The 11th U.S. Circuit Court of Appeals recently affirmed a district court ruling in a dispute regarding the registration of a domain name.
The Aug. 3 appeals court opinion backed the U.S. District Court for the Southern District of Florida's decision ordering Minnesota limited liability company Direct Niche to abandon its rights to the contested domain name, casasbahia.com.
In the case, Via Varejo, a Brazilian company with hundreds of Casas Bahia retail stores, said it has been utilizing the casabahia.com.br domain since 2009. The company said its goods aren’t sold in the U.S., but it does sell advertising space on its website to U.S. companies.
Direct Niche buys and sells domain names. In June 2015, the company latched onto casasbahia.com, paying $22,850. The domain was significantly more expensive than Direct Niche’s average purchase.
Via Varejo filed a complaint to defend its copyright in June 2015 against Direct Niche, alleging that the U.S. company violated the Anticybersquatting Consumer Protection Act (ACPA). A few months later, the World Intellectual Property Organization agreed with Via Varejo and ordered Direct Niche to transfer the domain.
In response, Direct Niche filed its own suit seeking an injunction against the transfer order.
The district court later ordered Direct Niche to abandon its rights to the contested domain name, and Direct Niche appealed that decision.
According to the appeals court, “Via Varejo maintained that Direct Niche is not entitled to the requested relief because Direct Niche registered the casasbahia.com domain with a bad faith intent to profit from Via Varejo’s common law service mark, Casas Bahia.”
Direct Niche had argued that there are no physical Casas Bahia locations in the U.S. and had not sufficiently established their brand’s presence. “To establish ownership of the mark,” Direct Niche posited, “Via Varejo must demonstrate prior use of the mark which had ‘substantial effects’ in the United States.”
However, the appeals court found that Via Varejo was profiting from multiple American companies through advertising sales on its website.