Entrepreneur: Start & Grow Your Business

Fan websites' use of trademarks in their domain names: fair or foul?


by Sherman, Joshua I.

I. INTRODUCTION

Since 1846, when the first baseball game was played in Hoboken, New Jersey, (1) baseball has occupied a central place in the hearts and minds of millions of Americans. With the birth of this truly American sport, dubbed by many as the American "national pastime," (2) came the existence of its admirers, who are referred to as fans. While baseball and its fans have had a somewhat tumultuous relationship over the years, which include a World Series corrupted by gamblers in 1919 (3) and eight work stoppages, (4) the sport and its fans always seem to gravitate back towards each other in this symbiotic relationship. Baseball needs its fans, and its fans need baseball.

The advent of the Internet fueled baseball fans' cravings; statistics and information were only a few key strokes and mouse clicks away for any baseball fan who desired them. Jim Frasch and Bryan Hoch are two examples of baseball fans who believed that they were doing their favorite sport and their fellow fans a great service by operating free websites dedicated to the New York Yankees and New York Mets Major League Baseball teams, respectively. Baseball fans loved these websites and visited them to garner information regarding their favorite baseball teams. (5)

In the summer of 2002, amid discussions of another possible player strike and suspicion of possible steroid use by its players, (6) Major League Baseball Properties ("MLBP") sent cease-and-desist letters to Hoch (7) and Frasch, (8) informing them that their websites violated applicable Internet and trademark law.

This Note demonstrates how MLBP's claims against the operators of fan-based non-profit websites lack a legal basis and discusses the danger that situations such as this pose to the future of the Internet. Part I of this Note shows how the Internet has affected baseball and its fans. Part II discusses Internet trademark law. Part III looks at Frasch's and Hoch's fan-based, non-profit websites devoted to their favorite baseball teams and MLBP's claims against them. Part IV analyzes MLBP's claims and shows why Frasch and Hoch would prevail against such claims. Part V argues that Frasch's and Hoch's use of MLBP's trademarks constituted a fair use. Part VI discusses the disparity in bargaining positions that existed between MLBP and the website operators. This Note concludes by discussing how situations such as this will affect the future of speech on the Internet.

II. THE INTERNET AND ITS EFFECT ON BASEBALL

According to Howard Goldberg, Senior Vice President of Scarborough Sports Marketing, "[t]he Internet has enabled sports fans to have more frequent and in-depth information about their favorite teams and leagues." (9) While all sports fans can use the Internet to further their interest in sports, (10) Patrick Keane, an analyst at the Jupiter Communications Internet research company, feels that more than any other sport, "baseball takes the most advantage of the [Internet's] strengths." (11) Keane's assertion is based primarily on baseball fans and what he believes is their "obsessive quest for statistics and [their] desire to constantly compare players' performances." (12)

Because of this wealth of statistics and the demonstrated fan demand for access, baseball is the major American sport best suited for the Internet, and baseball fans certainly take advantage of this fact. Howard Goldberg believes that the Internet allows baseball fans to "make their passion for the game a part of their daily li[ves]" and "keep[] up with their favorite [Major League Baseball] teams." (13) Moreover, in 1988, before most Americans had even heard of the Interact, baseball fans were using the Internet and e-mail to chat about baseball and to archive baseball information. (14) According to a Nielsen//NetRatings study of Internet usage in 1998, eighty-nine percent of baseball fans said that they had used the Internet, compared to eighty-six percent of all respondents. (15)

In 1998, Major League Baseball maintained one website for the entire League; this website devoted a small section to each team. (16) Unlike other professional sports leagues, such as the National Basketball Association and National Football League, which controlled all of their teams' websites, Major League Baseball allowed its teams to control their own websites. (17) Each team's own website, rather than the League's website, was "the best place" to learn about that team. (18) In 1998, Jupiter Communications' Patrick Keane praised Major League Baseball for not having tried to force consolidation of its team websites, noting that this policy "allowed the teams to be very aggressive in building their own [Internet] presence." (19) Many of the teams' websites even included free radio broadcasts of their teams' baseball games, which became an extremely popular feature with fans. (20)

