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BIHARI v. GROSS

September 25, 2000

MARIANNE BIHARI AND BIHARI INTERIORS, INC., PLAINTIFFS,
V.
CRAIG GROSS AND YOLANDA TRUGLIO, DEFENDANTS.



The opinion of the court was delivered by: Scheindlin, District Judge.

  OPINION AND ORDER

Plaintiffs Marianne Bihari and Bihari Interiors, Inc. (collectively "Bihari") move to preliminarily enjoin defendants Craig Gross and Yolanda Truglio (collectively "Gross") from using the names "Bihari" or "Bihari Interiors" in the domain names or metatags of any of their websites ("the Gross websites"), claiming that such use violates the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d)(1), and infringes on Bihari's common-law service mark in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A). Additionally, Bihari moves to enjoin defendants from publishing defamatory statements against Bihari and Bihari Interiors on the Gross websites, contending that the defamatory statements constitute common law libel.*fn1

I have reviewed Bihari's Complaint, Motion for Preliminary Injunction, Amended Complaint, Supplemental Memorandum of Law, and Reply Memorandum of Law, and I have also reviewed defendants' Answer and Opposing Memorandum of Law. A telephone conference with all counsel, addressing the merits of the case, was held on August 28, 2000. Neither party has requested an evidentiary hearing. For the reasons set forth below, Bihari's motion for preliminary injunctive relief is denied.

I. Introduction

Although the Internet has become part of our daily life, its technological aspects largely remain a mystery to all but the most savvy. A brief review of the fundamentals should prove useful. The Internet is an international network of interconnected computers that enables tens of millions of people, if not more, to communicate with one another and to access vast amounts of information from around the world. See Reno v. American Civil Liberties Union, 521 U.S. 844, 850, 117 S.Ct. 2329, 138 L.Ed.2d 874 (1997). Information on the Internet is housed on webpages.

When searching for information on the Internet, an individual user may choose one of two search techniques. The first involves conducting a specific domain name*fn2 search, in which the user types the company name or logo followed by the suffix ".com". A news network such as CNN, for example, has the website "cnn.com". However, companies will often choose as a domain name one that does not precisely reflect their company name. For instance, the domain name for the New York Times is "nytimes.com". If an Internet user were to type the domain name "newyorktimes.com", the user would arrive at a site unaffiliated with the New York Times but devoted to readers' comments about the New York Times.

Because entering the company's name as the domain name often fails to take the user to the desired webpage, many users prefer the second search technique. Here, a websurfer enters a particular company name or search request in a search engine. The search engine then displays a list of websites that match the user's request. The search engine ranks the relevant sites according to the relative frequency with which the word or phrase appears in the metatags*fn3 and in the text of the websites. The websurfer then chooses, based on any number of considerations, which website to visit. Most often, that choice is based on the domain name listed for each search result and a brief description of each webpage provided by the search engine.

II. Background

A. The Failed Contract

Marianne Bihari is an interior designer who has been providing interior design services in New York City, New Jersey, Connecticut, California, Florida and Italy since 1984. See 3/3/00 Affidavit of Marianne Bihari in Support of Plaintiffs' Motion for a Preliminary Injunction ("Bihari Aff.") ¶ 2. Since 1989, she has been continuously doing business as Bihari Interiors or Marianne Bihari d/b/a Bihari Interiors. See id. The Bihari Interiors name is well known, particularly in the New York City high-end residential interior design market. See id. ¶¶ 2, 4. Bihari does not engage in paid advertising to promote her services; rather, she relies on referrals from clients and other design-industry professionals. See id. ¶ 3.

Craig Gross is a former client of Bihari Interiors. See id. ¶ 1. Yolanda Truglio is Gross's girlfriend. See id. T 21. On February 12, 1998, Gross, on behalf of 530 East 76th Street, Inc., retained Bihari Interiors to provide interior and architectural design services for his condominium apartment on East 76th Street ("the Contract"). See Amended Complaint ¶ 13; Defendants' Answer to Plaintiffs' Amended Complaint ("Answer") T 14. For various reasons not relevant to this action, the relationship between Bihari and Gross soured, and the Contract was never completed. See Amended Complaint ¶¶ 17-25.

