The popular apparel and home products company, Lands' End, Inc., brought a case in the U.S. District Court for the Western District of Wisconsin concerning matters of typosquatting. Lands' End's allegations against the defendants included violations of the Anticybersquatting Consumer Protection Act ("ACPA") and false advertising under Section 1125(a) of the Lanham Act. The defendants brought a motion for summary judgment, which the court granted in part and denied in part.
Defendants participated in an affiliate program in which they were able to link to Lands' End's website, and when a consumer purchased products from Lands' End by connecting to www.landsend.com from the defendants' site, the defendants received a 5% commission on the purchase. However, although they were required to disclose information regarding all of the sites they proposed to link to Lands' End's website, the defendants did not do so. In fact, they devised an intricate scheme in which they registered numerous similar domains such as www.lnadsend.com, www.landsende.com, and www.landsennd.com. When a customer attempted to access the official Lands' End website but accidentally typed the name of one of defendants' websites into a web browser, the browser would appear to take the customer directly to the Lands' End website. In reality, the browser would link the customer "invisibly" to defendants' authorized affiliate websites. Thus, the defendants would receive a 5% commission on any purchases made by the unsuspecting consumer.
In order to succeed on its ACPA claim, Lands' End must prove that (1) "Lands' End" is a distinctive or famous mark entitled to protection (this was easy as defendants conceded that "Lands' End" was a registered trademark); (2) defendants' domain names are "identical or confusingly similar to" Lands' End's mark (once again, this was easy to show since the defendants' domain names deviated from Lands' End's by only one letter in the majority of cases); and (3) defendants registered the domain names with the bad faith intent to profit from them. 15 U.S.C. 1125(d).
The court noted that this was not a typical cybersquatting situation in which someone registers a well-known mark as a domain name and then attempts to sell that domain name to the rightful owner - a kind of extortion scheme. However, while the defendants argued that, because their typosquatting scheme directed traffic to Lands' End's website rather than away from it, they did not act with bad faith, the court determined that they, nonetheless, intended to profit from their ownership of illicit domain names. The court analyzed each of the nine bad faith factors set forth in Section 1125(d)(1)(B)(i), and came to the conclusion that the defendants' conduct satisfied a number of them (e.g. defendants never used their infringing domain names as trademarks, and have no intellectual property rights in them). Hence, the district court denied defendants' summary judgment motion with respect to the ACPA claim, and left the question of bad faith for determination by the finder of fact.
False Advertising Claim
To prove false advertising under Section 1125(a) of the Lanham Act, Lands' End must show that defendants
(1) made a false or misleading statement, (2) that deceived or was likely to deceive a substantial segment of the audience to whom defendants advertised, (3) on a subject material to the consumer's decision to purchase the advertised goods, (4) touting goods entering interstate commerce, (5) and that resulted in actual or probable injury to plaintiff.
On its face, this claim fails since the defendants never made any actual "statements" to the consumers who simply accessed their domain names by accident, and because they never "advertised" to anyone. In fact, as the court aptly notes, "defendants profited from their typosquatting scheme . . . by not publicizing their venture." Hence, the district court granted the defendants' summary judgment motion based on the false advertising claim.
Lands' End, Inc. v. Remy, et al., 2006 WL 2521321 (W.D. Wis., Sept. 1, 2006).