Volume I

Issue : 8: October 16, 2003

• Privacy Commissioner Rules on Three PIPEDA Complaints Filed Against Banks
• U.S. Court of Appeals Finds Right to Domain Name Contingent on Ongoing Conduct
• BC Supreme Court Finds Exchange of Emails Sufficient To Form Binding Contract
• U.K. House of Lords Rejects Common Law Tort of Invasion of Privacy
• BC Supreme Court Finds Election Gag Law Unconstitutional
• Web Radio Royalty Fees Upheld
• Two U.S. Court of Appeals Release Judgments on the Scope of the Immunity Provided to ISPs Under CDA
• U.S. Regulators to Take Action Against Online Pharmacies
• Ontario Court of Appeal Overturns Internet Libel Finding

Home > Volume I > Issue 8: October 16, 2003 > U.S. Court of Appeals Finds Right to Domain Name Contingent on Ongoing Conduct

U.S. Court of Appeals Finds Right to Domain Name Contingent on Ongoing Conduct

In Storey v. Cello Holdings, the U.S. Court of Appeals (2nd Cir.) has held that a registrant's right to a domain name under the law was not a permanent determination but rather "contingent on ongoing conduct." Cello, a seller of high-end audio equipment, sued Lawrence Storey in U.S. Federal District Court in 1997, contending that Storey's registration of the domain name cello.com was diluting its trademark "Cello." Two years later, while the case was still pending, the federal Anticybersquatting Consumer Protection Act (ACPA) was passed and Cello amended its complaint to add a cybersquatting claim. Shortly before trial in August 2000, Cello's lawyers told the Court the matter had settled, and the Court issued an order dismissing the case with prejudice. But the settlement never took place and after the 30-day window to restore the action had expired, Storey's counsel sent a letter to Cello stating that Storey was now offering the domain name for sale.

Cello then brought a complaint under the Uniform Domain Name Dispute Resolution Policy ("UDRP") seeking a transfer of cello.com, stating that it had voluntarily dismissed its complaint so as to avail itself of UDRP, which was not available at the time of the earlier filing. Storey disputed the arbitrators' authority under the UDRP to hear the case, arguing that res judicata barred the action since it had been earlier dismissed by the District Court, and alternatively, that the claim lacked merit. The UDRP panel sided with Cello and ordered Storey to transfer the domain name. Storey then brought a declaratory judgment action before the District Court, which found that f Storey's claim under the ACPA was false, since the letter was simply a reassertion by Storey of his rights to the domain name. The judge also found that Cello was barred from reasserting its claims in arbitration, since the relief it sought there "was precisely the relief Cello had sought" in the earlier action.

In reversing the lower Court's decision, the U.S. Circuit Court of Appeals (2nd Cir.) held that Storey's letter which contained the offer to sale presented a question whether he had an illegal "bad faith" intent to profit from Cello's mark and was properly the basis for a new cause of action by Cello to ascertain rights over the domain name.

For a copy of the opinion, visit:

http://caselaw.lp.findlaw.com/data2/circs/2nd/027281p.pdf