (a) likelihood of ultimate success on the merits, or (b)
sufficiently serious questions going to the merits and a balance of hardships
tipping decidedly toward the party seeking relief.
IV.
Discussion
A. The Lanham Act Claims
1. Irreparable Harm
"Irreparable harm is an
injury that is not remote or speculative but actual and imminent, and for which
a monetary award cannot be adequate compensation." Tom Doherty Assocs. v.
Saban Entertainment, Inc., 60 F.3d 27, 37 (2d Cir. 1995). In a trademark
infringement case, a presumption of irreparable harm arises where a plaintiff
makes a showing of likelihood of confusion. A showing of likelihood of confusion,
therefore, will establish the irreparable harm requisite for a preliminary
injunction.
2. Likelihood of Success on
the ACPA Claim
On November 29, 1999, Congress
adopted the ACPA "to remedy the perceived shortcomings of applying the FTDA
[Federal Trademark Dilution Act] in cybersquatting cases." Sporty's
Farm L.L.C. v. Sportsman's Market, Inc., 202 F.3d 489, 495 (2d Cir. 2000).
To establish a claim of cybersquatting, a plaintiff must show: (1) that she had
a distinctive mark at the time of the registration of the domain name; (2) that
the defendant "registers, traffics in, or uses a domain name" that is
identical or confusingly similar to that mark; and (3) that the defendant has
"a bad faith intent to profit from that mark." 15 U.S.C. §
1125(d)(1). A preliminary injunction is a remedy authorized by the ACPA.
In March 2000, Bihari claimed
that Gross's registration of "bihari.com" and "bihariinteriors.com"
violated the ACPA because he registered the confusingly similar domain names
with a bad faith intent to profit by pressuring Bihari into settling the State
Suit at terms favorable to Gross. Since then, Gross has abandoned those two
websites and promised to transfer the domain names back to Network Solutions,
Inc.
However, during the August 28
telephone conference, Bihari's attorney claimed that use of "Bihari
Interiors" in the metatags violates the ACPA. Neither Bihari's attorney,
nor this Court, has been able to find a single case applying the ACPA to
metatags. Although no court has expressly stated that the ACPA does not apply to
metatags, the plain meaning of the statute and its legislative history make this
conclusion apparent. See 15 U.S.C. § 1125(d)(A)(ii) (ACPA provides an
action against one who "registers, traffics in, or uses a domain name....")
(emphasis added); Mattel, Inc. v. Internet Dimensions Inc., 2000 WL
973745 at *2 (S.D.N.Y. July 13, 2000) (Congress's purpose in adopting the ACPA
was to "protect consumers and American businesses ... by prohibiting the
bad-faith and abusive registration of distinctive marks as Internet domain names....")
Therefore, the ACPA is no longer a basis for preliminary injunctive relief as
Gross has voluntarily relinquished the Bihari domain name.
3. Likelihood of Success on
the Trademark Infringement Claim
A claim of trademark
infringement under § 43(a) of the Lanham Act requires the plaintiff to show (1)
that she has a valid mark that is entitled to protection under the Lanham Act,
and (2) that use of that mark by another "is likely to cause confusion . .
. as to the affiliation, connection, or association of such person with another
person, or as to the origin, sponsorship, or approval of [the defendant's] goods,
services, or commercial activities by another person." 15 U.S.C. §
1125(a)(1)(A); Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503,
1508-09 (2d Cir. 1997). As discussed more fully below, Bihari has failed to
demonstrate a likelihood of success on the merits of this claim because Gross's
use of the "Bihari Interiors" mark in the metatags is not likely to
cause confusion and is protected as a fair use.
a. The Strength of
Bihari's Mark
"Bihari Interiors" is
not a registered trademark with the United States Patent and Trademark Office.
Rather, Bihari claims that she is entitled to a common-law service mark.
