ISSUE PRECLUSION UNDER THE ACPA: CAN INTERNET DOMAIN NAMES BE COLLATERALLY ESTOPPED?

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1 1302 Vol. 93 TMR ISSUE PRECLUSION UNDER THE ACPA: CAN INTERNET DOMAIN NAMES BE COLLATERALLY ESTOPPED? By Lile Deinard and Ryan Candee I. INTRODUCTION That the Internet poses a challenge to pre-existing legal concepts and doctrines is a familiar notion. It perhaps is surprising, then, that Congress deliberately has chosen to incorporate an ancient common law doctrine in response to the problem of cybersquatting, the bad faith infringement of trademarks in Internet domain names. But that is exactly what Congress did when, as part of the Anticybersquatting Consumer Protection Act ( ACPA ), 1 it provided a mechanism for settling disputes regarding cybersquatting and rights to certain domain names where the alleged cybersquatter is not subject to the personal jurisdiction of U.S. courts. 2 This procedure calls for the holder of the mark to bring suit against the domain names themselves (the res ) in a proceeding based on an emblem of oldfashioned formalism in rem jurisdiction. 3 While this itself is an interesting wrinkle, even more intriguing is the situation where an alien registrant cybersquats through domain names registered in Partner in the law firm of Dorsey & Whitney, New York, New York, Associate Member of the International Trademark Association. Ms. Deinard s practice focuses on trademark, Internet and e-commerce, copyright, brand management and domain name disputes. Ms. Deinard also has experience in merchandising agreements and false advertising cases. Ms. Deinard represented Harrods Limited in formation of its joint venture with Otto Versand to establish their retail website harrodsonline. She also represented The Ritz Hotel, Ltd. in Paris in negotiation of a world wide License Agreement with Ritz-Carlton Hotel regarding the use of the Ritz trademark for hotel and restaurant services. Dorsey & Whitney LLP served as attorneys for Harrods of London, one of the parties in the primary case discussed in this article, and both authors provided counsel to Harrods in connection with this dispute. Associate in the Trial Department of Dorsey & Whitney, New York, New York, Associate Member of the International Trademark Association. Dorsey & Whitney LLP served as attorneys for Harrods of London, one of the parties in the primary case discussed in this article, and both authors provided counsel to Harrods in connection with this dispute U.S.C. 1125(d) U.S.C. 1125(d)(2)(A)(ii). A markholder must file suit either under the ACPA s in personam provisions or its in rem provisions it cannot bring suit under both simultaneously. Alitalia-Linee Aeree Italiene v. Casinoalitalia.com, 128 F. Supp. 2d 340 (E.D. Va. 2001). 3. Id.

2 Vol. 93 TMR 1303 multiple judicial districts and where the suit filed in one district, with all due findings of fact, is resolved with finality before the others commence. II. THE ACPA Under the ACPA, a party may be held personally liable to a holder or holders of distinctive, famous, or registered marks (including a personal name where appropriate) if that party, with bad faith intent to profit... registers, traffics in, or uses a domain name that is identical to a distinct, famous, or registered mark, or is confusingly similar to a distinct or famous mark. 4 The Act provides an non-exhaustive list of nine factors for courts to consider when determining whether domain names were registered in bad faith. 5 It also makes several distinctions between suits where the alleged cybersquatter is subject to the personal U.S.C. 1125(d)(1)(A). Whether one can bring infringement or dilution actions, which do not require proof of bad faith, under the ACPA s in rem provisions is an open question. The 4th Circuit has provided conflicting answers. See Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 232 (4th Cir. 2002) (yes); Porsche Cars North America, Inc. v. Porsche.net, 302 F.3d 248, (4th Cir. 2002) (no). In the Southern District of New York the answer is no. BroadBridge Media, L.L.C. v. Hypercd.com, 106 F. Supp. 2d 505, 511 (S.D.N.Y. 2000) U.S.C. 1125(d)(1)(B)(i). These factors are: (I) the trademark or other intellectual property rights of the person, if any, in the domain name; (II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person; (III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; (IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name; (V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site; (VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct; (VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct; (VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and (IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of this section Id. The ACPA also provides an affirmative defense to bad faith: (ii) Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful. 15 U.S.C. 1125(d)(1)(B)(ii).

