MEMORANDUM OPINION
Before the Court is plaintiffs' Motion for Summary Judgment,in which plaintiffs seek judgment on all claims in both thecomplaint and counterclaim in this action. Plaintiffs, RetailServices, Inc. and Freebie, Inc., have sued defendants, FreebiesPublishing and its owners Eugene and Gail Zannon, for adeclaration that plaintiffs' website, freebie.com, does notviolate the Anti-Cybersquatting Consumer Protection Act ("ACPA")and the Lanham Act. 15 U.S.C. § 1125 (2003). Plaintiffs alsoseek cancellation of defendants' "Freebies" trademarkregistration on the ground that the trademark is invalid becausethe word "freebies" is generic. Defendants have counterclaimed,alleging trademark infringement, unfair competition, trademarkdilution, cybersquatting, and violation of the Virginia BusinessConspiracy Act. Va. Code § 18.2-500 (2003). For the reasonsstated below, plaintiffs' Motion for Summary Judgment will beGRANTED.
FACTUAL BACKGROUND
In 1978, Brian Weiss registered a stylized version of the word"freebies" as a trademark for use in newspapers (RegistrationNo. 1,108,616). Mr. Weiss used this trademark in the title ofFreebies Magazine, a publication with information about freemail order offerings. Defendants Eugene and Gail Zannon boughtFreebies Magazine in 1979, acquiring the rights to the Freebiestrademark, and continued to publish Freebies Magazine using thetrademark logo. Defendants abandoned the registration on June18, 1985, but, claiming priority through abandoned registration,filed a new registration in 1992. Plaintiffs' Exhibit No.("Pl.Ex.") 34. On November 30, 1993, the United States Patentand Trademark Office granted defendants a new registration ofthe word "freebies" and its stylized logo for use in"periodicals, namely magazines and newspapers with informationabout mail order offerings" (Registration No. 1,807,431).Defendants' Exhibit No. ("Df.Ex.") 22. As that registrationshows, defendants' trademark is for the following stylized word: Freebies
Defendants published Freebies Magazine until March of 2001, atwhich time they abandoned their printed publications and beganoperating a website that provides information about mail orderofferings. Defendants registered the domain name freebies.com onNovember 18, 1997. Pl.Ex. 35.
Plaintiff Retail Services, Inc., which is owned and operatedby Frank Byrley, provides customer relationship managementservices ("CRM services") to retail companies. Retail Servicesinstalls and maintains computer systems connected to retail cashregisters. This computer system identifies, based on acustomer's purchase, an incentive offer that might attract thatcustomer and prints that offer on the customer receipt. In 1991,during the period when defendants had abandoned the trademark,Byrley sought legal counsel regarding whether the term "freebie"was available for use and legally protectable. At that time,counsel advised Byrley that the term was generally available foruse. Pl. Ex. 21. In 1995, Retail Services registered the domainname freebie.com for future use. Pl.Ex. 6N.
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On November 22, 1999 Byrley formed Freebie, Inc. to providehis CRM services to one particular customer, Blockbuster, Inc.Under plaintiffs' contract with Blockbuster, Blockbustercustomers earn "Freebie Points" when they rent or buy movies atany Blockbuster outlet. These customers can redeem their FreebiePoints for free products and discounts from Blockbuster andother retailers. The freebie.com website, which becameoperational on August 1, 2001, allows Blockbuster customers whoare members of the Freebie Program to access and manage theirFreebie Points account and redeem their Freebie Points formerchandise.
On December 3, 2001, defendants sent plaintiffs a cease anddesist letter demanding that plaintiffs cease using the word"freebie" on their website. Pl.Ex. 17. Plaintiffs responded thatthe word was generic and that they would not stop using it.Pl.Ex. 18. On April 30, 2001, Freebies Publishing brought anarbitration proceeding against Retail Services under the UniformDomain Name Dispute Resolution Policy ("UDRP"), seeking transferof the domain name freebie.com to Freebies Publishing. Pl.Ex.16.