Registration is not a prerequisite to protection under § 43(a) of the Lanham
Act. The four judicially-developed categories of trademarks, listed in ascending
order of their strength are (1) generic, (2) descriptive, (3) suggestive, and
(4) arbitrary or fanciful. A generic mark can never be protected, but a
descriptive mark can obtain registration if it has acquired "secondary
meaning." See Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc.,
192 F.3d 337, 344 (1999). "Fanciful, arbitrary and suggestive marks are
deemed inherently distinctive. Their intrinsic nature serves to identify a
particular source of a product, so they will be automatically protected"
without a showing of secondary meaning. Id. A term is descriptive if it
"tells something about a product, its qualities, ingredients or
characteristics." Estee Lauder Inc., 108 F.3d at 1509. In contrast,
a term is suggestive if it "requires imagination, thought, and perception
to reach a conclusion as to the nature of the goods" or services it
represents. Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d
1033, 1039 (2d Cir. 1992).
Generally, personal names used
as trademarks are regarded as descriptive terms, protected only if they have
acquired distinctive and secondary meaning. However, "Bihari Interiors"
is a suggestive rather than a descriptive mark because it suggests Bihari's
services. The mark requires an imaginative leap to correctly identify Bihari's
services. The word "interiors" does not immediately identify interior
design services. It could as easily describe a company producing home
furnishings, seat covers for automobiles or services such as carpet cleaning or
wall painting. As a suggestive mark, "Bihari Interiors" is inherently
distinctive and entitled to protection.
b. Commercial Use
The plain language of the Lanham
Act makes apparent that § 43(a) is only applicable to commercial uses of
another's mark. First, the statute only applies to actions taken by individuals
"in connection with any goods or services." Second, § 43(a) is
limited to uses likely to cause confusion "as to the origin, sponsorship,
or approval of [the defendant's] goods, services, or commercial activities...."
Third, § 43(a) is limited by 15 U.S.C § 1125(c)(4)(B), which states that
"noncommercial use of a mark" is not actionable under the Lanham Act.
[T]he Second Circuit has
explained that "the 'core notion' of commercial speech includes 'speech
which does no more than propose a commercial transaction.'" Bad Frog
Brewery, Inc. v. New York State Liquor Authority, 134 F.3d 87, 97 (2d Cir.
1998).
"The mere use of another's
name on the Internet ... is not per se commercial use." Bally Total
Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161, 1166 (C.D. Cal. 1998).
Nor do the Gross websites offer any "commercial transaction."
Defendants are not interior designers and do not sell visitors any products or
services. However, the Gross websites contain hyperlinks to other websites which
promote the services of other interior designers. The Gross websites effectively
act as a conduit, steering potential customers away from Bihari Interiors and
toward its competitors, thereby transforming his otherwise protected speech into
a commercial use.
c. Likelihood of Confusion
Plaintiffs argue that inclusion
of "Bihari" and "Bihari Interiors" in the metatags of the
Gross websites is likely to cause confusion. Plaintiffs overstate their case.
Because the purpose of the websites is to injure Bihari Interiors commercially,
no reasonable viewer would believe that the disparaging comments regarding
Bihari's business ethics—comments which appear on the first page of the
websites—are endorsed by Bihari. Moreover, in the instant case, there is no
"lengthy delay between attempting to access plaintiff's home page and
learning that one has failed to do so." Therefore, any likelihood of
confusion is minimal.
....
e. The Fair Use Doctrine
Even if the Gross websites cause
consumer confusion, use of the "Bihari Interiors" mark in the metatags
is protected as a fair use. The Lanham Act codified a common law fair use
defense in 15 U.S.C. § 1115(b)(4). The fair use doctrine applies to the
Internet as readily as to the print media.
"Fair use is established
when the challenged term is a use, otherwise than as a mark, ... of a term or
device which is descriptive of and used fairly and in good faith only to
describe the goods or services of such party...." 15 U.S.C. § 1115(b)(4).
In other words, "fair use permits others to use a protected mark to
describe aspects of their own goods." Car-Freshner Corp. v. S.C.
Johnson & Son, Inc., 70 F.3d 267, 270 (2d Cir. 1995). It is not
necessary that the plaintiff's mark be classified as "descriptive" to
benefit from the fair use defense. Instead, the central considerations are
whether the defendant has used the mark (1) in its descriptive sense, and (2) in
good faith.
