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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
------------------------------------------------*
BARCELONA.COM, INCORPORATED,
Plaintiff-Appellant,
v.No. 02-1396
EXCELENTISIMO AYUNTAMIENTO DE
BARCELONA,
Defendant-Appellee.
------------------------------------------------*
Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Claude M. Hilton, Chief District Judge. (CA-00-1412)
Argued: February 28, 2003
Decided: June 2, 2003
Before WILKINSON, NIEMEYER, and MOTZ, Circuit Judges.
____________________________________________________________
Reversed, vacated, and remanded by published opinion. Judge Nie-
meyer wrote the opinion, in which Judge Wilkinson and Judge Motz
joined.
____________________________________________________________
COUNSEL
ARGUED: Larry Zinn, San Antonio, Texas, for Appellant. Jordan
Scot Weinstein, OBLON, SPIVAK, MCCLELLAND, MAIER &
NEUSTADT, P.C., Arlington, Virginia, for Appellee. ON BRIEF:
Jonathan Hudis, OBLON, SPIVAK, MCCLELLAND, MAIER &
NEUSTADT, P.C., Arlington, Virginia, for Appellee.
____________________________________________________________
OPINION
NIEMEYER, Circuit Judge:
Barcelona.com, Inc. ("Bcom, Inc."), a Delaware corporation, com-
menced this action under the Anticybersquatting Consumer Protection
Act against Excelentisimo Ayuntamiento de Barcelona (the City
Council of Barcelona, Spain) for a declaratory judgment that Bcom,
Inc.'s registration and use of the domain name <barcelona.com> is
not unlawful under the Lanham Act (Chapter 22 of Title 15 of the
United States Code). The district court concluded that Bcom, Inc.'s
use of <barcelona.com> was confusingly similar to Spanish trade-
marks owned by the City Council that include the word "Barcelona."
Also finding bad faith on the basis that Bcom, Inc. had attempted to
sell the <barcelona.com> domain name to the City Council for a
profit, the court ordered the transfer of the domain name to the City
Council.
Because the district court applied Spanish law rather than United
States law and based its transfer order, in part, on a counterclaim that
the City Council never filed, we reverse the judgment of the district
court denying Bcom, Inc. relief under the Anticybersquatting Con-
sumer Protection Act, vacate its memorandum opinion and its order
to transfer the domain name <barcelona.com> to the City Council,
and remand for further proceedings consistent with this opinion.
I
In 1996, Mr. Joan Nogueras Cobo ("Nogueras"), a Spanish citizen,
registered the domain name <barcelona.com> in the name of his wife,
also a Spanish citizen, with the domain registrar, Network Solutions,
Inc., in Herndon, Virginia. In the application for registration of the
domain name, Nogueras listed himself as the administrative contact.
When Nogueras met Mr. Shahab Hanif, a British citizen, in June
1999, they developed a business plan to turn <barcelona.com> into a
tourist portal for the Barcelona, Spain, region. A few months later
they formed Bcom, Inc. under Delaware law to own <barcelona.com>
and to run the website, and Nogueras, his wife, and Hanif became
Bcom, Inc.'s officers. Bcom, Inc. was formed as an American com-
pany in part because Nogueras believed that doing so would facilitate
2
obtaining financing for the development of the website. Although
Bcom, Inc. maintains a New York mailing address, it has no employ-
ees in the United States, does not own or lease office space in the
United States, and does not have a telephone listing in the United
States. Its computer server is in Spain.
Shortly after Nogueras registered the domain name <barcelo-
na.com> in 1996, he placed some Barcelona-related information on
the site. The site offered commercial services such as domain registry
and web hosting, but did not offer much due to the lack of financing.
Before developing the business plan with Hanif, Nogueras used a
web-form on the City Council's official website to e-mail the mayor
of Barcelona, Spain, proposing to "negotiate" with the City Council
for its acquisition of the domain name <barcelona.com>, but Nogu-
eras received no response. And even after the development of a busi-
ness plan and after speaking with potential investors, Nogueras was
unable to secure financing to develop the website.
In March 2000, about a year after Nogueras had e-mailed the
Mayor, the City Council contacted Nogueras to learn more about
Bcom, Inc. and its plans for the domain name <barcelona.com>.
Nogueras and his marketing director met with City Council represen-
tatives, and after the meeting, sent them the business plan that was
developed for Bcom, Inc.
