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Barcelona.com Incorporated v. Excelentisimo Ayuntamiento de Barcelona (The City Council of Barcelona, Spain)

Reversing the decision of the court below, the Fourth Circuit holds that plaintiff, owner of the domain name Barcelona.com, established a valid reverse domain name hijacking claim under 15 U.S.C. §1114(2)(D)(v) against the City Council of Barcelona Spain as a result of the Council's successful prosecution of a Uniform Domain Name Dispute Resolution Policy ("UDRP") proceeding against plaintiff.  In that proceeding, the City Council claimed that plaintiff's domain name infringed the Council's Spanish trademarks in a number of multiword marks each of which contained the word "barcelona."  The arbitrator and the District Court agreed, and directed that the domain name be transferred to the Council.  The Fourth Circuit reversed, holding that the District Court improperly applied Spanish law, instead of US law, to this proceeding.  It further held that under US law, a party could not hold a valid trademark in the name of a geographical place. As such, plaintiff's registration of the domain name barcelona.com was lawful and entitled to protection under 15 U.S.C. §1114(2)(D)(v).  In reaching this result, the Court held that the City Council was subject to the jurisdiction of United States' courts by virtue of its commencement of the UDRP proceeding.

In 1996, a Mr. Cobo registered the domain name barcelona.com in the name of his wife.  Shortly thereafter, Cobo placed a web site on this domain which featured a relatively modest amount of information about Barcelona.  The site also offered web site development and domain name registration services for sale.  Sometime prior to 1999, Cobo sent an e-mail to defendant, offering the domain name for sale.  Defendant did not respond.  In or about September 1999, Cobo formed the plaintiff Baracelona.com, Inc., and wrote a business plan to develop barcelona.com into a portal site containing information about Barcelona, Spain.  In May, 2000, defendant sent a cease and desist letter to Cobo, requesting that he transfer the domain name to the City Council.  Cobo declined, and transferred the domain name instead to plaintiff Barcelona.com, Inc.

The City Council thereafter commenced a UDRP proceeding against plaintiff seeking transfer of the domain name.  The WIPO arbitrator ruled that plaintiff's registration and use of the domain name was improper and in bad faith, and directed plaintiff to transfer the domain name to the City Council.

Plaintiff followed by commencing a reverse domain name hijacking action under 15 U.S.C. §1114(2)(D)(v) against the City Council in a United States District Court.  That statute provides:

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.

The District Court rejected plaintiff's claim holding that his use of the barcelona.com domain name was not unlawful, a prerequisite to a successful reverse hijacking claim.  Importantly, the District Court reached this conclusion by applying Spanish trademark law, which, as interpreted by that court, rendered plaintiff's use of the barcelona.com domain name unlawful.  The District Court also awarded the City Council relief on a counterclaim it did not file.

On appeal, the Fourth Circuit reversed and found that plaintiff had in fact established a valid reverse domain name hijacking claim as a result of defendant's commencement of the UDRP proceeding.  To establish a claim under Section 1114(2)(D)(v), a plaintiff must show that it is a registrant of a domain name, that its domain name was suspended, disabled or transferred pursuant to a UDRP proceeding, that notice of the reverse domain name hijacking action was given to the mark holder, and that "the plaintiff's registration or use of the domain name is not unlawful under the Lanham Act."

There was no dispute that plaintiff satisfied the first three elements of this claim.  The case turned on whether plaintiff's use was unlawful.  The Fourth Circuit held that the District Court improperly applied Spanish law in reaching its conclusion that the use was unlawful.  Section 1114(2)(D)(v) instead called for application of US law, and particularly the Lanham Act, to determine if plaintiff's registration and use was lawful.  Said the Court:

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 registration 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)  It 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.

Applying US law, the Fourth Circuit held that plaintiff's acts were not unlawful, because, with exceptions not applicable here, one cannot hold a trademark in the name of a geographical place. 

Under the Lanham Act, and apparently even under Spanish law, the City Council could not obtain a trademark interest in a purely descriptive geographical designation that refers only to the City of Barcelona. ...  Therefore, under United States trademark law, "Barcelona" should have been treated as a purely descriptive geographical 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 baracelona.com, nor is there anything unlawful under United States trademark law about Bcom, Inc.'s continued use of that domain name. 

As a result, the Fourth Circuit held that plaintiff's reverse domain name hijacking claim was valid.

In reaching this result, the Fourth Circuit found that the City Council of Barcelona, Spain was subject to the jurisdiction of the United States courts for the purpose of adjudicating a reverse domain name hijacking claim because of its commencement of the UDRP proceeding.

Lastly, the Fourth Circuit reversed so much of the decision of the District Court which purported to grant the City Council relief on a counterclaim it never filed.