United States District Court, S.D. New York
July 19, 2004.
TCPIP HOLDING CO., Plaintiff,
HAAR COMMUNICATIONS INC. and RICHARD S. HAAR, Defendants.
The opinion of the court was delivered by: RICHARD CASEY, District Judge
MEMORANDUM OPINION & ORDER
TCPIP Holding Co. ("Plaintiff"), operator of the children's
clothing franchise "The Children's Place," sued Haar
Communications Inc. and Richard S. Haar*fn1 (collectively,
"Defendants") for cybersquatting, trademark infringement, unfair
competition, and trademark dilution after Defendant registered
the domain name, "thechildrensplace.com" and sixty-six other
domain names containing variations on the words "children" and
"place." On May 27, 1999, the Court preliminarily enjoined
Defendants from using these sixty-seven domain names and
generally from using any "colorable imitation" of Plaintiff's
mark. On December 9, 1999, the Court modified its earlier order
to specifically enjoin Defendants from using fourteen additional
domain names. On February 28, 2001, the Second Circuit Court of
Appeals affirmed the preliminary injunction as it related to
several of the domain names that were "so clearly similar to `The
Children's Place' that the differences are hardly noticeable." See TCPIP Holding Co.
v. Haar Communications Inc., 244 F.3d 88, 102 n. 11 (2d Cir.
2001). The Court of Appeals remanded the case for further
proceedings and Plaintiff now moves for summary judgment. For the
reasons set forth below, the motion is GRANTED.
Pursuant to Local Civil Rule 56.1, Defendants were required to
include a separate short and concise statement of any material
facts as to which they contended there exists a genuine issue. In
the absence of such a statement, all material facts set forth in
Plaintiff's 56.1 statement may be deemed admitted. See S.D.N.Y.
Local Civil R. 56.1(b), (c); Giannullo v. City of New York,
322 F.3d 139, 140 (2d Cir. 2003); United States v. All Right, Title
& Interest in Real Property & Appurtenances, 77 F.3d 648, 657-58
(2d Cir. 1996).
Defendants did not submit a controverting Rule 56.1 statement
and thus failed to comply with Local Civil Rule 56.1.*fn2
Nevertheless, because Richard Haar appears pro se the Court has
overlooked the technical deficiency of the submission, see
Zeno v. Cropper, 650 F. Supp. 138, 139 (S.D.N.Y. 1986), and has
viewed the record in the following manner: if there existed some
dispute between Plaintiff's Rule 56.1 statement and Haar's
papers, the facts have been viewed in the light most favorable to
Defendants. On the other hand, any facts in Plaintiff's
Rule 56.1 statement which remain uncontroverted by Haar's papers have been accepted as
true. See Dusaneko v. Maloney, 726 F.2d 82, 84 (2d Cir.
1984); see also Mazza v. City of New York, No. 98 Civ. 2342,
1999 WL 1289623, at *1 (E.D.N.Y. July 13, 1999).
Plaintiff, through its approximately 450 stores, sells
children's clothing, toys and accessories under the mark, "The
Children's Place." From 1992 to 2001, Plaintiff spent $33 million
to advertise the mark. This advertising has helped to generate
more than $2 billion in annual total net sales for Plaintiff.
