Mason Decl., Ex. M). The "logicaldomain.com" site was open to
everyone in the world and was viewable by New York residents.
(Storey Tr. at 144-45).
B. Prior Proceedings
Cello commenced this action on October 16, 1997, asserting
claims under the Federal Trademark Dilution Act (the "FTDA"),
15 U.S.C. § 1125(c), and § 360-1 of the New York General Business
Law. N.Y. Gen. Bus. L. § 360-1 (McKinney Supp. 1999). After
discovery, these motions followed.
In November 1999, while the cross-motions for summary judgment
were pending, the Anticybersquatting Consumer Protection Act (the
"ACPA") was signed into law. Pub.L. No. 106-113, 113 Stat. 1501
(1999) (to be codified at 15 U.S.C. § 1125(d)). On February 2,
2000, the Second Circuit issued a decision interpreting the ACPA
— the first interpretation of the ACPA at the appellate level —
in Sporty's Farm L.L.C. v. Sportsman's Market, Inc.,
202 F.3d 489 (2d Cir. 2000).
In light of these developments, Cello requested leave of the
Court to amend the complaint to add a claim under the ACPA.
Defendants opposed the request, arguing that the ACPA was
inapplicable. The Court then asked for, and received,
supplemental briefing from the parties on the applicability of
the ACPA and Sporty's to this case.
A. Local Civil Rule 56.1
A threshold issue is presented by defendants' failure to
submit, on a timely basis, a "separate, short and concise
statement of the material facts" as required by Local Civil Rule
56.1, either in support of their motion or in opposition to
Cello's motion. Defendants did not submit a Rule 56.1 statement
until two months after they had cross-moved for summary judgment
and a month and a half after Cello had filed reply papers.*fn1
Cello objects to defendants' late-filed 56.1 statement and argues
that it should be rejected and the facts contained in Cello's
56.1 statement deemed admitted.
Cello's objection to defendants' late Rule 56.1 statement is
overruled. Defendants did submit, on a timely basis, declarations
and other evidentiary materials that challenged Cello's factual
assertions, and they also submitted a timely memorandum of law.
The facts contained in their late Rule 56.1 statement do not
contradict the facts asserted in their earlier filed declarations
and other materials. Hence, there is no prejudice to Cello if
defendants' Rule 56.1 statement is accepted. On the other hand,
defendants will be seriously prejudiced if the facts asserted in
Cello's Rule 56.1 statement are deemed admitted merely because
their attorneys inadvertently neglected to file a Rule 56.1
statement when they filed their initial papers. See Citibank
N.A. v. Outdoor Resorts of Am., Inc., No. 91 Civ. 1407, 1992 WL
162926 (S.D.N.Y. June 29, 1992) (holding that granting summary
judgment in favor of plaintiff on basis of defendants' failure to
submit a Rule 56.1 statement was unwarranted where defendants
submitted papers that made defendants' basis for opposing summary
judgment sufficiently clear); see also Abu-Nassar v. Elders
Futures Inc., No. 88 Civ. 7906, 1994 WL 445638 (S.D.N.Y. Aug.17,
1994) (holding that the court's "striking" of an untimely [56.1]
statement is discretionary).
Accordingly, I accept Storey's belatedly filed Rule 56.1
statement and I have considered it in deciding these motions.
B. Personal Jurisdiction
Defendants' motion for summary judgment is denied to the extent
they seek to
dismiss the complaint for lack of personal jurisdiction, for I
conclude that this Court has personal jurisdiction over Storey
pursuant to the New York long-arm statute.
In considering the issue of personal jurisdiction over a
non-domiciliary, a court must first apply the forum state's
long-arm statute and then determine, if the requirements of the
long-arm statute are met, whether the exercise of jurisdiction
over the defendant would comport with the requirements of due
process. See PDK Labs, Inc. v. Friedlander, 103 F.3d 1105,
1108-10 (2d Cir. 1997); see also Panavision Int'l, L.P. v.
Toeppen, 141 F.3d 1316, 1319 (9th Cir. 1998).
Here, the relevant long-arm statute is section 302(a)(3)(ii) of
the C.P.L.R., which provides that:
a court may exercise personal jurisdiction over any
non-domiciliary . . . who . . . commits a tortious
act without the state causing injury to a person or
property within the state . . . if he . . . expects
or reasonably should expect the act to have
consequences in the state and derives substantial
revenue from interstate or international commerce.
N YC.P.L.R. § 302(a)(3)(ii) (McKinney 1997).
