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In an in rem action by U.S. toy manufacturer against several internet domain names for using its trademarks without authorization, Second Circuit explains jurisdictional grant in Anticybersquatting Consumer Protection Act of 1999 (ACPA) requiring action in judicial district of domain registrar, noting that this also satisfies international comity when applied to Australian domain registrant.

Mattel is a large U.S. toy manufacturer using a variety of trademarked names for its toys, including "Barbie," "Hot Wheels," and "Matchbox." Objecting to using the names of its toys in 57 internet domain names, Mattel brought a federal in rem action against the domain names under ACPA [15 U.S.C.S. Section 1125(d)] in the Southern District of New York. The contested domain names include "," "," "," and "" Defendant(s) had registered the 57 domain names through various domain registrars in Maryland, Virginia, New York, and California.

In cases where a federal court cannot secure personal jurisdiction over a defendant, ACPA permits the owner of a mark to bring an in rem action against a domain name that "violates any right of the owner of a mark registered in the Patent and Trademark Office, or protected under subsection (a) or (c) of this section." [15 U.S.C. Section 1125(d)(2)(A)(I)]

The district court dismissed Mattel's action because the domain names at issue were not registered within the district, and the court thus lacked in rem jurisdiction. Mattel appealed the dismissal.

The U.S. Court of Appeals for the Second Circuit affirms. It holds (1) that subsection (d)(2)(A) of the ACPA provides for in rem jurisdiction only in the judicial district in which the registrar, registry, or other domain-name authority that registered or assigned the disputed domain name is located, and (2) that subsection (d)(2)(C) odes not provide an additional basis for in rem jurisdiction.

The Court explains: "The issue of in rem jurisdiction, which is one of first impression in this Circuit, presents greater complexities. The ACPA, under 15 U.S.C. Section 1125(d)(1), allows a trademark owner to pursue an in personam civil action against an alleged trademark infringer. If the court finds that in personam jurisdiction is not available or that the infringer cannot be located, Section 1125(d)(2) allows the trademark owner to proceed against the domain name itself. Id. Section 1125(d)(2)(A)(ii). This in rem jurisdiction was provided in part to address the situation where 'a non-U.S. resident cybersquats on a domain name that infringes upon a U.S. trademark.' 145 Cong. Rec. H10, 823, H10, 826 (Oct. 26, 1999) ..."

"The registrant of is an Australian entity over which Mattel alleged in its complaint (and the district court apparently found) that Mattel was 'unable to obtain personal jurisdiction.' Consequently, Mattel sought to obtain in rem jurisdiction over pursuant to Section 1125(d)(2)(A)(ii)(I). Because the parties effectively agree that in rem jurisdiction is available in some judicial district within the United States, we turn to the question of whether the Southern District of New York is a proper judicial district for entertaining this in rem action." [Slip op. 14-15]

The Court notes (but does not decide) that there is an issue of whether an internet domain registration may be enough, by itself, to establish personal jurisdiction in that district. Other courts have expressly or tacitly found that ACPA plaintiffs could not obtain personal jurisdiction over non-U.S. persons or entities whose only contact with the United States was registering a domain name here. The Court further notes during his analysis of ACPA's legislative history that Congress plainly sought to allay any concerns that ACPA's in rem jurisdiction might offend due process or principles of international comity.

"'This type of in rem jurisdiction still requires a nexus based upon a U.S. registry or registrar [that] would not offend international comity ... Finally, this jurisdiction does not offend due process, since the property, and only the property is the subject of the jurisdiction, not other substantive personal rights of any individual defendant.'H.R. Rep. No. 106-412, at 14 (1999)." [Slip op. 24]

Thus, Congress considered the "registry or registrar" to provide a "nexus" for in rem jurisdiction under the ACPA. Thus, it is the presence of the domain name itself ("the property") in the judicial district in which the registry or registrar is located that provides the basis for the in rem action and satisfies due process and international comity.

As the Court concludes: "In sum, we hold that the ACPA's basic in rem jurisdictional grant, contained in subsection (d)(2)(A), contemplates exclusively a judicial district within which the registrar or other domain-name authority is located. A plaintiff must initiate an in rem action by filing a complaint in that judicial district and no other. Upon receiving proper written notification that the complaint has been filed, the domain-name authority must deposit with the court documentation 'sufficient to establish the court's control and authority regarding the disposition of ... the domain name,' as required by subsection (d)(2)(D)."

"This combination of filing and depositing rules encompasses the basic, mandatory procedure for bringing and maintaining an in rem action under the ACPA. Subsection (d)(2)(C) contributes to this scheme by descriptively summarizing the domain name's legal situs as established and defined in the procedures set forth in subsections (d)(2)(A) and (d)(2)(D). Accordingly, we affirm the district court's conclusion that it did not have in rem jurisdiction over the Domain Names in this action." [Slip op. 35- 36]

Citation: Mattel, Inc. v., 2002 WL 31478839, No. 01-7680 (2d Cir. November 7, 2002).
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Publication:International Law Update
Geographic Code:1USA
Date:Nov 1, 2002
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