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TCPIP HOLDING CO. v. HAAR COMMUNICATIONS INC.

July 19, 2004.

TCPIP HOLDING CO., Plaintiff,
v.
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.

BACKGROUND

  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 day).

  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 the website:
THIS IS THE FUTURE HOME OF THE CHILDRENS PLACE THE PLACE FOR YOUR CHILDREN For more information write haarcom@yahoo.com
  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 this claim.

  DISCUSSION

  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 ...


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