Everything changed in January 2000 when the owners of all thirty Major League Baseball franchises unanimously voted to transfer ownership and control of their team's websites to the League "in an effort to be more economical." (21) Under the arrangement, the owners of all thirty Major League Baseball teams agreed to finance and own a newly created company, M.L.B. Advanced Media, which would have the responsibility of running the League's official website, "www.mlb.com." (22) Robert A. Bowman, whom Major League Baseball chose to run M.L.B. Advanced Media, stressed that to attract new users, he and his 120 employees needed to ensure that the League's new website contained team webpages that were "hard-hitting" and maintained their "local" feel. (23) While most of the content on the new official site was still free, some content was accessible only for a fee, including radio and video broadcasts of games. (24)

While Major League Baseball's Internet presence has grown every year, so has the League's international standing. In 2000, foreign-born players comprised twenty-four percent of the opening day rosters of Major League Baseball teams, with 198 players representing sixteen different countries as well as Puerto Rico. (25) Due in large part to these international players, Major League Baseball has fans spanning the globe. (26) These international fans have enhanced baseball's presence on the Internet because they use the Internet to follow their countrymen who are playing baseball in the United States. (27)

After adding Japanese stars Ichiro Suzuki and Kazuhiro Sazaki to their roster, the Seattle Mariners' website became more popular than any other Major League Baseball team's website because of the added Internet traffic provided by Japanese fans. (28) The Mariners even created a Japanese version of their website. (29) In fact, the Seattle Mariners were so popular in Japan that Internet giant Amazon.com launched a Seattle Mariners store on its Japanese website. (30) When the league enabled fans to cast online votes for its annual All-Star game, (31) Ichiro Suzuki received more All-Star-votes than any other Major League player in 2001 and 2002. (32) Many of Ichiro's votes were cast across the Pacific Ocean by Japanese fans voting online. (33)

Problems associated with the game even failed to diminish Major League Baseball's standing on the Internet. In 2002, T.S. Kelly, director and principal analyst at NetRatings, Inc., believed that despite all of the challenges facing Major League Baseball, including the possibilities of a work stoppage, team contraction, and players' steroid use, "Major League Baseball's online presence ha[d] never been stronger." (34)

With baseball fans in the United States as well as all over the world using the Internet to follow Major League Baseball and enhance their interest in the game, baseball was conquering the Internet. M.L.B. Advanced Media, which owned the League's official website, "www.mlb.com," saw its revenues grow from $36 million in 2001 to $91 million in 2003. (35) In fact, in March 2004, M.L.B. Advanced Media was valued at more than $1 billion and rumors circulated that the League was considering selling off a piece of the company in a public offering. (36) Given the economics involved with its Internet business, one can begin to see why the League might not hesitate to go to any means necessary to protect its valuable Internet property.

III. TRADEMARKS, THE INTERNET, AND THE LAW

To access a baseball website, or any website for that matter, one must know that site's Internet address; these Internet addresses are referred to as domain names. (37) To access a particular website, one can simply type that website's domain name into her computer's Internet browser and she will be directed to that website. (38) A domain name is usually comprised of a simple name, phrase, or trademark associated with the particular site so that Internet users can easily remember it and enter it into their Internet browsers. (39) For example, the New York Mets use "www.Mets.com" as their domain name. (40) Having the right domain name is crucial for businesses looking to establish an online presence. (41) Therefore, domain names can be the source of much contention.