Pursuant to the UDRP Rules, National Arbitration Forum ("NAF")panelist Carolyn Marks Johnson considered whether the domainname was confusingly similar to a registered trademark, whetherRetail Services had any rights or legitimate interest in thedomain name, and whether the domain name had been registered andused in bad faith. Johnson found that the domain name,freebie.com, was confusingly similar to the Freebies trademark,and that Retail Services had no trademark rights in the namefreebie.com. Regarding bad faith, Johnson found that RetailServices' use of the word "freebies" in a metatag for its ownsite was evidence that it was aware of defendants' trademark andhad registered the freebie.com domain name in bad faith.1
Based on this finding of bad faith, the NAF panelist orderedthe registration of the domain name freebie.com transferred todefendants. Pl.Ex. 15. Plaintiffs brought this suit to block thetransfer.
DISCUSSION
I. The Validity of Defendants' Trademark
Plaintiffs argue defendants' trademark registration should becancelled because the word "freebies" has become generic.Defendants claim that their trademark, which extends not merelyto the stylized logo of Freebies, but also to the word itself,should not be cancelled because "freebies" is notgeneric.2 Although genericness is a question of fact,resolution of this question on summary judgment is neverthelessappropriate where "the evidence is so one-sided that there canbe no doubt about how the question should be answered." DoorSys., Inc. v. Pro-Line Door Sys., Inc., 83 F.3d 169, 171 (7thCir. 1996).
A trademark registration can be cancelled at any time if theregistered mark "becomes the generic name for the goods orservices, or a portion thereof, for which it is registered."15 U.S.C.
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§ 1064(3). A party seeking cancellation of a trademarkregistration bears the burden of proving, by a preponderance ofthe evidence, that, in the minds of the consuming public, thesignificance of the registered term is the general class ofproduct. See id.; Glover v. Ampak, Inc., 74 F.3d 57, 59 (4thCir. 1996). "To become generic, the primary significance ofthe mark must be its indication of the nature or class of theproduct or service, rather than an indication of source."Glover, 74 F.3d at 59 (emphasis in original).
Trademark registration is prima facie evidence that theregistered term is not generic. See 15 U.S.C. § 1115(a);Glover, 74 F.3d at 59.3 This presumption of validity,however, serves only to shift to the party seeking to invalidatethe registration the burden of producing evidence that the termis generic. Convenient Food Mart, Inc. v. 6-Twelve ConvenientMart, Inc., 690 F. Supp. 1457 (Md. 1988), aff'd 870 F.2d 654(4th Cir. 1989) (citing Liquid Controls Corp. v. Liquid ControlCorp., 802 F.2d 934, 938 (7th Cir. 1986)). Evidence of popularunderstanding of a term may include purchaser testimony,customer surveys, dictionary listings, newspapers, and otherpublications. Magic Wand, Inc. v. RDB, Inc., 940 F.2d 638, 641(Fed. Cir. 1991).
To define the relevant purchasing public, a court must look tothe class of goods and services for which the trademark wasregistered. Glover, 74 F.3d at 59; Magic Wand, 940 F.2d at641. Defendants' "Freebies" trademark is registered for"periodicals: namely, magazines and newspapers with informationabout mail order offerings." Df. Ex. 22. Although defendantshave ceased printed publication of Freebies Magazine, they havecontinued to publish similar material on their website. We mayexpand defendants' trademark to apply to Internet publicationswith information about mail order offerings. See Jews for Jesusv. Brodsky, 993 F. Supp. 282, 300 (N.J. 1998) (findingapplication of plaintiffs trademark for use in "religiouspamphlets" to plaintiffs website on which it published the samepamphlets "a natural extension . . . in view of the newtechnology of the Internet"). Therefore, the relevant purchasingpublic in this inquiry includes Internet users seekinginformation about mail order offerings.