On May 3, 2000, a lawyer for the City Council sent a letter to
Nogueras demanding that Nogueras transfer the domain name <barce-
lona.com> to the City Council. The City Council owned about 150
trademarks issued in Spain, the majority of which included the word
Barcelona, such as "Teatre Barcelona," "Barcelona Informacio I Gra-
fic," and "Barcelona Informacio 010 El Tlefon Que Ho Contesta Tot."
Its earlier effort in 1995 to register the domain name <barcelona.es>,
however, was unsuccessful. The City Council's representative
explained, "It was denied to Barcelona and to all place names in
Spain." This representative also explained that the City Council did
not try also to register <barcelona.com> in 1995 even though that
domain name was available because "[a]t that time . . . the world
Internet that we know now was just beginning and it was not seen as
a priority by the City Council." The City Council now took the posi-
3
tion with Bcom, Inc. that its domain name <barcelona.com> was con-
fusingly similar to numerous trademarks that the City Council owned.
A couple of days after the City Council sent its letter, Nogueras
had the domain name <barcelona.com> transferred from his wife's
name to Bcom, Inc., which he had neglected to do in 1999 when
Bcom, Inc. was formed.
Upon Bcom, Inc.'s refusal to transfer <barcelona.com> to the City
Council, the City Council invoked the Uniform Domain Name Dis-
pute Resolution Policy ("UDRP") promulgated by the Internet Corpo-
ration for Assigned Names and Numbers ("ICANN") to resolve the
dispute. Every domain name issued by Network Solutions, Inc. is
issued under a contract, the terms of which include a provision requir-
ing resolution of disputes through the UDRP. In accordance with that
policy, the City Council filed an administrative complaint with the
World Intellectual Property Organization ("WIPO"), an ICANN-
authorized dispute-resolution provider located in Switzerland. The
complaint sought transfer of the domain name <barcelona.com> to
the City Council and relied on Spanish law in asserting that Bcom,
Inc. had no rights to the domain name while the City Council had
numerous Spanish trademarks that contained the word "Barcelona."
As part of its complaint, the City Council agreed "to be subject to the
jurisdiction of the registrant[']s residence, the Courts of Virginia
(United States), only with respect to any challenge that may be made
by the Respondent to a decision by the Administrative Panel to trans-
fer or cancel the domain names that are [the] subject of this com-
plaint."
The administrative complaint was resolved by a single WIPO pan-
elist who issued a ruling in favor of the City Council on August 4,
2000. The WIPO panelist concluded that <barcelona.com> was con-
fusingly similar to the City Council's Spanish trademarks, that Bcom,
Inc. had no legitimate interest in <barcelona.com>, and that Bcom,
Inc.'s registration and use of <barcelona.com> was in bad faith. To
support his conclusion that Bcom, Inc. acted in bad faith, the WIPO
panelist observed that the only purpose of the business plan was "to
commercially exploit information about the City of Barcelona . . . par-
ticularly . . . the information prepared and provided by [the City
Council] as part of its public service." The WIPO panelist ordered
4
that Bcom, Inc. transfer the domain name <barcelona.com> to the
City Council.
In accordance with the UDRP's provision that required a party
aggrieved by the dispute resolution process to file any court challenge
within ten business days, Bcom, Inc. commenced this action on
August 18, 2000 under the provision of the Anticybersquatting Con-
sumer Protection Act (the "ACPA") that authorizes a domain name
owner to seek recovery or restoration of its domain name when a
trademark owner has overstepped its authority in causing the domain
name to be suspended, disabled, or transferred. See 15 U.S.C.
§ 1114(2)(D)(v). Bcom, Inc.'s complaint sought a declaratory judg-
ment that its use of the name <barcelona.com> "does not infringe
upon any trademark of defendant or cause confusion as to the origin,
sponsorship, or approval of the website <barcelona.com>; . . . [and]
that [the City Council] is barred from instituting any action against
[Bcom, Inc.] for trademark infringement." While the City Council
answered the complaint and stated, as an affirmative defense, that the
court lacked jurisdiction over the City Council for any cause of action
other than Bcom, Inc.'s "challenge to the arbitrator's Order issued in
the UDRP domain name arbitration proceeding," the City Council
filed no counterclaim to assert any trademark rights.
