ARGOS Survives Dismissal Motions in Cybersquatting Suit

ARGOS is a corporation organized under French law—“[i]t is a non-profit organization that functions to promote and facilitate applied research in spinal surgery.” ARGOS alleges to have used the name “ARGOS” since 1996, and it operates the website to provide information globally about spinal surgery. Orthotec, LLC is incorporated in Delaware but has its principal place of business in California. It markets and sells spinal surgery products. It registered the domain name in 1999. The parties currently have a dispute pending in the PTO regarding Orthtec’s “ARGOS” trademark application.Orthotec moved to dismiss ARGOS’ anti-cybersquatting suit, to transfer venue, and to stay the suit.

Standing. The court held that ARGOS has standing. The Supreme Court lists three factors to be considered in Lujan. Plaintiff must show “injury in fact,” causal connection between the injury and the conduct complained of, and that the injury is “likely” to be redressed by a favorable decision. There are in addition prudential factors for the court to consider, see Chemerinsky. Orthotec argued that ARGOS has no standing because it does not have a title to the “ARGOS” trademark under the Lanham Act. The court disagrees: ARGOS’ alleged advertising and promotion fulfills Section 1127 of the Lanham Act’s definition of “use in commerce.” Specific to domain names, the court cites the Southern District of New York and concludes that using a domain name to operate a website (in this case the argos-europe site) is “use in commerce” because “it affects a party’s ability to offer services.”

Failure to State a Claim. To establish a claim of cybersquatting, the plaintiff must show: “(1) that a defendant registered . . . or uses a domain name that is identical or confusingly similar to a distinctive or famous trademark and (2) that the defendant has a bad faith intent to profit from that mark.” Orthotec argues that ARGOS failed to state a claim under Section 1125(d) because ARGOS did not allege facts that could lead to an inference that Orthotec acted in bath faith, specially that the complaint did not allege Orthotec intends to sell the domain name. The court disagreed. Under Section 1125(b), a court may consider a list of non-exhaustive statutory factors in finding bad faith intent, among which is the intent to divert consumers from the mark owner’s online location that could harm the goodwill represented by the mark, and the person’s registering of multiple names which the person knows are identical to marks of others, see FN4. Selling the domain name for financial gain is just one such factor, and is not necessary to a bad faith allegation.

Transfer Venue, Stay. The court denied Orthotec’s motion to transfer venue because it chose to incorporate in Deleware and the balance of factors do not show the case will more conveniently proceed in California. “[C]ourt adhere to the motion that transfer is not to be liberally granted and the plaintiff’s choice of forum is a paramount consideration.” Finally, the court held that the case will not be stayed in favor of Orthotec because the case is not dependent on a PTO ruling regarding the registration of the ARGOS trademark in the United States. The court considered the following factors: whether stay would “unduly prejudice or present clear tactical disadvantage to the non-moving party,” whether stay would simplify issues at trial, and whether discovery is complete and trial date has been set. These factors do not favor a stay.

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