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NIKE INC. v. CIRCLE GROUP INTERNET INC.

May 21, 2004.

NIKE, INC., an Oregon corporation, Plaintiff; V. CIRCLE GROUP INTERNET, INC., an Illinois corporation, Defendant


The opinion of the court was delivered by: ROBERT GETTLEMAN, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Nike, Inc. filed a four-count complaint seeking damages and injunctive relief against defendant Circle Group Internet, Inc., alleging that defendant's use of the domain name <justdoit.net> constitutes: cybersquatting under the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d) (Count I); trademark infringement in violation of the Lanham Act, 15 U.S.C. § 1114(1), and the common law of various states, including Illinois (Count IT); unfair competition under the common law of various states, including Illinois, as well as a violation of the Illinois Deceptive Trade Practices Act, 815 ILCS §§ 510/1 et seq. (Count III); and dilution in violation of the Lanham Act, 15 U.S.C. § 1125(c) (Count IV).

Defendant has moved for summary judgment pursuant to Fed.R.Civ.P. 56(c) on Count IV, and plaintiff has moved for summary judgment on Count I. For the reasons discussed herein, plaintiff's motion for summary judgment is granted and defendant's motion for summary judgment is denied. FACTS*fn1

  Plaintiff Nike is a sports and fitness company that designs, manufactures, and markets a broad range of footwear, apparel and equipment. Since 1988, plaintiff has continuously used and promoted the trademark "JUST DO FT" in the United States and worldwide in connection with footwear, apparel, equipment, retail store services, web-based communication, informational services, advertising, and other related goods and services. Plaintiff owns valid and subsisting federal trademark registrations issued by the United States Patent and Trademark Office for its JUST DO IT mark, including Reg. Nos. 1,817,919 (registered on January 25, 1994) and 1,875,307 (registered on January 24, 1995). Plaintiff's exclusive right to use these registrations has become incontestable under 15 U.S.C. § 1065 and 1115.

  Plaintiff has spent hundreds of millions of dollars advertising and promoting its JUST DO IT mark and has sold tens of millions of dollars in apparel under that mark. Plaintiff has produced advertisements featuring JUST DO IT annually since 1990, and has further produced apparel featuring that mark every season since 1990. Plaintiff also owns the <justdoit.com> domain name.

  Defendant Circle Group Internet, Inc., which was started in 1994, is a company engaged in the business of assisting emerging companies trying to build their business infrastructure. On or about February 20, 1997, defendant registered the domain name <justdoit.net> with Network Solutions, Inc. and began using it for the purpose of employee email addresses. From 1999 to 2002, defendant also used the <justdoit.net> domain name to redirect internet users to its web sites at <circlegroupinternet.com> and <crgq.com>.

  Defendant makes no use of the JUST DO IT mark or the phrase "just do it" on its website, and has no trademark registrations or applications for the JUST DO IT mark. Nor is JUST DO IT part of defendant's legal name or the legal name of any individual in the company. Defendant at no time provided goods or services in connection with the <justdoit.net> domain name, which was merely used as a redirect to defendant's primary websites.

  As of the mid-to late-nineties, defendant's CEO, Gregory Halpern, was aware that plaintiff used JUST DO IT. Moreover, in his deposition, Halpern acknowledged that it was possible that he knew of plaintiff's use of the JUST DO IT phrase prior to registering <justdoit.net>.

  According to Halpern, he chose <justdoit.net> as his company's domain name because it is a positive, catchy and motivational phrase that he has been using for over thirty years, as well as in his book I Care About You, which was published by Can-Do Publishing Company, Inc. in 1978. According to the declaration of Ashly Iacullo, attached to plaintiff's reply, however, I Care About You does not contain the phrase "just do it," and defendant has not directed the court's attention to any excerpt of the book that recites that phrase. Further, in its own review of the book, the court also could not locate the phrase "just do it." Nor has defendant provided any other evidence that would corroborate Halpern's testimony that he used the phrase consistently over the past thirty years.

  On June 13, 2002, plaintiff filed a complaint with the World Intellectual Property Organization Arbitration and Mediation Center ("WIPO") regarding defendant's use of the <justdoit.net> domain name. A majority of the WIPO panel concluded that Nike was unable to show that Circle Internet Group registered the <justdoit.net> domain name in bad faith, relying at least in part on Circle Internet Group's representation that <justdoit.net> was used as its main web page. In reaching that conclusion, however, the majority opinion noted that using the domain name as a redirect to its own web page "could potentially qualify as `bad faith' use." (Emphasis added.)

  With this background in mind, the court turns to the standards governing the instant motions for summary judgment.

  SUMMARY JUDGMENT STANDARD

  A movant is entitled to summary judgment under Fed. R Civ. P. 56 when the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Unterreiner v. Volkswagen of America, Inc., 8 F.3d 1206, 1209 (7th Cir. 1993). Once a moving party has met its burden, the nonmoving party must go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial. See Fed.R.Civ.P. 56(e); Becker v. Tenenbaum-Hill Assoc., Inc., 914 F.2d 107, 110 (7th Cir. 1990). The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd, v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "The mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). DISCUSSION

 1. Plaintiff's motion for summary judgment on Count I

  Plaintiff has moved for summary judgment on its Anticybersquatting Consumer Protection Act (ACPA) claim, 15 U.S.C. § 1125(d). To prevail under the ACPA, plaintiff must establish that: (1) its JUST DO IT mark is distinctive and famous; (2) defendant's <justdoit.net> domain name is identical or confusingly similar to plaintiff's JUST DO IT mark; and (3) defendant registered or used the <justdoit.net> domain name with bad faith intent to profit. 15 U.S.C. § 1125(d)(1)(A). Defendant does not dispute that the first two elements of plaintiffs ACPA claim have been met in the instant case. Accordingly, the court focuses its attention on the third element: bad faith intent to profit.

  The ACPA, 15 U.S.C. § 1125(d)(1)(B)(i), lists the following non-exhaustive factors to assist the court in determining whether a person or entity acted with bad faith:
(I) the trademark or other intellectual property rights of the person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;
(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
(V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;
(VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct; (VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;
(VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of this section.
  The ACPA also includes a "safe harbor" provision that provides that bad faith "shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was fair use or otherwise lawful." 15 U.S.C. § 1225(d)(1)(B)(ii).

  The sixth, seventh and eighth factors do not support a finding of bad faith. Plaintiff concedes that defendant never offered to transfer, sell or otherwise assign <justdoit.net> for financial gain. Moreover, there is no evidence that defendant provided material and misleading false contact information when applying for its registration of <justdoit.net>, or that defendant acquired multiple domain names which it knows are identical or confusingly similar to others' marks.

  Defendant does not dispute, however, that the first, second, third, fourth, fifth, and ninth factors favor plaintiff. Defendant does not have any intellectual property rights in <justdoit.net<, and <justdoit.net> does not consist of defendant's legal name or a name that is commonly associated with defendant. Defendant has also not used <justdoit.net> in connection with the bona fide offering of any goods or services. Nor has defendant made bona fide noncommercial or fair use of the JUST DO IT mark in a site accessible under <justdoit.net>. Defendant also concedes that it was aware of plaintiff's JUST DO IT mark when it registered <justdoit.net> and used ...


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