IP Law Daily Registrant of ‘Lotto’ domain names could sue owner of ‘Lotto’ trademarks for reverse domain-name hijacking
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Thursday, February 15, 2018

Registrant of ‘Lotto’ domain names could sue owner of ‘Lotto’ trademarks for reverse domain-name hijacking

By Mark Engstrom, J.D.

The registrant of the domain names lottoworks.com and lottostore.com could pursue a claim for reverse domain-name hijacking, but not for fraud or tortious interference, against an Italian clothier that owned multiple "Lotto" trademarks, the federal district court in Phoenix has ruled. The registrant sufficiently alleged that his registration or use of the "Lotto" domain names was not unlawful, the court explained, and the remaining elements of the claim for reverse domain-name hijacking were conceded by both parties. The claim for reverse domain-name hijacking could thus proceed under 15 U.S.C. §1114(2)(D)(v). However, the registrant failed to allege any facts to show that the defendant had knowingly and materially misrepresented that the domain names were identical to, confusingly similar to, or dilutive of the defendant’s marks, and thus failed to sufficiently plead a required element of his fraud claim under 15 U.S.C. §1114(2)(D)(iv). Allegations of tortious interference were deficient, as well, according to the court (Dent v. Lotto Sport Italia S.p.A., February 12, 2018, Silver, R.).

Plaintiff David Dent develops and licenses software for lottery, bingo, and casino games. When Dent decided to expand his operations into direct online gambling, he purchased two domain names: lottoworks.com for his company operations and lottostore.com for his online storefront.

Defendant Lotto Sport Italia is an Italian clothing company that owns multiple trademarks that contain the word "Lotto." Shortly after the plaintiff purchased his Lotto domain names, the defendant filed a complaint with the World Intellectual Property Organization (WPO) under its Uniform Domain Name Dispute Resolution Policy (UDRP). Thereafter, the UDRP complaint was sent to the plaintiff’s domain-name registrar, GoDaddy LLC, which prevented the plaintiff from accessing or exercising control over the Lotto domain names.

The plaintiff alleged that the defendant’s UDRP complaint had misrepresented his intent in registering the Lotto domains. In particular, the plaintiff alleged that the complaint had accused the plaintiff of registering and using the domain names in "bad faith," in part because the plaintiff did not begin to use them immediately for his gambling business.

According to the court, the plaintiff alleged two different violations: one for fraud—under 15 U.S.C. §1114(2)(D)(iv)—in the domain dispute proceeding, and one for reverse domain-name hijacking under 15 U.S.C. § 1114(2)(D)(v).

To sufficiently plead the fraud claim, the plaintiff had to allege that: (1) the defendant knowingly and materially misrepresented that the Lotto domain names were identical to, confusingly similar to, or dilutive of the defendant’s Lotto trademarks and (2) the defendant’s misrepresentation caused a registration authority to transfer, disable, or cancel the plaintiff’s domain names. In the court’s view, however, the plaintiff did not allege any fact that suggested that the defendant had knowingly and materially misrepresented that the plaintiff’s domain names were identical to, confusingly similar to, or dilutive of the defendant’s Lotto marks. For that reason, the pleadings were insufficient to state a claim for fraud in the domain dispute proceeding.

With respect to the plaintiff’s claim for reverse domain-name hijacking, the only disputed issue was whether the plaintiff had alleged that his registration or use of the Lotto domain names was "not unlawful."

The defendant argued that the WIPO had already ruled in the defendant’s favor; therefore, the plaintiff’s use of the domain names was unlawful. The court disagreed. Even if judicial notice of the WIPO’s decision was proper, as the defendant had argued, the organization’s conclusions were not afforded any deference, so its decision could not establish that the plaintiff’s use was unlawful.

Moreover, the plaintiff had adequately alleged that his use or registration of Lotto domain names was not unlawful. To do that, the plaintiff had to allege that: (1) he did not register, traffic, or use a domain name that was identical or confusingly similar to a distinctive mark or (2) he did not have a bad faith intent to profit from that mark.

According to the court, the plaintiff alleged that: (1) he had been involved in the gaming industry for ten years, and during that time he developed and licensed software for lottery, bingo, and casino games; (2) he purchased the domain names lottoworks.com and lottostore.com for the purpose of expanding his operations into direct online gambling; (3) he expected to launch lottoworks.com as a website for his operations and lottostore.com as a direct lotto-game storefront; (4) he did not use the domain names in a way that would infringe the defendant’s rights; (5) he was unaware of the defendant’s brand when he purchased and accessed the Lotto domain names; (6) he did not manufacture, produce, or sell clothing of any kind; and (5) the term "lotto" was a generic word that described gambling services.

In the court’s view, those allegations were sufficient to allege that the plaintiff’s use of the domain names was not unlawful. Moreover, because the parties had agreed that the plaintiff had satisfied every other element of the claim for reverse domain-name hijacking, the plaintiff could proceed with that claim.

The case is No. CV-17-00651-PHX-ROS.

Attorneys: Jeffrey William Johnson (Schmeiser, Olsen & Watts, LLP) for David Dent. Marc John Randazza (Randazza Legal Group) for Lotto Sport Italia S.p.A.

Companies: Lotto Sport Italia S.p.A.

MainStory: TopStory TechnologyInternet Trademark ArizonaNews

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