Since November 1999, Plaintiff has operated a website at the
domain name "childrensplace.com," where customers may buy
Plaintiff's products. From 1999 to 2001, sales through
Plaintiff's website totaled $4 million. Thousands of customers
have visited the website; for example, in March 2001 alone, the
website had over 1.7 million hits (or approximately 57,000 hits a
Haar Communications, Inc., a New York corporation, and Richard
Haar, its president and sole employee, offer consulting and
networking services in the telecommunications area. Haar Inc. was
incorporated on April 24, 1998 and is located in Richard Haar's
Manhattan apartment. Around the fall of 1998, Richard Haar
attempted to develop a portal on the internet to facilitate
web-surfing for materials concerning children. Richard Haar
created a website that would provide links to a broad array of
child-related products, services, and information. On November 9,
1998, Defendants registered the domain name
"thechildrensplace.com" and posted the following information on
THIS IS THE FUTURE HOME OF THE CHILDRENS PLACE THE PLACE FOR YOUR
CHILDREN For more information write firstname.lastname@example.org
In January 1999, Plaintiff discovered that Defendants had
registered the domain name, "the childrensplace.com." By letter
dated February 4, 1999, Plaintiff's counsel requested that
Defendants cease and desist from using Plaintiff's mark;
Defendants declined to do so. From the time that Defendants
registered their domain name until they received Plaintiff's
cease and desist demand, Defendants did not purchase any other
domain names or conduct any business on the website aside from
posting the above notice. After they received the cease and
desist letter, Defendants then proceeded to register sixty-five
domain names, each of which contained the words "children" and
"place" in that order. The names would omit or use different
articles or employ the singular, plural, or possessive
combinations of the two words.
Defendants thereafter attempted to negotiate with Plaintiff
concerning the domain names. At a meeting held on February 22,
1999, Richard Haar outlined his plans to create a children's
internet portal where children and adults could shop for goods
and services in a safe, pornography-free environment. Richard
Haar asked Plaintiff to enter a joint venture with him to develop
his business plan, but Plaintiff relented. Instead, Plaintiff
asked Defendants to name their price for the domain name,
"thechildrensplace.com." In response, Defendants offered to sell
the domain name as part of a package that contained thirty-eight
domain names for $570,000 cash. Five days after doing so,
Defendants revised their previous offer by adding six more names
to the package and increased their asking price to $697,000.
Plaintiff declined the offer and reiterated its price of $30,000
for the single domain name, "thechildrensplace.com." Defendants
then offered to sell Plaintiff a package of sixteen domain names,
which included "thechildrensplace.com" domain name, for a total price of $480,000. Defendants never offered to sell
only "thechildrensplace.com" domain name to Plaintiff.
Plaintiff then commenced this suit, alleging claims of
trademark dilution and infringement and unfair competition.
Thereafter, the Court preliminarily enjoined Defendants from
"using, as part of a domain name or otherwise," Plaintiff's mark
or any "colorable imitation thereof." The Second Circuit affirmed
the preliminary injunction to the extent that it related to
several of the domain names that were "so clearly similar to `The
Children's Place' that the differences are hardly noticeable."
See TCPIP, 244 F.3d at 102 n. 11. While the case was pending
before the Second Circuit, Plaintiff amended its complaint,
adding a claim for cybersquatting under the recently enacted
Anti-Cybersquatting Consumer Protection Act ("ACPA"). Because the
ACPA claim did not form the basis for entry of the preliminary
injunction, the Second Circuit did not have occasion to consider
Federal Rule of Civil Procedure 56(c) provides that summary
judgment is appropriate "if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Fed.R.Civ.P. 56(c). Summary judgment
should only be granted if "the nonmoving party `has failed to
make a sufficient showing on an essential element of [its] case
with respect to which [it] has the burden of proof.'" Berger v.
United States, 87 F.3d 60, 65 (2d Cir. 1996) (quoting Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986)). When viewing the
evidence, the Court must assess the record in the light most
favorable to the nonmovant, resolve all ambiguities and draw all
reasonable inferences in its favor. See Delaware & Hudson Ry.
Co. v. Consol. Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990).
Issues of fact are genuine when "a reasonable jury could return
a verdict for the nonmoving party," and such contested facts are
material to the outcome of the particular litigation if the
substantive law at issue so renders them. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). "If, as to the issue on
which summary judgment is sought, there is any evidence in the
record from any source from which a reasonable inference could be
drawn in favor of the nonmoving party, summary judgment is
improper." Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d
Cir. 1994). Only when it is apparent that no rational trier of
fact "could find in favor of the nonmoving party because the
evidence to support its case is so slight" should a court grant
summary judgment. Gallo v. Prudential Residential Servs., LP,
22 F.3d 1219, 1223-24 (2d Cir. 1994). Here, summary judgment for
Plaintiff is appropriate on both procedural and substantive
I. Summary Judgment Is Granted as to Haar, Inc. on Default
The Second Circuit has stated that for purposes of legal
representation, a corporation may only be represented by a duly
licensed attorney. See Jones v. Niagara Frontier Transp.