Problems arise when people register the well-known names and marks of others as domain names before the rightful owners of these names and marks are able to do so. This conduct is called cybersquatting, and it blocks the actual owner of the trademark from registering it as an Internet domain name. (42) Dennis Toeppen became the first well-known cybersquatter when he personally registered the domain names "deltaairlines.com," "eddiebauer.com," and "neiman-marcus.com," among others. (43)

A website that uses another company's mark in its domain name may lead people who visit the site to mistakenly believe that an affiliation exists between the website and the owner of the mark. (44) Thus, the operator or registrant of the website is "trading upon the goodwill and fame associated with the [marks] for [his] own profit." (45) Furthermore, a cybersquatter will often use a person's or company's mark in a domain name solely because the cybersquatter hopes that he will subsequently be able to sell that domain name back to the rightful owner of the mark for a hefty profit. (46)

Existing statutes like the Lanham Act (47) and the Federal Trademark Dilution Act (48) ("FTDA") failed to adequately address the use of trademarks on the Internet and cybersquatting. (49) Consequently, there were cries for new legislation in this area. (50) In 1997, the Clinton Administration strongly believed that governance of the Internet should be consistent worldwide. (51) Therefore, in 1998, the U.S. Department of Commerce went to the World Intellectual Property Organization ("WIPO") to develop a uniform trademark and cybersquatting resolution. (52) WIPO created a nonprofit international corporation called the Internet Corporation for Assigned Names and Numbers ("ICANN"). (53) ICANN is comprised of Internet stakeholders from the private sector and "exists to develop and administer international policy for domain names." (54)

ICANN created the Uniform Domain Name Dispute Resolution Policy ("UDRP") to address disputes over the ownership of domain names and to provide an alternative to litigation, which was often expensive and sluggish. (55) The ICANN UDRP governs all domain names that end in ".com," ".org," and ".net." (56) Thus, all websites whose domain names end in these suffixes must be operated in accordance with the UDRP's provisions. If there is a dispute concerning a domain name, according to Paragraph 4(a) of the UDRP, the Complainant has the burden of proving to a WIPO panel that:

(i) The domain name at issue "is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;" and

(ii) the Respondent has "no rights or legitimate interests in respect of the domain name;" and

(iii) the domain name at issue "has been registered and is being used in bad faith." (57)

Paragraph 4(b) of the UDRP provides that the following circumstances, if found by the Panel, (58) shall be evidence of bad faith: (59)

(i) [C]ircumstances indicating that [the Respondent has] registered or [has] acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

(ii) [the Respondent has] registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the Respondent has engaged in a pattern of such conduct; or

(iii) [the Respondent has] registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) that by using the domain name, [the Respondent has] intentionally attempted to attract, for commercial gain, Internet users to [the Respondent's] web site or other online location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of [the Respondent's] web site or location or of a product or service on [the Respondent's] web site or location. (60)

Soon after the adoption of the UDRP, Congress stepped in amid all the calls for reform regarding cybersquatting and the use of trademarks on the Internet, and enacted the Anticybersquatting Consumer Protection Act ("ACPA"). (61) The ACPA amended the Lanham Act by providing that a person can be found liable as a cybersquatter "if that person has a bad faith intent to profit from another's mark, or the personal name of another that is used as a mark, and registers or uses a domain name that is identical or confusingly similar to that mark." (62) Therefore, to be liable under the UDRP or the ACPA, bad faith must be present. (63) The ACPA provides courts with a detailed list of factors to consider when looking for the presence of bad faith. (64) These factors include:

(I) [T]he trademark or other intellectual property rights of the person, if any, in the domain name;

(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

(V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;

(VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct;

(VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;

(VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous. (65)

When determining whether a mark is distinctive and famous, courts consider the degree of the mark's distinctiveness, the duration and extent of the mark's private and public use by its owner, the mark's degree of recognition, as well as other factors. (66)

Under the ACPA, bad faith intent "shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful." (67) This provision is the ACPA's safe harbor provision and courts can apply it when imposing liability upon the registrant seems unfair or unjust. Congress created the safe harbor to ensure that innocent domain holders would not be punished under the ACPA if bad faith were not present. (68)