Plaintiffs have presented ample evidence that, among Internetusers and readers of Internet magazines, "freebies" has become ageneric term referring to free or almost free goods andservices, and that the word is not associated with defendants inparticular. Plaintiffs support their argument in several ways.First, they point to the dictionary definition of "freebie.""Though not conclusive, dictionary definitions of a word . . .are significant evidence of genericness because they usuallyreflect the public's perception of a word's meaning and itscontemporary usage." Harley-Davidson, Inc. v. Grottanelli,164 F.3d 806 (2d Cir. 1999). Plaintiffs have attached a portion ofWebster's Ninth New Collegiate Dictionary, published in 1990,which defines "freebie" as "something (as a theater ticket)given or received without charge." Pl.Ex. 6K. The Oxford EnglishDictionary defines "freebie" as "something that is providedfree," and states that the word has been in use since 1942, whenit appeared in The
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American Thesaurus of Slang: A Complete Reference Book ofColloquial Speech, authored by Lester V. Berrey and Melvin Vanden Bark (Thomas Y. Crowell ed., 1942).
Plaintiffs also extensively cite newspapers and magazines thatuse the words "freebie" or "freebies" to denote free products.Pl.Ex. 6A-D. Most significantly, plaintiffs submit evidence that"freebies" is used on thousands of other websites, see Pl.Ex.6E, demonstrating that, among Internet users in particular,"freebies" is a generic term. Finally, "freebies" appears inthousands of other domain names to indicate that a websitecontains information about obtaining free or almost freeproducts.4
Defendants do not dispute plaintiffs' evidence of widespreaduse of "freebies." Instead, they argue that their trademark isnot generic because they do not use the Freebies mark inproviding free or almost free things, but "for the non-genericpurpose of providing information about a variety of subjects,including how to obtain things by mail order from thirdparties." Defendants' Opposition to Plaintiffs' Motion forSummary Judgment at 8. Defendants' argument is totallyunsupported by the evidence and conflicts with their ownwebsite, which includes a banner stating "BRINGING YOU THE BESTFREE AND ALMOST FREE OFFERS SINCE 1977!" and describes the siteas "the best place on the web for free and almost free offersthat you won't find anywhere else." Pl.Ex. 6P. For thesereasons, we find that, in the public's mind, "freebies"indicates free or almost free products and is not identifiedwith defendants or their website in particular. Therefore,defendants cannot maintain trademark protection for their use ofthe word "freebies."5
Although "trademark rights in the stylized appearance of aword are distinct from trademark rights in the word itself,"Time, Inc. v. Petersen Pub. Co., LLC, 173 F.3d 113, 119 (2dCir. 1999), both the stylized word "Freebies" and the worditself are included in defendants' registration. Therefore, theentire trademark registration must be cancelled because"freebies" is generic. In light of this finding, plaintiffs areentitled to summary judgment on defendants' counterclaims, allof which rest on the validity of defendants' trademark.
II. The Anti-Cybersquatting Consumer Protection Act
In their complaint, plaintiffs also seek a declaration thatthe domain name registration freebie.com does not violate theACPA. The ACPA prohibits registration of a domain name that isconfusingly similar to a trademark with bad faith intent toprofit from that confusion. Because we have already founddefendants' trademark ineligible for protection, there can be noACPA violation. However, even if defendants' trademark wereentitled to protection, we find that plaintiffs' domain name,freebie.com, does not violate the ACPA, and that the decision ofthe UDRP Arbitration panelist should be reversed.
Decisions made by arbitration panels under the UDRP are notafforded
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deference by the district court. Parisi v. Netlearning, Inc.,139 F. Supp.2d 745 (E.D.Va. 2001); Eurotech, Inc. v. CosmosEuropean Travels Aktiengesellschaft, 213 F. Supp.2d 612, 617(E.D.Va. 2002) (judicial review of World Intellectual PropertyOrganization decision is de novo); see also Sallen v.Corinthians Licenciamentos LTDA, 273 F.3d 14, 20 (1st Cir.2001) ("[T]he UDRP explicitly contemplates independent review innational courts."). In this case, the arbitrator's decision isunsupported by the evidence. Therefore, it must be reversed.
