Stanford Center for Internet and Society

Peter Catalanotte, defendant-appellant, registered the domain name on January 21, 1997. Never having operated any website using this domain name, Catalanotte sent an e-mail on October 27, 2000 to officers of Ford, inquiring about their interest in buying the domain name. Ford filed its Complaint on November 30, 2000 in the District Court, alleging cyberpiracy, trademark dilution, trademark infringement, and false designation of origin. The Court found Catalanotte liable for damages under the ACPA for trafficking in the domain name.The Anticybersquatting Consumer Protection Act was passed by Congress in 1999, as an amendment to the Lanham Act of 1946. The ACPA prohibits the act of registering, trafficking in, or using a domain name that is identical or confusingly similar to a distinctive mark, or that is identical or confusingly similar to or dilutive of a famous mark, with a bad faith intent to profit from it. The ACPA applies to all domain names registered before, on or after the date of the enactment, and provides for injunctive relief as well as recovery of actual damages or statutory damages.

The District Court for the Northern District of Illinois, Judge Rebecca R. Pallmeyer, denied a motion for summary judgment against Skylink Technologies, Inc., manufacturer of a universal remote control for garage door openers, for allegedly violating the Digital Millennium Copyright Act (DMCA). The Chamberlain Group, Inc., a manufacturer of garage door openers and remote controls, sued its competitor Skylink for marketing a universal remote. Skylink's universal remote is capable of operating a line of Chamberlain openers that uses a special software algorithm to increase security. The Chamberlain system uses a rolling code, varying the signal used to trigger the opener with each subsequent use. Skylink's universal remote allegedly circumvents that rolling code system. Chamberlain argued that the rolling code system is a technological measure that controls access to the copyrighted computer program controlling the garage door opener (actually the same program that implements the rolling code security feature); thus Skylink is liable for trafficking in a circumvention device in violation of the DMCA.

At issue was whether the copyright owner should be permitted to recover actual damages beyond the defendant’s profits, where the profits resulted from the overseas distribution of videos produced by infringing a copyright within the United States. The Ninth Circuit answered no, holding that the “narrow exception [to the Copyright Act] for the recovery of the infringer’s profits” does not include actual damages.

The Copyright Act applies only to infringements occurring within the United States; infringements outside U.S. borders are traditionally beyond the reach of U.S. courts. In this case, Reuters copied videos in New York, then distributed them through various overseas networks, including the British Broadcasting Company and the European Broadcast Union. Because the “act of infringement [was] completed entirely within the United States and … such infringing act enabled further exploitation abroad,” the court allowed the plaintiff to recover the defendant’s profits. It cited an exception to the Copyright Act as determined in Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45, (2nd Cir. 1939) (“profits from overseas infringement can be recovered on the theory that the infringer holds them in a constructive trust for the copyright owner“).

The plaintiffs, the Traditional Cat Association and its head Diana L. Finerman, sued the defendants for using the name “Traditional Cat Association.” The case went to trial on the plaintiffs’ claims of copyright infringement and coversion and the defendants’ counterclaims of defamation, intentional interference with prospective economic damage, and conversion. The judge entered judgment as a matter of law in favor of the defendants on the copyright infringement claims. The defendants voluntarily dismissed their counterclaim for defamation at the close of evidence, and the jury found for the plaintiffs on the defendants claim for conversion. The jury was unable to reach a verdict on the plaintiffs’ claim for conversion and the defendants’ claim for defamation, so the judge declared mistrials on those claims.