The ACPA does not require that a mark be famous to be protected from dilution; therefore, a merely distinctive mark will suffice. (69) Moreover, the ACPA does not require actual commercial use of the trademark-domain name. Thus, cybersquatters who register domain names containing others' marks but do not construct websites for these domain names are still liable under the ACPA. Previously, cybersquatters who "warehoused" a large number of domain names that were similar to other trademarks but did not sell the domain names were able to evade liability under the Lanham Act and the FTDA. (70) Under the ACPA, multiple registration of domain names is a factor that courts can use when determining whether bad faith intent is present. (71)

The ACPA also simplified the process of obtaining jurisdiction for trademark holders, (72) conferring upon courts the power to transfer, forfeit, or cancel the registrant's domain name, (73) and permitting trademark holders to receive statutory damages in connection with any domain name with which bad faith is associated. (74)

IV. METSONLINE.NET AND BRONX-BOMBERS.COM

In 1996, a fourteen-year-old New York Mets fan named Bryan Hoch created "www.MetsOnline.net," a website that featured "original editorial and multimedia content devoted" entirely to the Mets. (75) Hoch actually created his Mets website before the Mets' own official site even existed. (76) From 1996 to 2002, with the help of a group of unpaid writers, the coverage of the Mets on "www.MetsOnline.net" was more in-depth than that featured on the Mets' official website, "www.Mets.com." (77) Hoch's Mets site featured articles, archives, analysis, fan discussion forums, as well as links to other related sites. (78) Hoch's site averaged between 10,000 and 15,000 visitors per day, and was featured in The Wall Street Journal, New York Newsday, MSNBC, ESPN's website and The New York Daily News, among other sources. (79) Hoch even wrote for the Mets' official team website, "www.Mets.com," before Major League Baseball took control of the official websites of all thirty teams. (80)

Hoch's site contained a small disclaimer indicating that the website had no affiliation with the New York Mets or with Major League Baseball. (81) While Hoch's site sold merchandise at one point, Hoch maintains that such sales were minimal, totaling only sixteen dollars. (82) Notably, the source of twelve of the sixteen dollars garnered from merchandise sales was Hoch's girlfriend. (83) According to Hoch, he earned no profits from his website. (84) However, he indicated that had he made any profits in 2002, he would have donated them to charities related to the tragic events of September 11, 2001. (85)

On July 25, 2002, Hoch, who was then a college student at the State University of New York at Rockland, received an e-mail from MLBP. (86) The e-mail was a cease-and-desist order that directed Hoch to "deactivate MetsOnline.net and transfer its domain name, as well as all information regarding its operations, to MLBP effective 5 p.m. July 30." (87) In its e-mail, MLBP explained that Hoch's "registration of www.MetsOnline.net violate[d] the [ACPA]," because:

* Hoch ha[d] "no trademark right in the Mets' Marks;" (88)

* Hoch's "intent in registering www.metsonline.net was to divert consumers from the online location of the Mets to [his] own;" (89)

* Hoch ha[d] "intentionally failed to maintain accurate contact information for www.metsonline.net;" (90) and

* Given the "famous nature of the Mets' Marks, it [was] clear that [Hoch] registered and used www.metsonline.net with a bad faith intent to profit." (91)

Consequently, MLBP concluded that Hoch's "registration and use of www.metsonline.net establishe[d] a violation of the ACPA and other federal and state laws." (92) MLBP demanded that Hoch:

(1) Cease and desist from all use of the domain name www.metsonline.net and transfer that domain name to MLBP;

(2) Cease and desist from all unlawful use of the Mets' Marks and any other indicia that creates the impression that there is an association between [his] company and the Mets and/or MLBP and confirm to MLBP, in a writing signed by an officer of [his] company, that it has done so;

(3) Cease and desist from the sale of unanthorized merchandise featuring the Mets' Marks and fully disclose in writing the extent of [his] company's sales of this infringing merchandise, including the number of goods sold and the prices at which they were sold, the remaining inventory of the infringing merchandise, as well as the names, addresses and telephone numbers of the supplier(s) of such merchandise. (93)