Following a bench trial, the district court entered a memorandum
opinion and an order dated February 22, 2002, denying Bcom, Inc.'s
request for declaratory judgment and directing Bcom, Inc. to "transfer
the domain name barcelona.com to the [City Council] forthwith." 189
F. Supp. 2d 367, 377 (E.D. Va. 2002). Although the district court con-
cluded that the WIPO panel ruling "should be given no weight and
this case must be decided based on the evidence presented before the
Court," the court proceeded in essence to apply the WIPO panelist
opinion as well as Spanish law. Id. at 371. The court explained that
even though the City Council did not own a trademark in the name
"Barcelona" alone, it owned numerous Spanish trademarks that
included the word Barcelona, which could, under Spanish law as
understood by the district court, be enforced against an infringing use
such as <barcelona.com>. Id. Adopting the WIPO panelist's decision,
the court stated that "the WIPO decision was correct in its determina-
tion that [Bcom, Inc.] took `advantage of the normal confusion' of an
Internet user by using the `Barcelona route' because an Internet user
5
would `normally expect to reach some official body . . . for . . . the
information.'" Id. at 372. Referring to the facts that Bcom, Inc.
engaged in little activity and attempted to sell the domain name to the
City Council, the court concluded that "these factors clearly demon-
strate a bad faith intent on the part of the Plaintiff and its sole share-
holders to improperly profit from their registration of the domain
name barcelona.com." At bottom, the court concluded that Bcom, Inc.
failed to demonstrate, as required by 15 U.S.C. § 1114(2)(D)(v), that
its use of <barcelona.com> was "not unlawful." Id. at 373.
In addition to concluding that Bcom, Inc. failed to establish its
claim, the court stated that it was also deciding the City Council's
counterclaim for relief under 15 U.S.C. § 1125 and determined that
"the Spanish trademark `Barcelona' is valid for purposes of the
ACPA." Id. at 374. Applying the factors of 15 U.S.C.
§ 1125(2)(d)(1)(B)(i), the court found that Nogueras and his wife
acted with "bad faith intent" in registering <barcelona.com> as a
domain name. Id. at 374-76. The court also found that <barcelo-
na.com> "is confusingly similar to the defendant's mark." Id. at 376.
From the district court's order of February 22, 2002, Bcom, Inc.
filed this appeal.
II
Bcom, Inc. contends that when it "sought a declaration under 15
U.S.C. § 1114(2)(D)(v), it was entitled to have its conduct judged by
U.S. trademark law, not Spanish trademark law." It argues that even
if Spanish law applies, however, a party cannot, under Spanish law,
"get a registration for a term that is only geographically descriptive,
such as the word `Barcelona.'" Finally, it maintains that its use of the
domain name was not unlawful under United States trademark law
because it could not be found to have acted in bad faith under § 1125,
as the district court concluded.
The City Council contends that the WIPO panelist's decision,
including its reference to Spanish law, must be considered to decide
this case. It argues:
6
[T]rial courts may consider rights in foreign trademarks
which were asserted in the transfer decision under review.
The [WIPO] administrative transfer proceeding itself gives
the district court both subject matter and personal jurisdic-
tion; jurisdiction is not dependent upon allegations of U.S.
trademark rights. Therefore, failure to consider the basis for
the administrative decision would remove the basis for juris-
diction, and require dismissal of the case. The statute lan-
guage does not limit the marks considered to U.S. marks.
* * *
To hold otherwise would be to strip a trademark owner of
its foreign rights whenever it is haled into court by a U.S.
domain name owner who has lost a UDRP administrative
proceeding. Without the ability to assert their rights, foreign
trademark owners would automatically lose such proceed-
ings, creating an unintended and unjust result.
The City Council also maintains that the district court's conclusions
of confusing similarity and bad faith were factually supported and jus-
tified.
In light of the City Council's argument that "failure to consider the
basis for the [WIPO] decision would remove the basis for [this
court's] jurisdiction," we will review first the basis for our jurisdiction
and the role of the WIPO panelist's administrative decision.
Bcom, Inc.'s complaint, brought in the Eastern District of Virginia
where the domain name <barcelona.com> was registered with Net-
work Solutions, Inc., originally asserted three claims in three separate
counts: a claim for declaratory judgment and injunctive relief under
15 U.S.C. § 1114(2)(D)(v); a claim for fraud and unfair competition;
and a claim for tortious interference with prospective economic
advantage. In response to the City Council's motion to dismiss on
various jurisdictional grounds, Bcom, Inc. voluntarily dismissed all
claims except its claim under § 1114(2)(D)(v). After the district court
denied the City Council's motion to dismiss, the City Council filed
an answer, stating as one of its affirmative defenses:
7
This court lacks jurisdiction over Defendant regarding any
cause of action other than Plaintiff's challenge to the arbitra-
tor's Order issued in the UDRP domain name arbitration
proceeding.
