Internet Library of Law
and Court Decisions

The Board of Directors of Sapphire Bay Condominiums West v. George R. Simpson, et al.

Gripe Site Operator Enjoined From Using Condominium Trademark In Gripe Site's Domain

In this domain name dispute, the Third Circuit affirms District Court's decision, enjoining defendant from continuing to use plaintiff's mark in the domain name of a gripe site he operated at that domain, and directing defendant to cancel his registration of that domain.  The courts' rulings were premised on their determinations that plaintiff, the Board of Directors of the Sapphire Bay Condominiums West, was likely to prevail on its claims that defendant's conduct infringed and diluted plaintiff's mark in violation of the Lanham Act.  Notably, defendant's gripe site initially proclaimed itself the "Official Web Site of Sapphire Bay Condominiums West."  The Third Circuit noted that its decision was "not precedential."

Condo Owner Launches Gripe Site At Domain Incorporating Name Of Condominium    

Plaintiff is the Board of Directors of the Sapphire Bay Condominiums West, located in the Virgin Islands.  By license, plaintiff is permitted to, and has, used the mark "Sapphire Bay Condominiums West" in connection with its operation of these condominiums, which were built in or about 1969.  Defendant George Simpson is the owner of one of the Sapphire Bay West condominiums.  After a dispute with the Board over certain renovations he wished to perform, Simpson registered the domain sapphirebaycondos.com, at which he launched a web site that described itself as the "official website of the Sapphire Bay Condominiums West."  The site was highly critical of the plaintiff board.  After receipt of a cease and desist letter from plaintiff, Simpson changed the title of the site to "The Owners Official Website for the Elimination of Dishonesty on the Board of Directors of Sapphire Bay Condominiums West, St. Thomas ,VI" and transferred ownership of the domain to an entity known as the North America Alliance for Honest Corporate Management.

Trademark Infringement And Dilution

Plaintiff commenced this lawsuit, charging defendant with trademark infringement and dilution in violation of the Lanham Act.  A separate suit charged Simpson with defamation as a result of statements he had made on the site.  Finding plaintiff likely to prevail on its trademark claims, the District Court enjoined Simpson from further use of the Sapphire Bay Condominium mark in the domain name of his site, and directed him to cancel his registration of the domain.  The Third Circuit affirmed.

The District Court found plaintiff likely to prevail on its trademark infringement claim.  It had valid rights to use the service mark at issue, and defendant has used the mark in a way likely to cause consumer confusion.  In reaching this result, the court relied on:

The similarity of Simpson's domain name with the Board's mark, the strength of the Board's mark as evidenced by its age and worldwide reputation, the confusion of many of the Board's renters who thought that Simpson's Web site was operated by the Board, the near instant confusion among renters beginning very soon after Simpson began operation of the site, and Simpson's intent to use his site to disparage the Board.

The District Court also found plaintiff likely to prevail on its dilution claim, finding the mark at issue was famous given its use for over 30 years, and the worldwide advertising that had been undertaken to promote it, and that defendant had lessened the capacity of the mark to identify and distinguish the Board's services by using it to lure visitors to a site that disparaged the Board.

Finding that "the [District] Court did not abuse its discretion in balancing the factors and issuing the preliminary injunction," the Third Circuit affirmed.