MLBP also explained that it intended to collect "appropriate compensation for [Hoch's] company's unauthorized use of the Mets' Marks." (94)

In 2000, Jim Frasch began operating his own fan website dedicated to the New York Yankees. (95) By 2002, Frasch's site was receiving over one million visits per month. (96) While Frasch sold advertising on his site, "www.Bronx-Bombers.com," he indicated that the advertising revenue he received usually was not even sufficient to cover the site's operating costs. (97) Frasch also noted that he would donate any profits he earned to Yankees Pitcher Mike Mussina's charity. (98)

On August 5, 2002, MLBP contacted Frasch (99) and informed him that his use of MLBP's "Bronx Bombers" mark in his site's domain name was in violation of the ICANN UDRP (100) and the ACPA. (101) MLBP also stated that Frasch's "www.BronxBombers.com" domain name was "virtually identical" to MLBP's Bronx Bombers marks and that this similarity would likely cause someone visiting Frasch's website "to believe that it [was] authorized or sponsored by MLBP or the [Yankees baseball] club." (102) MLBP then noted that Frasch violated the club's trademark rights through his use of the "Bronx Bombers" marks on his website, and explained that this use "suggest[ed] a false affiliation, association and/or sponsorship between the Club and [Frasch's website]" that could mislead consumers. (103) MLBP also stated that Frasch's "conduct deceiv[ed] the public and [was] in violation of both federal and state unfair competition laws." (104) MLBP further asserted that the "name of [Frasch's] company, Bronx Bombers Online LLC, violate[d] federal and state trademark law because the BRONX BOMBER term in that name infringe[d] and dilute[d] the ... mark." (105)

After noting that it "value[d] [Frasch's] First Amendment rights and appreciate[d] [his] support of the Club," (106) MLBP demanded that Frasch:

(1) [C]ease and desist all use of the domain name www.bronxbombers.com,

(2) cease use of the BRONX BOMBERS mark in [his] corporate name,

(3) transfer the domain name to the Club, the owner of the BRONX BOMBERS [m]arks,

(4) cease all unlawful use and/or display of the BRONX BOMBERS [m]arks on the Site, and

(5) provide an accounting of all revenue obtained in connection with the operation of the web site at www.bronxbombers, com. (107)

In 2000, when the Mets and Yankees squared off in an all-New York World Series, ESPN the Magazine selected Hoch's and Frasch's sites as the best Mets and Yankees fan websites, respectively. (108) Yet less than two years later, MLBP asked these sites to change or cease to exist. (109)

Hoch, who did not wish to surrender his perceived freedom of content, shut down his site, and was referred to as "the Patrick Henry of cyberspace fan sites." (110) He maintained that his popular website would still exist were it not for the letter he received from MLBP, (111) and thanked the Mets organization for the "support" they had always given him. (112) It did not take Hoch long to find work covering the Mets on the Internet after he shut down his site; he was hired shortly thereafter to write about the Mets for Fox Sports's website. (113)

Frasch also felt strongly that he had used his domain name for a "legitimate purpose." (114) However, without spending thousands of dollars on legal fees to find out if he was correct, he could not challenge MLBP's claims. Frasch and MLBP reached a "compromise," (115) wherein Frasch had to surrender the "www.Bronx-Bombers.com" domain name to MLBP but was allowed to maintain his site at another domain name; notwithstanding the agreement, Frasch believed that MLBP had not "conceded anything." (116) Frasch's Yankees site can now be found at "www.NYYFans.com." (117)

V. ANALYSIS OF MLBP'S CLAIMS

In its letter to Frasch, MLBP cited to NCAA v. Halpern (118) as support for its contention that Frasch's "use of the BRONX BOMBERS Marks in [his] domain name violate[d] the ICANN [UDRP]." (119) However, upon a reading of NCAA, it is clear that NCAA is not binding over the dispute between Frasch and MLBP. In NCAA, the Respondents used the NCAA's marks in ten different domain names, which, when accessed, directed consumers to purely commercial websites that sold tickets to college basketball games. (120) The Respondents openly sought to make a profit from these websites using the NCAA's marks. (121) In total, the Respondents owned approximately one thousand different domain names that directed consumers to their ticket-selling website. (122) These facts alone show bad faith.