On June 14, 1999, Gross filed suit against Marianne Bihari and Bihari Interiors in New York State Supreme Court alleging fraud and breach of contract ("the State Suit"). See id. T 26. On August 12, 1999, Gross submitted an amended verified complaint in the State Suit ("the First Amended Complaint"). On April 3, 2000, the state court dismissed two of the fraud claims, but granted Gross a right to replead one of those claims. See Amended Complaint t 94; 8/4/00 Affidavit of Craig Gross in Opposition to Motion for a Preliminary Injunction T 5 ("Gross Aff."). Gross has since filed a second amended complaint which is currently pending in New York State Supreme Court ("the Second Amended Complaint"). See Gross Aff. ¶ 5.

B. The Alleged Harassment

Approximately two months after Gross first filed the complaint in the State Suit, on August 10, 1999, Bihari, Gross and Truglio engaged in settlement negotiations, which were ultimately unsuccessful. See Amended Complaint ¶¶ 27-29. Four days later, Gross registered the domain names "bihari.com" and "bihariinteriors.com". See id. ¶ 31. On August 16, 1999, Bihari received an anonymous facsimile alerting her to the website. See id. ¶ 32. The following day, Bihari accessed the website "www.bihariinteriors.com". See id. ¶ 36. Disturbed by the unauthorized use of her name and her business name in the domain name, as well as the disparaging statements on the website, Bihari contacted her attorney. See Bihari Aff. ¶¶ 26, 27. On August 31, 1999, Bihari's attorney sent a letter to Gross demanding that he terminate the website. See Amended Complaint ¶ 40. Rather than complying with Bihari's demand, Gross delivered to Bihari's residence pens bearing the words "w ww.bihariinteriors.com".*fn4 See id. ¶ 44. In addition, Bihari alleges that subsequent to the delivery of the pens, Bihari received frequent "hang-up telephone calls" which lasted until approximately November 22, 1999. See id. ¶ 45, 48.*fn5 Bihari filed a criminal complaint for aggravated harassment against Gross and Truglio on October 3, 1999, but the District Attorney's office declined to prosecute. See id. ¶¶ 46, 47.

Bihari was the subject of a criminal complaint several months later. Before the contract relationship between Gross and Bihari deteriorated, Bihari Interiors sold Gross three sofas purchased from a vendor. See Amended Complaint ¶ 49. Bihari Interiors made the initial payments for the sofas. See id. By the terms of the Contract, if Bihari Interiors failed to pay in full by a certain date, the vendor would be free to resell the sofas. See id. ¶ 50. After the payment deadline expired, Gross paid the vendor the balance due on the sofas, thereby avoiding payment of Bihari Interiors' commission. See id. ¶ 51; Answer ¶ 51. The sofas, however, were not delivered to Gross, but to Bihari, who took possession of them pending resolution of the State Suit. See Amended Complaint ¶ 52. Bihari alleges that Gross then filed a criminal complaint against her for theft of the sofas. See id. ¶ 53. On December 20, 1999, Bihari was arrested, held for approximately six hours, and "charged with criminal possession of stolen property in the fifth degree, a misdemeanor offense." Id. ¶ 56. On January 24, 2000, Bihari was informed that the District Attorney's office had declined to prosecute her case. See id. ¶ 57.

C. The Websites

On March 7, 2000, Bihari served Gross with the instant Complaint and motion for injunctive relief. See id. ¶ 58. Gross then offered to take down the "bihariinteriors.com" website pending a preliminary injunction hearing. See id. ¶ 59. He has since relinquished the domain names "bihari.com" and "bihariinteriors.com" and is taking all necessary steps to return those domain names to Network Solutions, Inc., the provider of domain name registrations. See 8/29/00 Letter of Defendants' Attorney Anne W. Salisbury to the Court ("8/29/00 Salisbury Letter").

On March 7, 2000, the day that Bihari served Gross with the Complaint, Bihari also learned of another website created by Gross, "designscam.com", by using an Internet search engine and searching for the words "Bihari Interiors". See id. ¶ 60. Bihari discovered that the "designscam.com" website contained the same content as the "bihariinteriors.com" website. See id. ¶¶ 60, 61. Then, on March 11, 2000, Gross registered a fourth website, "manhattaninteriordesign.com", containing the identical material as "designscam.com". See id. ¶ 63.