(i) Use of the Term in
its Descriptive Sense
The requirement that a trademark
be used in its descriptive sense is met where the mark is used in an index or
catalog, or to describe the defendant's connection to the business claiming
trademark protection. Applying this general rule to the metatag context,
Professor McCarthy states: "The fair use defense applies ... if another's
trademark is used in a meta tag solely to describe the defendant or defendant's
goods or services . . . ." 4 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition, § 25:69 at 25-137 (4th ed. 1999). This position
finds support in recent cases. In Playboy Enters., Inc. v. Welles, 7 F.
Supp. 2d 1098 (S.D. Cal. 1998), Playboy sought to enjoin Terri Welles, a former
"Playmate of the Month" and "Playmate of the Year", from
utilizing the trademarked terms "Playboy" and "Playmate" in
the metatags of Welles's website. The court denied the injunction, holding that
use of the trademarked terms in the metatags is a fair use. The court stated:
With respect to the meta
tags, the court finds there to be no trademark infringement where defendant
has used plaintiff's trademarks in good faith to index the content of her
website. The meta tags are not visible to the websurfer although some search
engines rely on these tags to help websurfers find certain websites. Much
like the subject index of a card catalog, the meta tags give the websurfer
using a search engine a clearer indication of the content of a website. The
use of the term Playboy is not an infringement because it references not
only her identity as a "Playboy Playmate of the Year 1981," but it
may also reference the legitimate editorial uses of the term Playboy
contained in the text of defendant's website.
Here, Gross has included "Bihari
Interiors" in the metatags of his websites because the websites provide
information about Bihari Interiors and Marianne Bihari. Gross has not used the
terms "Bihari Interiors" and "Bihari" in the metatags as a
mark, but rather, to fairly identify the content of his websites. In short,
Gross uses the "Bihari Interiors" mark in its descriptive sense only.
Moreover, use of the "Bihari
Interiors" mark in the metatags of his websites is the only way Gross can
get his message to the public. A broad rule prohibiting use of "Bihari
Interiors" in the metatags of websites not sponsored by Bihari would
effectively foreclose all discourse and comment about Bihari Interiors,
including fair comment. Courts must be particularly cautious of overextending
the reach of the Lanham Act and intruding on First Amendment values. …
(ii) Gross's Good Faith
To benefit from the defense of
fair use, Gross must have acted in good faith. The inquiry into a defendant's
good faith focuses on whether "the defendant adopted its mark with the
intention of capitalizing on plaintiff's reputation and goodwill and any
confusion between his and the senior user's product." Lang v.
Retirement Living Pub. Co., Inc., 949 F.2d 576, 583 (2d Cir. 1991).
Bihari argues, in a conclusory
fashion, that Gross did not adopt the "Bihari Interiors" mark in good
faith. Rather, Gross intended to divert individuals searching for information
about Bihari Interiors to his websites. This argument is not persuasive.
Metatags serve as a cataloging system for a search engine. Gross has the right
to catalog the contents of his websites. Furthermore, the fact that Gross knew
of the prior use of the "Bihari Interiors" mark does not in itself
prove a lack of good faith. "Prior knowledge of [plantiff's] trade name
does not give rise to a necessary inference of bad faith, because adoption of a
trademark with actual knowledge of another's prior registration ... may be
consistent with good faith." Lang, 949 F.2d at 583-84.
In addition, the domain names of
the Gross websites and the disclaimer prove that Gross is using "Bihari
Interiors" in good faith. The domain names of his websites in no way
confuse Internet users into believing that his site is actually that of Bihari
Interiors. Moreover, the Gross websites include a disclaimer: "Keep in mind
that this site reflects only the view points and experiences of one Manhattan
couple...." Although a disclaimer cannot insulate Gross from liability, it
indicates good faith use of the service marks and weighs in Gross's favor. Even
if the Gross websites are mean-spirited and vindictive, bad faith cannot be
imputed as well to Gross's use of the "Bihari Interiors" mark in the
metatags.
...
V.
Conclusion
For the foregoing reasons,
Bihari's motion for a preliminary injunction is denied in its entirety. …
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