Kemp Klein

Cyber Squatting Damages Affirmed

Winter 2003

The Sixth Circuit Court of Appeals recently affirmed a decision by the United States District Court, Eastern District of Michigan, upholding an award of damages in favor of Ford Motor Company against an employee who registered the internet domain name “” and then subsequently tried to sell it to Ford. This action was held to violate the Anti-Cyber Squatting Consumer Protection Act of 1999 (“ACPA”), per the U.S. Court of Appeals Sixth Circuit Ruling. See Ford Motor Co. v. Catalanotte, 6th Cir, No. 02-1237, 82803.

The fact that the defendant registered the name prior to passage of the federal statute involved, and never operated a website using the domain name, did not matter. He violated the law when he tried to sell the name to Ford. Per the court:

"Registering a famous trademark as a domain name and then offering it for sale to the trademark owner is exactly the wrong Congress intended to remedy when it passed the ACPA."

Apparently, the domain name was registered in January 1997, at a point in time when defendant Catalanotte knew Ford published an employee newspaper called “Ford World.” Catalanotte sent an email to two Ford officials in October of 2000 stating:

"The domain name will be available for a short period of time... I have been receiving offers from various sources, including the competition. I have indicated to the other interested parties that I am extending this opportunity to you first before any decisions are to be made."

The ACPA prohibits registering, trafficking and/or using a domain name that is identical to or confusingly similar with a distinctive trademark. The defendant must have a “bad faith intent to profit” to be liable. The statute applies to all domain names, regardless of whether registered before, on or after the date the statute was enacted (November 29, 1999). However, actual and statutory damages are not available for violations that occurred prior to that date.

In rejecting the defenses asserted based upon the fact that Catalanotte had registered the domain name prior to enaction of the statute, the court held that “registering,” “trafficking” and “using” a domain name are each separate offenses. Thus, the fact that the domain name was registered before the passage of the statute did not serve as a defense to a claim for liability for subsequent trafficking or use.

For further information regarding these matters, please contact Mr. Castelli at 248 740 5668 or via email.