All of the Gross websites use "Bihari Interiors" as metatags embedded within the websites' HTML code. See id. 66. The description metatags of the Gross websites state "This site deals with the problems experienced when hiring a new [sic] York City (Manhattan) designer. It discusses Marianne Bihari[,] fraud and deceit and interior decorating." See 3/3/2000 Affidavit of John Running, a computer systems administrator and HTML programmer employed by Bihari's attorneys, in Support of Plaintiffs' Motion for a Preliminary Injunction ("Running Aff.") ¶ 13.

D. The Website Content

Each of the Gross websites is critical of Bihari and her interior design services. An Internet user accessing any of the websites first sees a large caption reading "The Real Story Behind Marianne Bihari & Bihari Interiors." See id. ¶ 72. Directly beneath this title are three photographic reproductions of scenic New York. See id. ¶ 73. Beneath the photographs is a counter indicating how many visitors the website has had. As of June 26, 2000, the counter indicated that 9,774 people have visited the website since August 15, 1999. See Print-out of "manhattaninteriordesign.com" Website, Ex. E to Plaintiffs' Amended Notice of Motion. Also appearing on the first page of the websites are various hyperlinks*fn6 including "Tips on Picking a Designer," "New York City Information," "Who's Who in Interior Design," "Kabalarians Philosophy," "A Humorous Look," "Tell A Friend," "Send EMail," "Sign or Read the Guest Book," and "Participate in the Bihari Poll." Id.

A long block of text appears beneath these hyperlinks and it states:

Welcome to the first web site designed to protect people from the alleged ill intentions of Marianne Bihari & Bihari Interiors. Keep in mind that this site reflects only the view points and experiences of one Manhattan couple that allegedly fell prey to Marianne Bihari & Bihari Interiors. There possibly may be others that have experienced similar alleged fraud and deceit from Marianne Bihari & Bihari Interiors. Please feel free to e-mail us if you think you were victimized by Marianne Bihari & Bihari Interiors. Our goal is to protect you from experiencing the overwhelming grief and aggravation in dealing with someone that allegedly only has intentions to defraud. If you think you need advice before entering into a contract with Marianne Bihari & Bihari Interiors — Please Click Here.

See id.; Amended Complaint 1 ¶ 78, 79.

Below this text a viewer finds additional hyperlinks to "The Initial Meeting," "The Contract," "The Scam," and "The Law Suit" [sic]. See Amended Complaint ¶ 80. Viewers who connect with these links do not immediately receive the information, but are told that if they send an e-mail, they will receive a copy of the requested information. See id. ¶ 81.

In addition to these comments, the Gross websites contain a "guestbook" where visitors leave messages for other visitors to the websites. See id. ¶ 83. Some of the guestbook entries indicate that potential clients declined to retain Bihari's services because of the Gross websites. See id. ¶ 86. Other messages simply comment or inquire about the Gross websites' design. See Guestbook Entries for "www.bihariinteriors.com" from 3/1/2000 ("Guestbook Entries"), Ex. B. to Bihari Aff. Many other entries disparage Bihari and Bihari Interiors.*fn7 See Amended Complaint ¶ 87. Bihari alleges that many of the guestbook entries were written by Gross and Truglio, and do not reflect true dissatisfaction with Bihari or Bihari Interiors. See id. ¶ 85.*fn8

The "designscam.com" and "manhattaninteriordesign.com" websites also contain a box which presents in blinking green letters the following incomplete statement quoted from Bihari's March 3, 2000 Affidavit: "I was arrested and charged with criminal possession of stolen property in the Fifth Degree." See id. ¶ 62. Gross neither includes the rest of the sentence — which reveals that the arrest was for a misdemeanor offense — nor informs the reader that the District Attorney's Office declined to prosecute the case. See id.

In June 2000, Gross launched amended versions of the "designscam.com" and "manhattaninteriordesign.com" websites. See id. ¶ 90. The new websites are substantially identical to the former version, with two exceptions. See id. First, Gross deleted the statement, "Our goal is to protect you from experiencing the overwhelming grief and aggravation in dealing with someone that allegedly only has intentions to defraud." See id. ¶ 93. Second, he added two hyperlinks — from ...


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