This statement reflects the City Council's stipulation that when it filed
the WIPO administrative claim in Switzerland, "the City Council
agreed to be subject to the jurisdiction of `the Courts of Virginia
(United States), only with respect to any challenge that may be made
by the Respondent to a decision by the Administrative Panel to trans-
fer or cancel the domain names that are [the] subject of this com-
plaint.'" Accordingly, at least with respect to a claim brought under
§ 1114(2)(D)(v), the City Council agrees that the district court had
personal jurisdiction over the City Council.
The district court had subject matter jurisdiction based on the fact
that this case was brought under the Lanham Act, as amended by the
ACPA, and that §§ 1331 and 1338 of Title 28 confer jurisdiction over
such claims.
Apparently, the City Council does not dispute these jurisdictional
observations as far as they go. It contends, however, that jurisdiction
to hear a claim under § 1114(2)(D)(v) rests on a recognition of the
WIPO proceeding and the law that the WIPO panelist applied.
Although we agree with the City Council that the WIPO proceeding
is relevant to a claim under § 1114(2)(D)(v), it is not jurisdictional;
indeed, the WIPO panelist's decision is not even entitled to deference
on the merits. A brief review of the scheme established by ICANN
in adopting the UDRP and by Congress in enacting the ACPA
informs our resolution of this issue.
A domain name is "any alphanumeric designation which is regis-
tered with or assigned by any domain name registrar, domain name
registry, or other domain name registration authority as part of an
electronic address on the Internet." 15 U.S.C. § 1127. To obtain a
domain name, a would-be registrant simply makes application to a
registrar (there are currently over 160), submits a fee, and agrees to
the terms of the domain name registration agreement. Domain names
are assigned on a first-come, first-served basis.
8
The agreement that accompanies the registration of a domain name
specifies terms and conditions of the registration and the policies gov-
erning the registrant's continued control over the domain name,
including conditions for suspension or transfer of the domain name.
It also provides a contractually mandated process, the UDRP, for
resolution of disputes that might arise between domain name regis-
trants and trademark owners. The UDRP is intended to provide a
quick process for resolving domain name disputes by submitting them
to authorized panels or panel members operating under rules of proce-
dure established by ICANN and under "any rules and principles of
law that [the panel] deems applicable." ICANN, Rules for Uniform
Domain Name Dispute Resolution Policy, ¶ 15(a), at http://
www.icann.org/dndr/udrp/uniform-rules.htm (Oct. 24, 1999).
Because the administrative process prescribed by the UDRP is "ad-
judication lite" as a result of its streamlined nature and its loose rules
regarding applicable law, the UDRP itself contemplates judicial inter-
vention, which can occur before, during, or after the UDRP's dispute-
resolution process is invoked. See ICANN, UDRP ¶ 3(b), at http://
www.icann.org/dndr/udrp/policy.htm (Oct. 24, 1999) (stating that the
registrar will cancel or transfer the domain name upon the registrar's
"receipt of an order from a court or arbitral tribunal, in each case of
competent jurisdiction, requiring such action"); id. at ¶ 4(k) ("The
mandatory administrative proceeding requirements set forth in Para-
graph 4 shall not prevent either you or the complainant from submit-
ting the dispute to a court of competent jurisdiction for independent
resolution before such mandatory administrative proceeding is com-
menced or after such proceeding is concluded"); id. (providing that
the registrar will stay implementation of the administrative panel's
decision if the registrant commences "a lawsuit against the complain-
ant in a jurisdiction to which the complainant has submitted" under
the applicable UDRP rule of procedure). As ICANN recognized in
designing the UDRP, allowing recourse to full-blown adjudication
under a particular nation's law is necessary to prevent abuse of the
UDRP process. See id. at ¶ 1 (defining "reverse domain name hijack-
ing" as use of the UDRP "in bad faith to attempt to deprive a regis-
tered domain-name holder of a domain name"). Thus, when a person
obtains a domain name, the person agrees, in the registration contract
with the registrar, to follow the UDRP as established by ICANN.
9
In 1999, Congress amended the Trademark Act of 1946 (the Lan-
ham Act) with the Anticybersquatting Consumer Protection Act
(ACPA), Pub. L. No. 106-113, § 3001 et seq., 113 Stat. 1501A-545
(codified in scattered sections of 15 U.S.C.), principally for the pur-
pose of protecting trademark owners against cyberpiracy:
The purpose of the bill is to protect consumers and Ameri-
can businesses, to promote the growth of online commerce,
and to provide clarity in the law for trademark owners by
prohibiting the bad-faith and abusive registration of distinc-
tive marks as Internet domain names with the intent to profit
from the goodwill associated with such marks - a practice
commonly referred to as "cybersquatting."