Auth., 722 F.2d 20, 22 (2d Cir. 1983); New Card, Inc. v.
Glenns, No. 00 Civ. 4756, 2004 WL 540417, at *3 n. 5 (S.D.N.Y.
Mar. 18, 2004); digiGAN, Inc. v. iValidate, Inc., No. 02 Civ.
0420, 2002 WL 31356506, at *1 (S.D.N.Y. Oct. 4, 2002). Where a
corporation has failed to secure counsel, it may be subject to a
default judgment. See Souzhou Textiles Imp. & Exp. v. Swell
Fashions, Inc., No. 96 Civ. 1386, 1997 WL 13224, at *1 (S.D.N.Y.
Jan 15, 1997); see also New Card, 2004 WL 540417, at *3 n. 5.
Here, Richard Haar attempts to represent Haar Inc. although he
is not a licensed attorney and despite the Court's directive that
the company retain counsel. By motion dated June 14, 2001, Adam
Leitman Bailey requested to be relieved as counsel for Defendants
based on irreconcilable differences as to how the litigation should proceed. Bailey's
request to be relieved as counsel marked the second time in less
than six months that an attorney for Defendants sought to
withdraw from this case. By memo-endorsement dated June 26, 2001,
the Court stated that Mr. Bailey would not be relieved as counsel
until Defendants had secured replacement counsel. At a conference
on August 17, 2001, the Court relieved Bailey and directed
Richard Haar to retain new counsel within three weeks.
Thereafter, Richard Haar informed the Court that he intended to
appear pro se, ultimately filing a notice of appearance on
November 16, 2001. Although Richard Haar desires to represent
himself in this case, this does not erase Haar Inc.'s obligation
to retain counsel. As the Second Circuit has stated,
To allow [the lay individual] to appear pro se in
this suit would be allowing him to flout a
well-established and purposeful public policy by
means of a procedural device. [The lay individual]
chose to accept the advantages of incorporation and
must now bear the burdens of incorporation; thus, he
must have an attorney present the corporation's legal
Jones, 722 F.2d at 23 (quoting Mercu-Ray Indus., Inc. v.
Bristol-Myers Co., 392 F. Supp. 16, 20 (S.D.N.Y. 1974)).
Richard Haar has presented no compelling argument as to why the
Court should overlook this well established requirement. The
Court does not consider the papers submitted by Richard Haar in
his pro se capacity as opposition to the motion on Haar Inc.'s
behalf. As a result, Haar Inc. is in default and on this basis
alone Plaintiff's motion is granted as against it. See e.g.,
Loew v. Kolb, No. 03 Civ. 5064, 2003 WL 22077454, at *1
(S.D.N.Y. Sept. 8, 2003) (granting restraining order in light of
respondent's failure to oppose motion); Garcia v. NYPD PCT 41,
1997 WL 563809, at *3 (S.D.N.Y. Sept. 10, 1997) ("Plaintiff's
failure to file a memorandum of law or any response whatsoever,
standing alone, provides me sufficient basis to grant defendants'
motions to dismiss."); Singh v. New York City Dep't of Corrs., 1995 WL 733560, at *1
(S.D.N.Y. Dec. 12, 1995) (stating that because plaintiff did not
respond to defendants' motion nor sought an extension,
defendants' motion for summary judgment and/or judgment on the
pleadings should be granted on default).
The Court need not reach the substance of Plaintiff's summary
judgment motion as to Haar Inc. Nevertheless, the Court considers
the merits of Plaintiff's claims as against both Defendants.
II. Summary Judgment Is Granted on the Merits as to the
Plaintiff's motion on its cybersquatting claim is granted
because there are no material facts in dispute that would
preclude entry of summary judgment.
