Center for American Dance, Inc. v. DAddario

Background

Center for American Dance, Inc., doing business as Joffrey Ballet School, and Joffrey Ballet Center for American Dance, Inc. alleged that they operated a school providing classical ballet training under the “Joffrey Ballet” name and had common-law trademark rights dating to 1976. The complaint alleged that Christopher D’Addario, a former executive director, had registered and maintained domain names for the school, then transferred various domain names to his personal account after resigning. Great River Properties LLC was also a defendant.

Both defendants defaulted after the Clerk issued certificates of default. The plaintiffs moved for a default judgment under Rule 55(b) of the Federal Rules of Civil Procedure. The defendants did not respond to the court’s order to show cause. The court previously found that the plaintiffs were entitled to a default judgment and referred the case to Magistrate Judge Barbara Moses to recommend the nature of the judgment and the appropriate relief.

Report and Recommendation

Judge Moses recommended entering a default judgment against D’Addario on the plaintiffs’ conversion claim, awarding $1,000 in nominal damages, dismissing the plaintiffs’ claims against Great River, discharging the plaintiffs’ previously posted $5,000 bond, and issuing a permanent injunction. The proposed injunction would prohibit D’Addario and people acting together with him from interfering with, encumbering, or disturbing the plaintiffs’ possession and control of seven Joffrey domain names.

Judge Moses also recommended dismissing the plaintiffs’ claim against D’Addario under the Anti-Cybersquatting Consumer Protection Act, a federal law addressing bad-faith registration of domain names. She concluded that the plaintiffs had not alleged facts showing that the Joffrey Ballet mark had acquired “secondary meaning,” meaning that the public primarily understood the mark as identifying the source of the services rather than the services themselves.

Court’s Review of the Cybersquatting Claim

Because the plaintiffs objected to the recommendation concerning the Anti-Cybersquatting Consumer Protection Act claim, the court reviewed that issue independently and considered the additional affidavit and exhibits the plaintiffs submitted with their objections.

To establish an Anti-Cybersquatting Consumer Protection Act claim, a plaintiff must show that the mark was distinctive when the domain name was registered, that the domain name was identical or confusingly similar to the mark, and that the alleged infringer acted with a bad-faith intent to profit. The court stated that the parties did not dispute the second and third elements. The dispute concerned whether the Joffrey Ballet mark was distinctive.

The court considered evidence relevant to secondary meaning, including projected advertising expenditures exceeding $400,000, advertising and auditions in multiple countries, substantial engagement with the plaintiffs’ social-media content, annual audition participation of more than 10,000 people, more than 100,000 students who had auditioned or trained under the brand, D’Addario’s alleged attempts to sell Joffrey Ballet merchandise through a new domain name, and the school’s use of the mark since its establishment in 1953 and transfer to Center for American Dance in 1976.

The court concluded that the balance of these factors supported a finding of secondary meaning. It therefore held that the plaintiffs had stated a cause of action under the Anti-Cybersquatting Consumer Protection Act against D’Addario and rejected the recommendation to dismiss that claim.

Relief and Further Proceedings

The court explained that statutory damages under the Anti-Cybersquatting Consumer Protection Act may range from $1,000 to $100,000 per domain name, as the court considers just. Because the magistrate judge had not determined the amount of those damages, the court remanded the case to Judge Moses for recommendations concerning the appropriate damages amount, any attorney’s fees, and the form of the judgment.

The court adopted in part and rejected in part the Report and Recommendation. It adopted the unobjected-to recommendations concerning the conversion judgment against D’Addario, nominal damages, dismissal of the claims against Great River, discharge of the bond, and permanent injunctive relief. The opinion does not specify whether the dismissal of Great River was with or without prejudice. The Clerk was directed to close all pending motions.