Cello has alleged that Storey committed a tortious act outside
the state ("cybersquatting" on "cello.com") that caused injury to
Cello within the state (diluting Cello's registered trademark
"Cello"). See Panavision, 141 F.3d at 1321 (trademark dilution
case is "akin to a tort case"). In addition, Storey certainly
expected, or reasonably should have expected, his actions to have
consequence in New York. He was aware, before he registered
"cello.com," of the existence of Cello and he was aware that
Cello was in the audio business. Indeed, it is apparent that he
was planning on trying to market the name when he registered it,
and he surely knew, or should have known, that any such efforts
would have an impact in New York. Within days after registering
the name, he telephoned Cello in New York and sent an e-mail to
Cornell in New York in an effort to sell the domain name.*fn2
Finally, although the record is less clear in this respect, I
also conclude that Storey "derives substantial revenue from
interstate or international commerce." He had a website offering
domain names for sale and he in fact sold two domain names. He
has also sold equipment to customers in New York (albeit after
the filing of this lawsuit). Although he was somewhat evasive at
his deposition, the only source of income that he identified was
his "current business." (Storey Tr. at 20-24). He described his
current business, Audio Online, as a company that "seeks to
promote sales internationally through the internet." (Storey
Decl. ¶ 3) (emphasis added). Cf. Bensusan Restaurant Corp. v.
King, 126 F.3d 25, 29 (2d Cir. 1997) (holding that owner of a
Missouri nightclub that operated a website was not subject to
long-arm jurisdiction in New York under N.Y.C.P.L.R. §
302(a)(3)(ii) because the nightclub was "unquestionably a local
operation" that did not derive substantial revenues from
I also conclude that the exercise of personal jurisdiction over
Storey would not violate the Due Process Clause of the
Constitution. See Metropolitan Life Ins. Co.
v. Robertson-Ceco, 84 F.3d 560, 567 (2d Cir. 1996); American
Network, Inc. v. Access Am./Connect Atlanta, Inc., 975 F. Supp. 494,
498-500 (S.D.N.Y. 1997).
Storey purposefully availed himself of the benefits of doing
business in New York. He telephoned Cello twice and sent an
e-mail to Cornell, and thus he "reached out" and "originated"
contacts with New York. CompuServe, 89 F.3d at 1266 (holding
that a Texas internet user was subject to personal jurisdiction
in Ohio because he had "reached out" and "originated and
maintained" contact in Ohio by advertising and sending his
software through the service in Ohio). He offered numerous domain
names, including "cello.com," on a website that was open to
everyone, including citizens of New York. This suit arises out of
or is related to these contacts. He sold audio equipment online
in what he describes himself as an effort "to promote sales
internationally through the internet." Under all these
circumstances, he certainly should have anticipated being haled
into court here in New York.
In Panavision, a case involving similar facts, the Ninth
Circuit found that the district court properly exercised personal
jurisdiction over a non-domiciliary accused of registering the
trademark of another as a domain name. The court acknowledged
that "simply registering someone else's trademark as a domain
name and posting a web site on the Internet is not sufficient to
subject a party domiciled in one state to a jurisdiction in
another." See Panavision, 141 F.3d at 1322. The court went on
to hold, however, that a defendant who "engaged in a scheme to
register [plaintiff's] trademarks as his domain names for the
purpose of extorting money from [plaintiff]" was subject to
personal jurisdiction in the plaintiff's state. Id. If Cello's
allegations are true, this is precisely the situation before the
Court in this case. See also Quokka Sports, Inc. v. Cup Int'l
Ltd., No. C-99-5076, 1999 U.S. LEXIS 21000, at *10-23 (N.D.Cal.
Dec. 13, 1999) (exercising personal jurisdiction over New Zealand
defendants who operated a website under domain name
"americascup.com," where defendants "purposely availed"
themselves of benefits of conducting activities in United States
and targeted U.S. market by "purposefully interject[ing] their
website into the California and United States markets"); Hasbro,
Inc. v. Clue Computing, Inc., 994 F. Supp. 34 (D.Mass. 1997)
(exercising personal jurisdiction over Colorado corporation that
operated a website, "clue.com," that allegedly diluted trademark
of Massachusetts company, where the website was targeted to reach
a national audience, the website was accessible to Massachusetts
residents, the company listed a Massachusetts company as a
client, and the company represented that its employees would
Accordingly, I hold that this Court may exercise personal
jurisdiction over defendants.
C. The Merits
1. The FTDA
The FTDA provides in relevant part:
The owner of a famous mark shall be entitled, subject
to the principles of equity and upon such terms as
the court deems reasonable, to an injunction against
another person's commercial use in commerce of a mark
or trade name, if such use begins after the mark has
become famous and causes dilution of the distinctive
quality of the mark.
15 U.S.C. § 1125(c)(1).
"Dilution" is defined as:
[T]he lessening of the capacity of a famous mark to
identify and distinguish goods or services,
regardless of the presence or absence of — (1)
competition between the owner of the famous mark and
other parties, or (2) likelihood of confusion,
mistake, or deception.
15 U.S.C. § 1127.