Southern Company v. Dauben Inc.
2009 WL 1011183 (C.A.5 (Tex.))
Facts:
The Southern Company (“Southernâ€) is a Fortune 500 company that provides energy-related services to consumers throughout the southern United States. It holds the federal, incontestable mark “SOUTHERN COMPANY†and is the registrant of the domain name southerncompany.com. Dauben Inc. (“Daubenâ€), a Texas corporation, is the listed registrant of nearly 635,000 domain names. The two challenged domain names, sotherncompany.com and southerncopany.com, are linked to a website that only provides pay-per-click advertising-when an Internet user enters either domain name in her browser, she is directed to a webpage that lists links to the websites of paying advertisers. If the user clicks on any of these links, then the advertiser pays a fee to the website. The advertising links are related to, among other things, real estate and employment companies in the southern United States. The only connection between this webpage and Southern is that the webpage contains an advertisement link to Georgia Power, a Southern subsidiary.
On August 24, 2007, the WIPO panel ruled in favor of Southern under the UDRP and ordered Dauben to transfer the domain names to Southern. The transfer could not be completed as a result of Dauben filing suit against Southern in a Dallas County justice of the peace court on July 23, 2007. Before the state court jury returned its verdict, Southern filed the current claim alleging that Dauben's “typosquatting†violates ACPA. Simultaneously, Southern filed a motion for preliminary injunction seeking to prevent Dauben's continued useof the domain names. The district court granted the motion by concluding that all four preliminary injunction prerequisites existed and therefore enjoined Dauben from “registering, transferring, trafficking, using, or maintaining the registration of the domain names, SOTHERNCOMPANY.COM and SOUTHERNCOPANY.COM, or any other domain name that is identical or confusingly similar to any of Plaintiff's SOUTHERN COMPANY marks.â€
Dauben filed a motion for reconsideration, arguing that its employment of the domain names constituted a fair use by pointing to ACPA’s safe harbor provision. Dauben also averred that the district court failed to consider the nine factor’s listed in 15 U.S.C. 1125(d)(1)(B)(i) to determine whether Dauben possessed a bad faith intent to profit from the domains names and instead improperly relied on the WIP arbitration panel’s reasoning. The court denied Dauben’s motion for reconsideration and rebuffed all of Dauben’s arguments. Dauben filed a timely appeal and later both parties filed motions for summary judgment. The district court granted summary judgment in Southern’s favor but has yet to issue its final judgment and remedy. Southern filed with this court a motion to declare the appeal moot.
Procedural Posture:
Dauben's appeal from the district court's grant of a preliminary injunction is not moot because, despite the district court's summary judgment in favor of Southern, the court has yet to issue a final judgment and permanent injunction. It was also concluded that the district court abused its discretion by conducting an incomplete analysis of Southern's likelihood to succeed on the merits and of the existence of a substantial threat of irreparable injury to Southern absent the preliminary injunction.
Holding:
The district court’s order granting the preliminary injunction was vacated and the pending motion denied.
Analysis:
As a result of this case it is clear the courts should not rely on UDRP arbitration reasoning but should instead conduct their own discovery into a plaintiff such a Southern’s likelihood to succeed on the merits as well as a defendant such as Dauben’s bad faith intent to profit under the ACPA.
2009 WL 1011183 (C.A.5 (Tex.))
Facts:
The Southern Company (“Southernâ€) is a Fortune 500 company that provides energy-related services to consumers throughout the southern United States. It holds the federal, incontestable mark “SOUTHERN COMPANY†and is the registrant of the domain name southerncompany.com. Dauben Inc. (“Daubenâ€), a Texas corporation, is the listed registrant of nearly 635,000 domain names. The two challenged domain names, sotherncompany.com and southerncopany.com, are linked to a website that only provides pay-per-click advertising-when an Internet user enters either domain name in her browser, she is directed to a webpage that lists links to the websites of paying advertisers. If the user clicks on any of these links, then the advertiser pays a fee to the website. The advertising links are related to, among other things, real estate and employment companies in the southern United States. The only connection between this webpage and Southern is that the webpage contains an advertisement link to Georgia Power, a Southern subsidiary.
On August 24, 2007, the WIPO panel ruled in favor of Southern under the UDRP and ordered Dauben to transfer the domain names to Southern. The transfer could not be completed as a result of Dauben filing suit against Southern in a Dallas County justice of the peace court on July 23, 2007. Before the state court jury returned its verdict, Southern filed the current claim alleging that Dauben's “typosquatting†violates ACPA. Simultaneously, Southern filed a motion for preliminary injunction seeking to prevent Dauben's continued useof the domain names. The district court granted the motion by concluding that all four preliminary injunction prerequisites existed and therefore enjoined Dauben from “registering, transferring, trafficking, using, or maintaining the registration of the domain names, SOTHERNCOMPANY.COM and SOUTHERNCOPANY.COM, or any other domain name that is identical or confusingly similar to any of Plaintiff's SOUTHERN COMPANY marks.â€
Dauben filed a motion for reconsideration, arguing that its employment of the domain names constituted a fair use by pointing to ACPA’s safe harbor provision. Dauben also averred that the district court failed to consider the nine factor’s listed in 15 U.S.C. 1125(d)(1)(B)(i) to determine whether Dauben possessed a bad faith intent to profit from the domains names and instead improperly relied on the WIP arbitration panel’s reasoning. The court denied Dauben’s motion for reconsideration and rebuffed all of Dauben’s arguments. Dauben filed a timely appeal and later both parties filed motions for summary judgment. The district court granted summary judgment in Southern’s favor but has yet to issue its final judgment and remedy. Southern filed with this court a motion to declare the appeal moot.
Procedural Posture:
Dauben's appeal from the district court's grant of a preliminary injunction is not moot because, despite the district court's summary judgment in favor of Southern, the court has yet to issue a final judgment and permanent injunction. It was also concluded that the district court abused its discretion by conducting an incomplete analysis of Southern's likelihood to succeed on the merits and of the existence of a substantial threat of irreparable injury to Southern absent the preliminary injunction.
Holding:
The district court’s order granting the preliminary injunction was vacated and the pending motion denied.
Analysis:
As a result of this case it is clear the courts should not rely on UDRP arbitration reasoning but should instead conduct their own discovery into a plaintiff such a Southern’s likelihood to succeed on the merits as well as a defendant such as Dauben’s bad faith intent to profit under the ACPA.