Hoch and Frasch have nothing in common with the Respondents in NCAA regarding the issue of bad faith. Hoch and Frasch each owned just one domain name at issue. More importantly, their websites were not commercial in nature, and neither Hoch nor Frasch profited from his website.

In its letter to Frasch, MLBP also cited to Caterpillar Inc. v. Telescan Techs., L.L.C. (123) to show that Frasch had violated the ACPA. However, like NCAA, when one looks at the facts in Caterpillar, it is clear that this case does not control the dispute involving Frasch, Hoch, and MLBP.

In Caterpillar, the Defendant TeleScan had "registered over [fifty] domain names that contain[ed] famous marks of various companies like John Deere, General Motors, Toyota, and Peterbilt." (124) Six of these domain names contained the marks of Plaintiff Caterpillar, a heavy equipment company. (125) The court found that by using these disputed domain names, Defendant TeleScan had unfairly traded upon Caterpillar's goodwill to promote its own services and divert Internet traffic and potential customers to its own commercial website. (126)

The court found that Defendant TeleScan was guilty of bad faith under the ACPA. (127) Furthermore, as if the fact that TeleScan "had registered multiple domain names which contain[ed] famous marks" was not dispositive enough with respect to the issue of bad faith, the court also noted that at the time when the Caterpillar case was decided "at least one [other] court had already found [that] TeleScan's registration of domain names containing famous marks violated [the] Lanham Act." (128)

It is quite obvious that Hoch and Frasch have nothing in common with the Defendant in Caterpillar. TeleScan was guilty of "warehousing" domain names that contained famous marks and used these domain names to direct consumers to its own commercial site, diverting these consumers from Caterpillar's own site. (129) Hoch and Frasch each only operated one website at issue here and did not do so for the purpose of making profits. (130) Through their websites, they took no business away from MLBP or either club.

Hoch and Frasch are simply baseball fans. A fan is defined as an "enthusiastic follower or admirer." (131) A club is defined as "a group of persons associated for a common purpose" or "the meeting place of such a group." (132) A fan club would therefore be considered to be a group of fans that associate together because of and in furtherance of their common enthusiasm for the object that they admire. The Internet is a logical locale for fans and fan clubs because it is a medium in which people who do not know each other or live near each other can interact based on the strong feelings that they share for something. In this case, the object of their interest is a particular baseball team.

Hoch's and Frasch's websites should be categorized as fan or fan club websites because of the manner in which they are devoted to the Mets and Yankees. These websites were places where Mets and Yankees fans could go to get information about their favorite teams as well as interact with fellow fans. Because the websites at issue are analogous to fan club websites, cases dealing with fans and fan clubs websites should be controlling here.

One WIPO case involving a fan club website is Estate of Shakur v. Barranco. (133) In Shakur, the Respondent owned the domain names "www.tupac.com" and "www.tupac.net" and used them as the location for a fan club website dedicated to the late hip-hop music artist Tupac Shakur. (134) According to the Respondent, the website was "a fan-based website" devoted to Shakur that "contain[ed] over 400 pages of information." (135) The purpose of his website was to "provide news and information" regarding Shakur and his music. (136)

Under the ICANN UDRP, the Complainant must prove that the Respondent has no rights or legitimate interests with respect to the domain name, and that the domain name has been registered in bad faith and is being used in bad faith. (137) In Shakur, the tribunal upheld the use of a domain name for fan club purposes because it found that the Respondent had a legitimate interest in the domain names and that bad faith was not present. (138) The fan website was free of charge for users, was not commercial in nature, did not misleadingly divert c