S. Rep. No. 106-140, at 4 (1999). Although the ACPA was enacted
primarily to redress cyberpiracy or "cybersquatting," it also provides
limited liability for trademark infringement by registrars who partici-
pate in the administration of the registration, transfer, and cancellation
of domain names pursuant to a "reasonable policy" that is consistent
with the purposes of the trademark laws. See 15 U.S.C.
§ 1114(2)(D)(i)-(iii). And to balance the rights given to trademark
owners against cybersquatters, the ACPA also provides some protec-
tion to domain name registrants against "overreaching trademark
owners." S. Rep. No. 106-140, at 11; see also 15 U.S.C.
§ 1114(2)(D)(iv)-(v). Thus, § 1114(2)(D)(v) authorizes a domain
name registrant to sue trademark owners for "reverse domain name
hijacking."1 Under that reverse domain name hijacking provision, a
domain name registrant who is aggrieved by an overreaching trade-
mark owner may commence an action to declare that the domain
name registration or use by the registrant is not unlawful under the
Lanham Act. This section provides that the court may "grant injunc-
____________________________________________________________
1 If a domain-name registrant cybersquats in violation of the ACPA, he
"hijacks" the domain name from a trademark owner who ordinarily
would be expected to have the right to use the domain name involving
his trademark. But when a trademark owner overreaches in exercising
rights under the ACPA, he "reverse hijacks" the domain name from the
domain-name registrant. Thus, § 1114(2)(D)(v), enacted to protect
domain-name registrants against overreaching trademark owners, may be
referred to as the "reverse domain name hijacking" provision.
10
tive relief to the domain name registrant, including the reactivation of
the domain name or transfer of the domain name to the domain name
registrant." 15 U.S.C. § 1114(2)(D)(v).
In sum, domain names are issued pursuant to contractual arrange-
ments under which the registrant agrees to a dispute resolution pro-
cess, the UDRP, which is designed to resolve a large number of
disputes involving domain names, but this process is not intended to
interfere with or modify any "independent resolution" by a court of
competent jurisdiction. Moreover, the UDRP makes no effort at uni-
fying the law of trademarks among the nations served by the Internet.
Rather, it forms part of a contractual policy developed by ICANN for
use by registrars in administering the issuance and transfer of domain
names. Indeed, it explicitly anticipates that judicial proceedings will
continue under various nations' laws applicable to the parties.
The ACPA recognizes the UDRP only insofar as it constitutes a
part of a policy followed by registrars in administering domain
names, and the UDRP is relevant to actions brought under the ACPA
in two contexts. First, the ACPA limits the liability of a registrar in
respect to registering, transferring, disabling, or cancelling a domain
name if it is done in the "implementation of a reasonable policy"
(including the UDRP) that prohibits registration of a domain name
"identical to, confusingly similar to, or dilutive of another's mark." 15
U.S.C. § 1114(2)(D)(ii)(II) (emphasis added). Second, the ACPA
authorizes a suit by a domain name registrant whose domain name
has been suspended, disabled or transferred under that reasonable
policy (including the UDRP) to seek a declaration that the registrant's
registration and use of the domain name involves no violation of the
Lanham Act as well as an injunction returning the domain name.
Thus, while a decision by an ICANN-recognized panel might be a
condition of, indeed the reason for, bringing an action under 15
U.S.C. § 1114(2)(D)(v), its recognition vel non is not jurisdictional.
Jurisdiction to hear trademark matters is conferred on federal courts
by 28 U.S.C. §§ 1331 and 1338, and a claim brought under the
ACPA, which amended the Lanham Act, is a trademark matter over
which federal courts have subject matter jurisdiction.
Moreover, any decision made by a panel under the UDRP is no
more than an agreed-upon administration that is not given any defer-
11
ence under the ACPA. To the contrary, because a UDRP decision is
susceptible of being grounded on principles foreign or hostile to
American law, the ACPA authorizes reversing a panel decision if
such a result is called for by application of the Lanham Act.
