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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in..., Inc. v. Verio, Inc.

126 F. Supp. 2d 238 (S.D.N.Y., December 12, 2000) (Jones, J.) aff'd. 356 F.3d 393 (2d Cir. 2004)

Court issues a preliminary injunction enjoining Verio, Inc. from either utilizing a search robot to obtain information from's Whois database, or utilizing information derived from that database for mass unsolicited advertising by telephone, direct mail or electronic mail. Court holds that Verio's actions will likely constitute a breach of plaintiff's Terms of Use, as well as a violation of both the Computer Fraud and Abuse Act and the Lanham Act and a trespass to chattels. In reaching this conclusion, the court holds that's Terms of Use are likely to create a contract between and the users of its Whois database, notwithstanding the fact that these users are not required to click an "I Agree" button indicating their agreement to be so bound. operates a domain name registration service. It also provides a variety of related services, including web site hosting and electronic mail. To be authorized to provide domain name registration services, was required to and did enter into a Registrar Accreditation Agreement with ICANN. Pursuant to this agreement, is required to provide the public with access to a Whois database containing, inter alia, contact information by which one can reach those individuals who utilize's services to register their domain name. This agreement with ICANN sets forth the restrictions can place on the uses made by the public of data they obtain from the Whois database. More particularly, this agreement provides:

Registrar shall not impose terms and conditions on use of the data provided except as permitted by ICCAN-adopted policy. Unless and until ICANN adopts a different policy, Registrar shall permit use of data it provides in response to queries for any lawful purposes except to: (a) allow, enable, or otherwise support the transmission of mass unsolicited, commercial advertising or solicitations via e-mail (spam); or (b) enable high volume, automated, electronic processes that apply to Registrar (or its systems).

In apparent breach of this agreement (see footnote 3 of the court's decision) imposed greater restrictions on the use of data derived from its Whois database then those provided in its agreement with ICANN. prohibited the use of data obtained from the database not only for sending unsolicited electronic mail, as provided for by ICANN, but also for solicitation via regular mail and telephone.'s Terms of Use provide, in pertinent part:

[B]y submitting a Whois query, you agree that you will use this data only for lawful purposes and that, under no circumstances, will you use this data to: (1) allow, enable or otherwise support the transmission of mass unsolicited commercial advertising or solicitations via direct mail, electronic mail, or by telephone; or (2) enable high volume, automated, electronic processes that apply to (or its systems). The compilation, repackaging, dissemination or other use of this data is expressly prohibited without the prior written consent of reserves the right to modify these terms at any time. By submitting this query, you agree to abide by these terms.

Importantly, a user does not see these terms until after he has submitted a Whois query. The user is then shown the results of his query, which results are preceded by the Terms of Use cited above. The user is not asked or required after seeing these Terms to click any button or icon indicating his assent thereto.

Verio, Inc. is a company that provides a variety of internet services, including web site hosting and development. To assist it in developing its business, Verio decided to market its services to individuals who recently registered domain names. Verio obtained information concerning the identity and whereabouts of these individuals, in part, by using a search robot to search's Whois database. Verio then utilized this information to solicit business from these individuals via telemarketing and e-mail. objected to these activities, sent cease and desist letters to defendant with respect thereto, and finally commenced the instant lawsuit. In its suit, charged that these activities violated its Terms of Use, and constituted both a trespass to chattels as well as a violation of the Computer Fraud and Abuse Act and Lanham Act. The Court, finding that plaintiff was likely to succeed on the merits of these claims, issued a preliminary injunction enjoining Verio from continuing these activities.

Verio argued that could not enforce the Terms of Use applicable to its Whois database because such terms violated's Registrar Accreditation Agreement with ICANN. The court held that Verio did not have standing to assert such a claim because the ICANN Registrar Accreditation Agreement specifically disclaimed any intention to vest rights in third party beneficiaries such as Verio.

More importantly, the Court found that's Terms of Use created a binding contract between Verio and The Court reached this conclusion notwithstanding the fact that (i) the user did not see the Terms of Use until after he had performed a search on the Whois database, and (ii) the user was not asked or required, after seeing the terms, to indicate an assent thereto by clicking on an "I agree" icon. Said the Court:

Nor can Verio argue that it has not assented to's terms of use.'s terms of use are clearly posted on its web site. The conclusion of the terms paragraph states "[b]y submitting this query, you agree to abide by these terms." Verio does not argue that it was unaware of these terms, only that it was not asked to click on an icon indicating that it accepted the terms. However, in light of this sentence at the end of's terms of use, there can be no question that by proceeding to submit a Whois query, Verio manifested its assent to be bound by's terms of use, and a contract was formed and subsequently breached.

Accordingly, the Court found that plaintiff was likely to succeed on its breach of contract claim. The court issued injunctive relief because it believed the damage would sustain, which included injury to its reputation and goodwill, would be difficult to measure in damages.

The Court also found that was likely to prevail on its trespass to chattel claim as a result of Verio's use of a search robot to obtain data from's Whois database. As stated by the Court:

One who uses a chattel with the consent of another is subject to liability in trespass for any harm to the chattel which is caused by or occurs in the course of any use exceeding the consent, even though such use is not a conversion.

The Court first held that once objected thereto, for example, by filing this suit, Verio knew that its use of a search robot exceeded the scope authorized by

The more interesting issue was whether there had been sufficient harm to sustain a trespass claim. The Court noted that "evidence of mere possessory interference is sufficient to demonstrate the quantum of harm necessary to establish a claim for trespass to chattels." While Verio's use alone did not significantly impair the operation of the Whois database, the threat that many others would also use search robots to access the Whois database if the Court did not find such use prohibited created a sufficient threat of injury to warrant injunctive relief. In reaching this conclusion, the Court relied heavily on Ebay Inc. v. Bidder's Edge, Inc., 100 F. Supp. 2d 1058 (N.D. Ca. 2000).

The Court also found that Verio's activities would likely violate the Computer Fraud and Abuse Act in that Verio had intentionally accessed plaintiff's computers without authority and thereby both caused damage and obtained information in violation of 18 U.S.C. §1030(a)(2)(c) and (a)(5)(c).

Lastly, the Court found that Verio's marketing activities would likely violate the Lanham Act. Many individuals, shortly after they register a domain name with, received a solicitation which indicated the caller was calling from Verio "regarding a recently registered domain name" or "regarding the registration of your domain name." This second solicitation further asked the registrant to "Please contact me at your earliest convenience ... If I don't hear from you in a couple of days I will call back." The Court was of the opinion that such solicitations, even though they did not use the mark or name, would likely create confusion as to their source. This conclusion was supported by evidence of actual registrant confusion submitted by The Court accordingly held that such conduct was likely to constitute unfair competition and false designation of origin in violation of §43(a) of the Lanham Act, and accordingly enjoined it.

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