U.S. judge hands down another dimissal in Mainstream Advertising's trademark infringement case

By Karen Kidd | May 15, 2018

MIAMI (Florida Record) — A federal judge has handed down another dismissal, this time in part, in a California online advertising services company's lawsuit against a Miami domain management firm with which it once had a profitable business arrangement.

U.S. District Court Judge Beth Bloom, on the bench in Florida's Southern District, Miami Division, dismissed trademark infringement and abuse of process counts in Mainstream Advertising's second amended complaint but left in place allegations of wrongful garnishment/seizure, conversion and accounting.

The defendant in the case, Moniker Online Services, "has not met its burden to warrant the dismissal" of all of Mainstream Advertising's allegations, Bloom said in her 14-page April 24 order. "Nevertheless, the court finds that the plaintiff has failed to state a claim for abuse of process." 

The partial dismissal is the latest in the litigation by Mainstream Advertising, based in Woodland Hills, California, against Miami-based Moniker Online Services, first filed in 2016.

The two companies worked together for years in the burgeoning online market, according to background information in Bloom's order. "One of the ways plaintiff monetizes its online advertising services is through its select registration and holding of domain names," Bloom wrote in her order. "Once the plaintiff acquires a desired domain name, it creates a site containing advertising content that includes links to good and services. These links direct visitors to plaintiff’s clients. The plaintiff is then compensated for the online referral."

Mainstream Advertising, "in and around 2004 and 2005," engaged Moniker "to acquire and host domain names for plaintiff’s online advertising business," Bloom's order said. "Throughout their contractual relationship, the plaintiff maintained 'hundreds of thousands' of Internet domain names through the defendant's registration and hosting services, including domain names that utilize plaintiff’s federally-registered trademarks and service marks. Some of these trademarks include, but are not limited to, 'colo.com', 'yellowpagesonline.com', 'currentaffair.com', 'mainstreamadvertising.com', 'cashnews.com' and 'vortals.com'."

The deal started to go sour in early 2012 when Moniker expanded its operation into the online traffic advertising business, putting it in direct competition with Mainstream Advertising. "Then, in March 2016, the defendant advised Mainstream that it would be taking 118 of the plaintiff's domain names, including some over which plaintiff holds trademarks, as a result of a payment dispute between the parties," the order said.

"According to plaintiff, the value of the 118 domain names that were seized far exceeded the amount of money the defendant claimed was due as a result of the payment dispute."

Shortly after, Mainstream Advertising filed suit against Moniker, alleging breach of their registration agreement, breach of implied covenant of good faith and fair dealing, conversion, unjust enrichment and trademark infringement.  

In late November 2016, Bloom dismissed Mainstream's lawsuit without prejudice for failing to retain, "despite the court's four orders to do so," the order said. Mainstream also failed to answer or Moniker's counterclaim and Bloom entered a default in the matter early the following December.

The following April, Bloom granted Moniker's motion for almost $78,000 in attorney fees and costs.

After Bloom's entry for default, Moniker initiated collection actions "in various courts" against Mainstream Advertising, including proceedings in district courts in California's northern and central districts and ex parte proceedings in the Circuit Court for the City of Alexandria, Virginia. The following July, the Alexandria court ordered Moniker to restore the domain names to Mainstream Advertising, which Mainstream Advertising alleges hasn't happened, leaving Moniker to "hold and receive income from at least 1840 domain names that were ordered to be returned," the order said.

In August 2017, Mainstream Advertising filed an amended complaint, alleging a single count of trademark infringement against Moniker, which countered with its motion to dismiss. "The court granted the motion in part, finding that plaintiff had not pled enough factual content to determine precisely how defendant, an Internet domain registrar, had infringed upon its trademarks," the order said.

In January 2018, Mainstream Advertising filed its second amended complaint, alleging trademark infringement, wrongful garnishment/seizure, abuse of process, conversion and Accounting. Moniker then filed its latest motion to dismiss.

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