Plaintiff contends that Defendants' acts amount to
cybersquatting in violation of the ACPA. The Second Circuit has
described cybersquatting as:
involv[ing] the registration of domain names of
well-known trademarks by non-trademark holders who
then try to sell the names back to the trademark
owners. Since domain name registrars do not check to
see whether a domain name request is related to
existing trademarks, it has been simple and
inexpensive for any person to register as domain
names the marks of established companies. This
prevents use of the domain name by the mark owners,
who not infrequently have been willing to pay
"ransom" in order to get "their names" back.
Sporty's Farm L.L.C. v. Sportsman's Market, Inc.,
202 F.3d 489
, 493 (2d Cir. 2000). In order to prevail under the ACPA, a
plaintiff must show: (1) that it owns a distinctive or famous
mark; (2) the domain name registrant registers, uses, or traffics
in a domain name that is identical or confusingly similar to the
trademark owner's mark; and (3) the domain name registrant had a
bad faith intent to profit from the trademark owner's mark. See
15 U.S.C. § 1125(d)(1)(A); Sporty's Farm, 202 F.3d at 496.
As to the first element, Plaintiff has demonstrated that its
mark is both distinctive and famous. As for distinctiveness, Plaintiff has obtained four
registrations for "The Children's Place" mark on the Principal
Register of the U.S. Patent Trademark Office ("USPTO") without a
need to show that the mark had acquired distinctiveness or a
secondary meaning. This fact creates a rebuttable presumption
that the mark is suggestive, and not merely descriptive.*fn3
See McGregor-Doniger Inc. v. Drizzzle Inc., 599 F.2d 1126,
1132 (2d Cir. 1979). Defendants opposition to Plaintiff's motion
for summary judgment on the cybersquatting claim fails to rebut
this presumption. Accordingly, the Court concludes that
Plaintiff's mark is inherently distinctive.*fn4
Plaintiff has further demonstrated that its trademark is
famous. Plaintiff has introduced uncontroverted evidence showing
that it has recorded sales of approximately $2 billion and has
spent over $33 million to advertise and promote its products from
1992 to 2001. See TCPIP, 244 F.3d at 100; Affidavit of Ryan
A. Schreiber [Schreiber Aff.] ¶¶ 5-6; Ex. A to Affidavit of Keith
E. Sharkin [Sharkin Aff.]. This evidence indicates that Plaintiff
has achieved a degree of fame in the retail marketplace
comparable to stores such as The Gap or Kids "R" Us.
As to the second element under the ACPA, Plaintiff has
demonstrated that Richard Haar has registered domain names that
are identical or confusingly similar to Plaintiff's mark. Haar
has registered at least eighty domain names that are slight
variations of Plaintiff's mark. Indeed, the domain names add or
omit one or two letters of Plaintiff's registered mark. For
example, one of the registered domain names is "thechildrensplaces.com"; another is
"achildrensplace.com." Despite the addition of articles and/or
possessives, the variations remain confusingly similar to
Plaintiff's mark. See Sporty's Farm, 202 F.3d at 497-98.
Moreover, Richard Haar admits that he packaged permutations of
Plaintiff's mark as part of a matrix of domains that Plaintiff
could have purchased. Such packaging further belies Haar's claim
that the names are not confusingly similar.
As to the ACPA's third element, Plaintiff has demonstrated that
Richard Haar had a bad faith intent to profit from the domain
names. Haar attempted to use his ownership of the domain name for
Plaintiff's mark to pitch his joint venture proposal with
Plaintiff. When Plaintiff refused this offer, Richard Haar
submitted no less than three offers to sell back various packages
of domain names (the vast majority of which Haar acquired after
he received Plaintiff's cease and desist letter) for exorbitant
demands of approximately half a million dollars. Moreover, Haar
refused to name a price for "thechildrensplace.com" domain name,
offering only packages of domain names for sale. On the basis of
this conduct, Plaintiff has demonstrated that Defendants' intent
to profit from the domain names was motivated by bad faith.
Accordingly, Plaintiff has established that it is entitled to
summary judgment on its cybersquatting claim.