In sum, we conclude that we have jurisdiction over this dispute
brought under the ACPA and the Lanham Act. Moreover, we give the
decision of the WIPO panelist no deference in deciding this action
under § 1114(2)(D)(v). See Dluhos v. Strasberg, 321 F.3d 365, 373-
74 (3d Cir. 2003) (holding that 15 U.S.C. § 1114(2)(D)(v) requires
the federal court to approach the issues raised in an action brought
under that provision de novo rather than to apply the deferential
review appropriate to actions governed by the Federal Arbitration
Act); Sallen v. Corinthians Licenciamentos LTDA, 273 F.3d 14, 28
(1st Cir. 2001) (explaining that "a federal court's interpretation of the
ACPA supplants a WIPO panel's interpretation of the UDRP"). Thus,
for our purposes, the WIPO panelist's decision is relevant only to
serve as the reason for Bcom, Inc.'s bringing an action under
§ 1114(2)(D)(v) to reverse the WIPO panelist's decision.
III
Now we turn to the principal issue raised in this appeal. Bcom, Inc.
contends that in deciding its claim under § 1114(2)(D)(v), the district
court erred in applying the law of Spain rather than the law of the
United States. Because the ACPA explicitly requires application of
the Lanham Act, not foreign law, we agree.
Section 1114(2)(D)(v), the reverse domain name hijacking provi-
sion, states:
A domain name registrant whose domain name has been
suspended, disabled, or transferred under a policy described
under clause (ii)(II) may, upon notice to the mark owner,
file a civil action to establish that the registration or use of
the domain name by such registrant is not unlawful under
this chapter. The court may grant injunctive relief to the
domain name registrant, including the reactivation of the
domain name or transfer of the domain name to the domain
name registrant.
12
15 U.S.C. § 1114(2)(D)(v). Thus, to establish a right to relief against
an "overreaching trademark owner" under this reverse hijacking pro-
vision, a plaintiff must establish (1) that it is a domain name regis-
trant; (2) that its domain name was suspended, disabled, or transferred
under a policy implemented by a registrar as described in 15 U.S.C.
§ 1114(2)(D)(ii)(II); (3) that the owner of the mark that prompted the
domain name to be suspended, disabled, or transferred has notice of
the action by service or otherwise; and (4) that the plaintiff's registra-
tion or use of the domain name is not unlawful under the Lanham Act,
as amended.
The parties do not dispute that the first two elements are satisfied.
Bcom, Inc. is a domain name registrant, and its domain name was
suspended, disabled, or transferred under Network Solutions' policy,
i.e., the UDRP incorporated into the domain name registration agree-
ment for <barcelona.com>. Although the domain name had not actu-
ally been transferred from Bcom, Inc. as of the time that Bcom, Inc.
commenced this action, the WIPO panelist had already ordered the
transfer, and as a result of this order the transfer was certain to occur
absent the filing of this action to stop it. By filing this suit, Bcom, Inc.
obtained an automatic stay of the transfer order by virtue of paragraph
4(k) of the UDRP, which provides that the registrar will stay imple-
mentation of the administrative panel's decision if the registrant com-
mences "a lawsuit against the complainant in a jurisdiction to which
the complainant has submitted" under the applicable UDRP rule of
procedure. See ICANN, UDRP ¶ 4(k). Moreover, this suit for declara-
tory judgment and injunctive relief under § 1114(2)(D)(v) appears to
be precisely the mechanism designed by Congress to empower a party
whose domain name is subject to a transfer order like the one in the
present case to prevent the order from being implemented. See Sallen,
273 F.3d at 25 n.11 ("We think that § 1114(2)(D)(ii)(II), the statutory
provision referenced in § 1114(2)(D)(v), covers situations where a
transfer by [the registrar] is inevitable unless a court action is filed").
There also can be no dispute that Bcom, Inc. provided notice of this
§ 1114(2)(D)(v) action to the City Council.
It is the last element that raises the principal issue on appeal. Bcom,
Inc. argues that the district court erred in deciding whether Bcom, Inc.
13
satisfied this element by applying Spanish law and then by concluding
that Bcom, Inc.'s use of the domain name violated Spanish law.
It appears from the district court's memorandum opinion that it
indeed did resolve the last element by applying Spanish law.
Although the district court recognized that the City Council did not
have a registered trademark in the name "Barcelona" alone, either in
Spain or in the United States, it observed that"[u]nder Spanish law,
when trademarks consisting of two or more words contain one word
that stands out in a predominant manner, that dominant word must be
given decisive relevance." Barcelona.com, Inc., 189 F. Supp. 2d at
371-72. The court noted that "the term `Barcelona' has been included
in many trademarks consisting of two or more words owned by the
City Council of Barcelona. In most of these marks, the word `Barce-
lona' is clearly the dominant word which characterizes the mark." Id.
at 372. These observations regarding the substance and effect of
Spanish law led the court to conclude that the City Council of Barce-
lona "owns a legally valid Spanish trademark for the dominant word
`Barcelona.'" Id. The district court then proceeded to determine
whether Bcom's "use of the Barcelona trademark is`not unlawful.'"