The ACPA prohibits (1) registration or use of a domain namethat "is identical or confusingly similar to" or dilutive of atrademark (2) with "bad faith intent to profit from that mark."15 U.S.C. § 1125(d). As discussed above, we find thatdefendants' Freebies trademark is not entitled to protection.However, even if defendants' mark were valid, there wasinsufficient evidence before the arbitrator and in this recordto sustain a finding that plaintiff registered the domain namein bad faith.
Under the ACPA, a court must consider nine statutory factorsin determining whether plaintiffs registered their domain namein bad faith. These factors include: (1) the trademark rights ofthe plaintiffs in the offending domain name, (2) whether thedomain name contains the legal name of the plaintiffs, (3) prioruse of the domain name in connection with a bona fide business,(4) plaintiffs' bona fide noncommercial use of the mark, (5)plaintiffs' intent to divert customers, (6) plaintiffs' offer tosell the domain name, (7) plaintiffs' provision of falseregistration information, (8) plaintiffs' registration ofmultiple similar domain names, and (9) the strength ofdefendants' mark. See 15 U.S.C. § 1125(d)(1)(B)(i).
Defendants concede that statutory factors 6 and 7, that is,offers to sell the domain name and providing false or misleadingregistration information, are not present here. Althoughplaintiffs do not have trademark rights in the word "freebie" orthe domain name freebie.com, the domain name has been registeredto Retail Services since 1995. Moreover, in November 1999,Freebie, Inc. was created as a subsidiary of Retail Services.The evidence in this record clearly establishes that plaintiffsuse the domain name freebie.com in connection with a legitimatebusiness. The only similar domain name registered by plaintiffsis freebee.com.
The NAF panelist based her conclusion that plaintiff hadregistered freebie.com in bad faith on one fact: the inclusionof the word "freebies" in the meta-tag for the website,freebie.com.6 She found this metatag evidence ofplaintiffs' intent to divert defendants' customers. Thepanelist's finding that the meta-tag is evidence of plaintiffs'opportunistic bad faith is directly contradicted by the evidencethat the parties are not competitors. Plaintiffs' website,freebie.com, provides Freebie, Inc. members, nearly all of whomare Blockbuster customers, access to their Freebie Pointsaccount and the ability to redeem Freebie Points for discountson other products. Visitors to plaintiffs' website must becomemembers and can only earn Freebie Points by shopping atBlockbuster stores. Plaintiffs' website does not, therefore,compete with defendants' website, which provides generalinformation about obtaining a variety of free products. On theevidence we do not find that the freebies meta-tag was intendedto divert
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defendants' customers. Moreover, we find significant the absenceof evidence in this record of any customer confusion about thetwo different websites. Because none of the other statutoryfactors supports the conclusion that plaintiffs acted in badfaith, we find that plaintiffs have not violated ACPA, and thatthe decision of the NAF panelist must be reversed.
In their complaint, plaintiffs sought reasonable attorneys'fees and costs expended in bringing this civil action. However,this request is not addressed in plaintiffs' Motion for SummaryJudgment. Costs of bringing a civil action are normallyavailable under the Lanham Act in cases where "a violation ofany right of the registrant of a mark . . . shall have beenestablished." 15 U.S.C. § 1117(a). Because no violation of aregistered trademark has been establish, no costs are availableunder the Lanham Act.
