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Bihari v. Gross

United States District Court for the Southern District of New York


Judge Shira A. Scheindlin:

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). …

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. Since 1989, she has been continuously doing business as Bihari Interiors or Marianne Bihari d/b/a Bihari Interiors. The Bihari Interiors name is well known, particularly in the New York City high-end residential interior design market. Bihari does not engage in paid advertising to promote her services; rather, she relies on referrals from clients and other design-industry professionals.

Craig Gross is a former client of Bihari Interiors. Yolanda Truglio is Gross's girlfriend. 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"). For various reasons not relevant to this action, the relationship between Bihari and Gross soured, and the Contract was never completed.

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"). On August 12, 1999, Gross submitted an amended verified complaint in the State Suit. On April 3, 2000, the state court dismissed two of the fraud claims, but granted Gross a right to replead one of those claims. Gross has since filed a second amended complaint which is currently pending in New York State Supreme Court.


C. The Websites

On March 7, 2000, Bihari served Gross with the instant Complaint and motion for injunctive relief. Gross then offered to take down the "" website pending a preliminary injunction hearing. He has since relinquished the domain names "" and "" and is taking all necessary steps to return those domain names to Network Solutions, Inc., the provider of domain name registrations.

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

All of the Gross websites use "Bihari Interiors" as metatags embedded within the websites' HTML code. 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."


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." Directly beneath this title are three photographic reproductions of scenic New York. 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. Also appearing on the first page of the websites are various hyperlinks 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 E-Mail," "Sign or Read the Guest Book," and "Participate in the Bihari Poll."

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.

Below this text a viewer finds additional hyperlinks to "The Initial Meeting," "The Contract," "The Scam," and "The Law Suit" [sic]. 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.

In addition to these comments, the Gross websites contain a "guestbook" where visitors leave messages for other visitors to the websites. Some of the guestbook entries indicate that potential clients declined to retain Bihari's services because of the Gross websites. Other messages simply comment or inquire about the Gross websites' design. Many other entries disparage Bihari and Bihari Interiors. 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.

The "" and "" 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." 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.


III. Applicable Legal Standard

"Because of the great potential for harm which may occur from the issuance of a preliminary injunction, the party seeking the injunction must sustain a heavy burden." Ringling Brothers-Barnum & Bailey Combined Shows, Inc. v. B.E. Windows Corp., 937 F. Supp. 204, 207 (S.D.N.Y. 1996). The party seeking such relief must demonstrate: (1) likelihood of irreparable harm should the injunction be denied; and (2) either (a) likelihood of ultimate success on the merits, or (b) sufficiently serious questions going to the merits and a balance of hardships tipping decidedly toward the party seeking relief.

IV. Discussion

A. The Lanham Act Claims

1. Irreparable Harm

"Irreparable harm is an injury that is not remote or speculative but actual and imminent, and for which a monetary award cannot be adequate compensation." Tom Doherty Assocs. v. Saban Entertainment, Inc., 60 F.3d 27, 37 (2d Cir. 1995). In a trademark infringement case, a presumption of irreparable harm arises where a plaintiff makes a showing of likelihood of confusion. A showing of likelihood of confusion, therefore, will establish the irreparable harm requisite for a preliminary injunction.

2. Likelihood of Success on the ACPA Claim

On November 29, 1999, Congress adopted the ACPA "to remedy the perceived shortcomings of applying the FTDA [Federal Trademark Dilution Act] in cybersquatting cases." Sporty's Farm L.L.C. v. Sportsman's Market, Inc., 202 F.3d 489, 495 (2d Cir. 2000). To establish a claim of cybersquatting, a plaintiff must show: (1) that she had a distinctive mark at the time of the registration of the domain name; (2) that the defendant "registers, traffics in, or uses a domain name" that is identical or confusingly similar to that mark; and (3) that the defendant has "a bad faith intent to profit from that mark." 15 U.S.C. § 1125(d)(1). A preliminary injunction is a remedy authorized by the ACPA.

In March 2000, Bihari claimed that Gross's registration of "" and "" violated the ACPA because he registered the confusingly similar domain names with a bad faith intent to profit by pressuring Bihari into settling the State Suit at terms favorable to Gross. Since then, Gross has abandoned those two websites and promised to transfer the domain names back to Network Solutions, Inc.