Id. In this portion of its analysis, the district court determined that
there was a "confusing similarity between the barcelona.com domain
name and the marks held by the Council," id., and that "the circum-
stances surrounding the incorporation of [Bcom, Inc.] and the actions
taken by Nogueras in attempting to sell the domain name evidence[d]
a bad faith intent to profit from the registration of a domain name
containing the Council's mark," id. Applying Spanish trademark law
in this manner, the court resolved that Bcom, Inc.'s registration and
use of <barcelona.com> were unlawful.
It requires little discussion to demonstrate that this use of Spanish
law by the district court was erroneous under the plain terms of the
statute. The text of the ACPA explicitly requires application of the
Lanham Act, not foreign law, to resolve an action brought under 15
U.S.C. § 1114(2)(D)(v). Specifically, it authorizes an aggrieved
domain name registrant to "file a civil action to establish that the reg-
istration or use of the domain name by such registrant is not unlawful
under this chapter." 15 U.S.C. § 1114(2)(D)(v) (emphasis added).2 It
____________________________________________________________
2 The ACPA actually provides that the registrant may sue to declare
that the domain name's use by such registrant is "not unlawful under this
14
is thus readily apparent that the cause of action created by Congress
in this portion of the ACPA requires the court adjudicating such an
action to determine whether the registration or use of the domain
name violates the Lanham Act. Because the statutory language has a
plain and unambiguous meaning that is consistent with the statutory
context and application of this language in accordance with its plain
meaning provides a component of a coherent statutory scheme, our
statutory analysis need proceed no further. See Robinson v. Shell Oil
Co., 519 U.S. 337, 340 (1997) ("Our first step in interpreting a statute
is to determine whether the language at issue has a plain and unam-
biguous meaning with regard to the particular dispute in the case. Our
inquiry must cease if the statutory language is unambiguous and the
statutory scheme is coherent and consistent" (quotation marks omit-
ted)).
By requiring application of United States trademark law to this
action brought in a United States court by a United States corporation
involving a domain name administered by a United States registrar,
15 U.S.C. § 1114(2)(D)(v) is consistent with the fundamental doctrine
of territoriality upon which our trademark law is presently based.
Both the United States and Spain have long adhered to the Paris Con-
vention for the Protection of Industrial Property. See Convention for
the Protection of Industrial Property of 1883 (the "Paris Convention"),
opened for signature Mar. 20, 1883, 25 Stat. 1372, as amended at
Stockholm, opened for signature July 14, 1967, 21 U.S.T. 1583. Sec-
tion 44 of the Lanham Act, 15 U.S.C. § 1126, incorporates the Paris
Convention into United States law, but only "to provide foreign
nationals with rights under United States law which are coextensive
with the substantive provisions of the treaty involved." Scotch Whisky
Ass'n v. Majestic Distilling Co., 958 F.2d 594, 597 (4th Cir. 1992);
see also Int'l Cafe, S.A.L. v. Hard Rock Cafe Int'l (U.S.A.), Inc., 252
F.3d 1274, 1278 (11th Cir. 2001) ("[T]he rights articulated in the
Paris Convention do not exceed the rights conferred by the Lanham
Act"). The relevant substantive provision in this case is Article 6(3)
____________________________________________________________
Act." 113 Stat. 1501A-550, § 3004. "Act" is defined to refer to the
Trademark Act of 1946 (the Lanham Act). Id. Upon codification, the
term "this Act" became "this chapter," Chapter 22 of Title 15, which con-
tains the Lanham Act.
15
of the Paris Convention, which implements the doctrine of territorial-
ity by providing that "[a] mark duly registered in a country of the
[Paris] Union shall be regarded as independent of marks registered in
the other countries of the Union, including the country of origin."
Paris Convention, supra, art. 6(3). As one distinguished commentary
explains, "the Paris Convention creates nothing that even remotely
resembles a `world mark' or an `international registration.' Rather, it
recognizes the principle of the territoriality of trademarks [in the
sense that] a mark exists only under the laws of each sovereign
nation." 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition § 29:25 (4th ed. 2002).
It follows from incorporation of the doctrine of territoriality into
United States law through Section 44 of the Lanham Act that United
States courts do not entertain actions seeking to enforce trademark
rights that exist only under foreign law. See Person's Co., Ltd. v.