III. Summary Judgment Is Granted on the Merits as to the
Trademark Infringement and Unfair Competition Claims
To prevail under its claims that Defendants' acts constitute
trademark infringement and unfair competition under the Lanham
Act, Plaintiff must demonstrate that Defendants used, in
commerce, without consent, Plaintiff's "registered mark in
connection with the sale, offering for sale, distribution, or
advertising of any goods," in a manner that is likely to cause
confusion. See 15 U.S.C. § 1114(1)(a).*fn5
Considering the factors established
in the seminal case Polaroid Corp. v. Polarad Electronics
Corp., 287 F.2d 492
(2d Cir. 1961), Plaintiff has demonstrated
that Defendants' use of its mark will likely cause confusion.
First, the record contains undisputed evidence that Plaintiff's
mark is strong. Plaintiff has used its mark for over thirty years
and has sold billions of dollars worth of goods under it.
Moreover, Plaintiff has expended considerable time and money in
advertising its goods under the mark.
Second, there exists no dispute that the marks at issue are
similar. In opposing Plaintiff's motion, Defendants fail to
contest the fact that the domain names they chose to register are
confusingly similar to Plaintiff's mark. In fact, Defendants
admit that after they received the cease and desist letter, they
systematically registered permutations of Plaintiff's mark and
then packaged the domain names for sale to Plaintiff. These
uncontroverted facts illustrate the similarity between the marks.
Third, there exists a sufficient proximity of goods and
services given that Plaintiff and Defendants would operate in the
Fourth, Defendants' bad faith is evident from the record. Not
only did Defendants possess constructive notice of Plaintiff's
mark, but also Defendants registered similar domain names after
receiving the cease and desist letter and attempted to package
these domain names for exorbitant sums to Plaintiff.
Finally, the quality of Plaintiff's products, the fact that the
sophistication of the buyers will not protect consumers from the
confusingly similar marks, and the reality that the unique nature
of the internet increases the likelihood of confusion also weigh in
favor of the conclusion that a strong likelihood of confusion
exists between Plaintiff's mark and the domain names that
Defendants have registered.
For these reasons, Plaintiff is granted summary judgment on its
claims of trademark infringement and unfair competition.
IV. Summary Judgment Is Granted on the Merits as to the Trademark
Plaintiff is also entitled to summary judgment on its claims of
trademark dilution: Plaintiff has demonstrated that its mark is
famous and that Defendants' domain names dilute its mark by
lessening its capacity to identify and distinguish Plaintiff's
goods and services. See 15 U.S.C. § 1125(c), 1127; Clinique
Lab., Inc. v. Dep Corp., 945 F. Supp. 547, 561 (S.D.N.Y. 1996).
Plaintiff has demonstrated that its mark is famous through
uncontroverted affidavits attesting to Plaintiff's advertising
and sales. (Schreiber Aff. ¶¶ 5-6; Ex. A to Sharkin Aff.) For
example, Plaintiff has used its mark in connection with its
retail stores services for over thirty years and in connection
with children's clothing and accessories since 1991. (Schreiber
Aff. ¶¶ 3-4.) Moreover, Plaintiff has expended well over $33
million to promote its mark and has generated more than $2
billion in annual total net sales. (Id. ¶¶ 5-6.) Plaintiff's
mark has also received favorable, unsolicited publicity in news
articles concerning its retail operations. (Id. ¶ 5; Ex. A-B of
Schreiber Aff.) This uncontroverted evidence demonstrates that
Plaintiff's mark is famous.
Finally, Defendants' use of Plaintiff's mark and the slight
variations of it dilutes its distinctiveness and diminishes its
goodwill. For example, Plaintiff's capacity to identify its goods
and services by means of the internet is lessened as customers
are unable to locate Plaintiff on the internet using the domain
name corresponding to Plaintiff's mark. Moreover, Defendants' use
of Plaintiff's mark on their website further dilutes the mark.
Plaintiff, therefore, is granted summary judgment on its claim of
For the foregoing reasons, Plaintiff's motion for summary
judgment is GRANTED in its entirety.