However, during the August 28 telephone conference, Bihari's attorney claimed that use of "Bihari Interiors" in the metatags violates the ACPA. Neither Bihari's attorney, nor this Court, has been able to find a single case applying the ACPA to metatags. Although no court has expressly stated that the ACPA does not apply to metatags, the plain meaning of the statute and its legislative history make this conclusion apparent. See 15 U.S.C. § 1125(d)(A)(ii) (ACPA provides an action against one who "registers, traffics in, or uses a domain name....") (emphasis added); Mattel, Inc. v. Internet Dimensions Inc., 2000 WL 973745 at *2 (S.D.N.Y. July 13, 2000) (Congress's purpose in adopting the ACPA was to "protect consumers and American businesses ... by prohibiting the bad-faith and abusive registration of distinctive marks as Internet domain names....") Therefore, the ACPA is no longer a basis for preliminary injunctive relief as Gross has voluntarily relinquished the Bihari domain name.

3. Likelihood of Success on the Trademark Infringement Claim

A claim of trademark infringement under § 43(a) of the Lanham Act requires the plaintiff to show (1) that she has a valid mark that is entitled to protection under the Lanham Act, and (2) that use of that mark by another "is likely to cause confusion . . . as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of [the defendant's] goods, services, or commercial activities by another person." 15 U.S.C. § 1125(a)(1)(A); Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503, 1508-09 (2d Cir. 1997). As discussed more fully below, Bihari has failed to demonstrate a likelihood of success on the merits of this claim because Gross's use of the "Bihari Interiors" mark in the metatags is not likely to cause confusion and is protected as a fair use.

a. The Strength of Bihari's Mark

"Bihari Interiors" is not a registered trademark with the United States Patent and Trademark Office. Rather, Bihari claims that she is entitled to a common-law service mark. Registration is not a prerequisite to protection under § 43(a) of the Lanham Act. The four judicially-developed categories of trademarks, listed in ascending order of their strength are (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. A generic mark can never be protected, but a descriptive mark can obtain registration if it has acquired "secondary meaning." See Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 344 (1999). "Fanciful, arbitrary and suggestive marks are deemed inherently distinctive. Their intrinsic nature serves to identify a particular source of a product, so they will be automatically protected" without a showing of secondary meaning. Id. A term is descriptive if it "tells something about a product, its qualities, ingredients or characteristics." Estee Lauder Inc., 108 F.3d at 1509. In contrast, a term is suggestive if it "requires imagination, thought, and perception to reach a conclusion as to the nature of the goods" or services it represents. Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1039 (2d Cir. 1992).

Generally, personal names used as trademarks are regarded as descriptive terms, protected only if they have acquired distinctive and secondary meaning. However, "Bihari Interiors" is a suggestive rather than a descriptive mark because it suggests Bihari's services. The mark requires an imaginative leap to correctly identify Bihari's services. The word "interiors" does not immediately identify interior design services. It could as easily describe a company producing home furnishings, seat covers for automobiles or services such as carpet cleaning or wall painting. As a suggestive mark, "Bihari Interiors" is inherently distinctive and entitled to protection.

b. Commercial Use

The plain language of the Lanham Act makes apparent that § 43(a) is only applicable to commercial uses of another's mark. First, the statute only applies to actions taken by individuals "in connection with any goods or services." Second, § 43(a) is limited to uses likely to cause confusion "as to the origin, sponsorship, or approval of [the defendant's] goods, services, or commercial activities...." Third, § 43(a) is limited by 15 U.S.C § 1125(c)(4)(B), which states that "noncommercial use of a mark" is not actionable under the Lanham Act.

[T]he Second Circuit has explained that "the 'core notion' of commercial speech includes 'speech which does no more than propose a commercial transaction.'" Bad Frog Brewery, Inc. v. New York State Liquor Authority, 134 F.3d 87, 97 (2d Cir. 1998).

"The mere use of another's name on the Internet ... is not per se commercial use." Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161, 1166 (C.D. Cal. 1998). Nor do the Gross websites offer any "commercial transaction." Defendants are not interior designers and do not sell visitors any products or services. However, the Gross websites contain hyperlinks to other websites which promote the services of other interior designers. The Gross websites effectively act as a conduit, steering potential customers away from Bihari Interiors and toward its competitors, thereby transforming his otherwise protected speech into a commercial use.

c. Likelihood of Confusion

Plaintiffs argue that inclusion of "Bihari" and "Bihari Interiors" in the metatags of the Gross websites is likely to cause confusion. Plaintiffs overstate their case. Because the purpose of the websites is to injure Bihari Interiors commercially, no reasonable viewer would believe that the disparaging comments regarding Bihari's business ethics—comments which appear on the first page of the websites—are endorsed by Bihari. Moreover, in the instant case, there is no "lengthy delay between attempting to access plaintiff's home page and learning that one has failed to do so." Therefore, any likelihood of confusion is minimal.


e. The Fair Use Doctrine

Even if the Gross websites cause consumer confusion, use of the "Bihari Interiors" mark in the metatags is protected as a fair use. The Lanham Act codified a common law fair use defense in 15 U.S.C. § 1115(b)(4). The fair use doctrine applies to the Internet as readily as to the print media.