Christman, 900 F.2d 1565, 1568-69 (Fed. Cir. 1990) ("The concept
of territoriality is basic to trademark law; trademark rights exist in
each country solely according to that country's statutory scheme").
Yet the district court's application of foreign law in this declaratory
judgment action did precisely this and thereby neglected to apply
United States law as required by the statute.
When we apply the Lanham Act, not Spanish law, in determining
whether Bcom, Inc.'s registration and use of <barcelona.com> is
unlawful, the ineluctable conclusion follows that Bcom, Inc.'s regis-
tration and use of the name "Barcelona" is not unlawful. Under the
Lanham Act, and apparently even under Spanish law, the City Coun-
cil could not obtain a trademark interest in a purely descriptive geo-
graphical designation that refers only to the City of Barcelona. See 15
U.S.C. § 1052(e)(2); see also Spanish Trademark Law of 1988, Art.
11(1)(c) (forbidding registration of marks consisting exclusively of
"geographical origin"). Under United States trademark law, a geo-
graphic designation can obtain trademark protection if that designa-
tion acquires secondary meaning. See, e.g., Resorts of Pinehurst, Inc.
v. Pinehurst Nat'l Corp., 148 F.3d 417, 421 (4th Cir. 1998). On the
record in this case, however, there was no evidence that the public -
in the United States or elsewhere - associates "Barcelona" with any-
thing other than the City itself. Indeed, the Chief Director of the City
Council submitted an affidavit stating that "[t]he City does not own
16
and is not using any trademarks in the United States, to identify any
goods or services." Therefore, under United States trademark law,
"Barcelona" should have been treated as a purely descriptive geo-
graphical term entitled to no trademark protection. See 15 U.S.C.
§ 1052(e)(2). It follows then that there was nothing unlawful about
Nogueras' registration of <barcelona.com>, nor is there anything
unlawful under United States trademark law about Bcom, Inc.'s con-
tinued use of that domain name.3
For these reasons, we conclude that Bcom, Inc. established entitle-
ment to relief under 15 U.S.C. § 1114(2)(D)(v) with respect to the
domain name <barcelona.com>, and accordingly we reverse the dis-
trict court's ruling in this regard.
IV
After applying Spanish trademark law to deny Bcom, Inc. relief
under 15 U.S.C. § 1114(2)(D)(v), the district court also proceeded to
adjudicate what it described as the City Council's "counterclaim for
relief under the [ACPA]." Barcelona.com, Inc., 189 F. Supp. 2d at
373 (referring to 15 U.S.C. § 1125(d)(1)(A)). The court devoted
approximately half of its opinion to issues arising out of this alleged
counterclaim and, in this section of its opinion, issued rulings (1) that
claims may be brought under 15 U.S.C. § 1125(d) premised on the
violation of foreign marks because the statute's coverage is not lim-
ited to violations of United States trademarks, id. at 373-74, (2) that
Bcom acted with a bad faith intent to profit under the nine nonexclu-
sive factors set forth in 15 U.S.C. § 1125(d)(1)(B), id. at 374-76, and
(3) that <barcelona.com> was "confusingly similar" to the City Coun-
cil's Spanish trademarks which "contain the term`Barcelona' as the
dominant element," id. at 376.
We do not reach the merits of Bcom Inc.'s appeal of the district
court's rulings on these issues insofar as they relate to the "counter-
claim" under § 1125 because the City Council never filed a counter-
claim. The issues presented by the district court's rulings on this
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3 Bcom, Inc. asserts that of the 100 most populous cities in the world,
it could discover only one - Sydney, Australia - whose name, syd-
ney.com, was registered to the city.
17
"counterclaim" are not before us on appeal because they were not
properly before the district court ab initio.4 Accordingly, we vacate
the district court's rulings on all issues arising out of this phantom
counterclaim.
V
For the foregoing reasons, we reverse the district court's ruling that
denied Bcom, Inc. relief under 15 U.S.C. § 1114(2)(D)(v); we vacate
its Memorandum Opinion and Order of February 22, 2002; and we
remand for further proceedings to determine and grant the appropriate
relief under § 1114(2)(D)(v).
REVERSED, VACATED, AND REMANDED
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4 Counsel for the parties agreed at oral argument that no counterclaim
had been filed. We can only speculate that the district court's mistaken
attribution of a counterclaim to the City Council may perhaps have rested
on statements relating to the § 1125 "bad faith" factors in the City Coun-
cil's Proposed Findings of Fact and Conclusions of Law.
18