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United States District Court, S.D. New York

July 19, 2004.


The opinion of the court was delivered by: RICHARD CASEY, District Judge


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, "" 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 "," 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 "" and posted the following information on the website:

  In January 1999, Plaintiff discovered that Defendants had registered the domain name, "the" 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, "" 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, "" Defendants then offered to sell Plaintiff a package of sixteen domain names, which included "" domain name, for a total price of $480,000. Defendants never offered to sell only "" 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.


  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 grounds.

  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 claims.
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 Cybersquatting Claim
  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 ""; another is "" 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 "" 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 same market.

  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 Dilution Claims
  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 trademark dilution.


  For the foregoing reasons, Plaintiff's motion for summary judgment is GRANTED in its entirety.

  So Ordered.

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