Under the Lanham Act, prevailing defendants may recoverattorneys' fees in "exceptional" cases. Ale House Management,Inc. v. Raleigh Ale House, Inc., 205 F.3d 137, 144 (4th Cir.2000). Plaintiffs in this action, who are prevailingcounter-defendants, must show "something less than bad faith" inorder to recover attorneys' fees. Scotch Whisky Ass'n v.Majestic Distilling Co., 958 F.2d 594, 599 (4th Cir. 1992). Wefind that this case is not exceptional because, althoughcounterclaim-plaintiffs' trademark was not entitled toprotection, their conduct in attempting to protect the trademarkwas not malicious or fraudulent. Counterclaim-plaintiffs had agood faith belief, based on their trademark registration and thedecision of the UDRP arbitration panelist, that their "Freebies"trademark was entitled to protection. Although we have concludedthat it is not, we will not impose an award of attorneys' feeson them for making such a claim.
For these reasons, plaintiffs are entitled to summary judgmenton all counts of the complaint and counterclaim, but notentitled to recover their attorneys' fees. An appropriate Orderwill issue.
The Clerk is directed to forward copies of this MemorandumOpinion to counsel of record.
ORDER
For the reasons stated in the accompanying Memorandum Opinion,plaintiffs' Motion for Summary Judgment is GRANTED, and it ishereby
ORDERED that judgment be and is entered in favor of plaintiffsagainst defendants as to all counts of the complaint andcounterclaim; and it is further
ORDERED that the Trademark Registration No. 1,807,431 becancelled and removed from the Principal Register pursuant to15 U.S.C. § 1119; and it is further
ORDERED, ADJUDGED, AND DECREED that plaintiffs' use of thedomain name www.freebie.com does not violate theAnti-Cybersquatting Consumer Protection Act; and it is further
ORDERED, ADJUDGED, AND DECREED that the ruling of theArbitration Panel ordering Network Solutions, Inc. to transferthe domain name www.freebie.com to Freebies Publishing is nulland void and plaintiff Retail Services, Inc. shall retainownership of said domain name; and it is further
ORDERED, ADJUDGED, AND DECREED that plaintiffs have a right touse, in connection with their business, the domain namewww.freebies.com, and the terms "freebie" and "freebies" toidentify free or discounted merchandise and services relatedthereto, free from interference by defendants, theirrepresentatives, successors, and assigns.
The Clerk is directed to enter judgment pursuant toFed.R.Civ.P. 58 and to
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forward copies of this Order to counsel of record.
1. A meta-tag is a word or phase embedded in the HTML code ofa web page that describes the contents of the web page. Theinformation included in a meta-tag is used by search engines toindex a web page. Therefore, because plaintiffs included theplural word "freebies" in a meta-tag for their website,freebie.com, an Internet user searching for the term "freebies"would be directed to plaintiffs' site, among others.
2. The Freebies trademark is designated Mark Drawing Code 3,Design Plus Words, Letters, and/or Numbers.
3. Defendants contend that because their trademark hasattained incontestable status under 15 U.S.C. § 1065, plaintiffsare fore-closed from challenging its validity. Defendantsmisstate the law on incontestable trademarks. Although thedefenses to a claim of infringement of an incontestable mark arelimited to those enumerated in 15 U.S.C. § 1115(b), the LanhamAct permits cancellation of an incontestable mark at any time ifit has become "generic". 15 U.S.C. § 1064(3).
4. Examples include freebiesplanet.com,christianfreebies.com, freebiesforwomen.com,craftfreebies.com, christmasfreebies.com,americanfreebies.com, and financial-freebies.com.
5. If defendants used the word "freebies" in reference to adifferent class of goods or services, it might be protectable.For example, use of "freebies" to refer to additive-free foodproducts might constitute a non-generic use of the word and,therefore, qualify for trademark protection. However, becausedefendants use the word in its generic sense, to indicate thattheir website contains information about free or almost freeoffers, they are not entitled to trademark protection.
6. The NAF panelist wrote of her decision that "the resultmight well have been different had Respondent not taken theextra step of adding FREEBIES as meta-tags to its domain namewebsite." Pl.Ex. 15 at 11.