"Fair use is established when the challenged term is a use, otherwise than as a mark, ... of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party...." 15 U.S.C. § 1115(b)(4). In other words, "fair use permits others to use a protected mark to describe aspects of their own goods." Car-Freshner Corp. v. S.C. Johnson & Son, Inc., 70 F.3d 267, 270 (2d Cir. 1995). It is not necessary that the plaintiff's mark be classified as "descriptive" to benefit from the fair use defense. Instead, the central considerations are whether the defendant has used the mark (1) in its descriptive sense, and (2) in good faith.

(i) Use of the Term in its Descriptive Sense

The requirement that a trademark be used in its descriptive sense is met where the mark is used in an index or catalog, or to describe the defendant's connection to the business claiming trademark protection. Applying this general rule to the metatag context, Professor McCarthy states: "The fair use defense applies ... if another's trademark is used in a meta tag solely to describe the defendant or defendant's goods or services . . . ." 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 25:69 at 25-137 (4th ed. 1999). This position finds support in recent cases. In Playboy Enters., Inc. v. Welles, 7 F. Supp. 2d 1098 (S.D. Cal. 1998), Playboy sought to enjoin Terri Welles, a former "Playmate of the Month" and "Playmate of the Year", from utilizing the trademarked terms "Playboy" and "Playmate" in the metatags of Welles's website. The court denied the injunction, holding that use of the trademarked terms in the metatags is a fair use. The court stated:

With respect to the meta tags, the court finds there to be no trademark infringement where defendant has used plaintiff's trademarks in good faith to index the content of her website. The meta tags are not visible to the websurfer although some search engines rely on these tags to help websurfers find certain websites. Much like the subject index of a card catalog, the meta tags give the websurfer using a search engine a clearer indication of the content of a website. The use of the term Playboy is not an infringement because it references not only her identity as a "Playboy Playmate of the Year 1981," but it may also reference the legitimate editorial uses of the term Playboy contained in the text of defendant's website.

Here, Gross has included "Bihari Interiors" in the metatags of his websites because the websites provide information about Bihari Interiors and Marianne Bihari. Gross has not used the terms "Bihari Interiors" and "Bihari" in the metatags as a mark, but rather, to fairly identify the content of his websites. In short, Gross uses the "Bihari Interiors" mark in its descriptive sense only.

Moreover, use of the "Bihari Interiors" mark in the metatags of his websites is the only way Gross can get his message to the public. A broad rule prohibiting use of "Bihari Interiors" in the metatags of websites not sponsored by Bihari would effectively foreclose all discourse and comment about Bihari Interiors, including fair comment. Courts must be particularly cautious of overextending the reach of the Lanham Act and intruding on First Amendment values. …

(ii) Gross's Good Faith

To benefit from the defense of fair use, Gross must have acted in good faith. The inquiry into a defendant's good faith focuses on whether "the defendant adopted its mark with the intention of capitalizing on plaintiff's reputation and goodwill and any confusion between his and the senior user's product." Lang v. Retirement Living Pub. Co., Inc., 949 F.2d 576, 583 (2d Cir. 1991).

Bihari argues, in a conclusory fashion, that Gross did not adopt the "Bihari Interiors" mark in good faith. Rather, Gross intended to divert individuals searching for information about Bihari Interiors to his websites. This argument is not persuasive. Metatags serve as a cataloging system for a search engine. Gross has the right to catalog the contents of his websites. Furthermore, the fact that Gross knew of the prior use of the "Bihari Interiors" mark does not in itself prove a lack of good faith. "Prior knowledge of [plantiff's] trade name does not give rise to a necessary inference of bad faith, because adoption of a trademark with actual knowledge of another's prior registration ... may be consistent with good faith." Lang, 949 F.2d at 583-84.

In addition, the domain names of the Gross websites and the disclaimer prove that Gross is using "Bihari Interiors" in good faith. The domain names of his websites in no way confuse Internet users into believing that his site is actually that of Bihari Interiors. Moreover, the Gross websites include a disclaimer: "Keep in mind that this site reflects only the view points and experiences of one Manhattan couple...." Although a disclaimer cannot insulate Gross from liability, it indicates good faith use of the service marks and weighs in Gross's favor. Even if the Gross websites are mean-spirited and vindictive, bad faith cannot be imputed as well to Gross's use of the "Bihari Interiors" mark in the metatags.


V. Conclusion

For the foregoing reasons, Bihari's motion for a preliminary injunction is denied in its entirety. …




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