3 1304 Vol. 93 TMR jurisdiction of U.S. courts and those where it is not. For the former, the relevant provisions of the Federal Rules of Civil Procedure govern service of process and venue, and the mark holder may seek a wide range of remedies, including both damages and injunctive relief. 6 For the latter, effective service of process requires the mark holder both to send notice by post and to the addresses provided by the alleged cybersquatter to the registrar and to publish notice as directed by the court after filing the action. 7 Venue will lie in the judicial district where the registrar or registry is located. 8 If, and only if, the registrar or registry is not located in the United States, venue will lie in the judicial district where documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are deposited with the court. 9 In proceedings based on in rem jurisdiction, the only available remedy is the transfer or cancellation of the domain name; damages are not recoverable and there is no personal liability. 10 III. MULTIPLE LAWSUITS OVER THE SAME ESSENTIAL CLAIM Under this framework, a single dispute between a mark holder and alleged cybersquatter may require multiple cases to be filed and tried. This will happen where the alleged cybersquatter is not subject to the personal jurisdiction of any U.S. court, and has registered multiple allegedly infringing domain names with registrars or registries located in more than one federal judicial district. This is the situation that faced the owner of the wellknown HARRODS name and mark, where the Argentina-based cybersquatter, not subject to personal jurisdiction, registered U.S.C. 1116(a), 1117(a) U.S.C. 1125(d)(2)(B). The manner of publication, and not the decision whether to publish, lies within the discretion of the court. Shri Ram Chandra Mission v. Sahajmarg.org, 139 F. Supp. 2d 721, (E.D. Va. 2001) U.S.C. 1125(d)(2)(A), 15 U.S.C. 1125(d)(2)(C)(i). The Fourth Circuit has held that in rem jurisdiction, based on this provision, does not violate due process. Harrods, 302 F.3d at U.S.C. 1125(d)(2)(C)(ii). Unlike the jurisdictional basis discussed in Harrods, the constitutionality of in rem jurisdiction based on this provision has not been determined. However, there are cases that suggest that there may be constitutional problems in applying. See Mattel, Inc. v. Barbie-Club.com, 310 F.3d 293, (2d Cir. 2002) (interpreting ACPA to grant jurisdiction only where registrar or other domain name authority is located and noting that such analysis avoided constitutional question); Fleetboston Fin. Corp. v. Fleetbostonfinancial.com, 138 F. Supp. 2d 121 (D. Mass. 2001) (raising constitutional concerns regarding prospect of bringing suit in forum other than that where registry, registrar, or other domain name authority is located) U.S.C. 1125(d)(2)(D)(i).

4 Vol. 93 TMR 1305 disputed domain names with a Virginia-based registrar and 192 with a Maryland-based registrar. Harrods brought an in rem action against the domain names in the District of Maryland and Eastern District of Virginia. The litigation in Maryland was stayed while the litigation in the Eastern District of Virginia s rocket docket quickly ran its course and ended in a favorable decision by the Fourth Circuit Court of Appeals. 11 In the Virginia litigation, the registrant provided counsel for the domain names and conducted their defense while technically remaining a nonparty. Both the District Court and the Fourth Circuit found that (a) Harrod s mark was famous; (b) the domain names were confusingly similar to Harrod s mark; and (c) the registrant registered the domain names in bad faith. In finding bad faith, the courts looked in part at the registrant s behavior in registering both the Virginia domain names and the Maryland domain names. 12 Upon the favorable termination of the Virginia litigation, Harrod s attention turned to the pending Maryland litigation. The immediate issue presented in the Maryland case was: could Harrods invoke issue preclusion as to the 192 domain names before the Maryland federal district court based on the Virginia district court s finding that the sixty different domain names had been registered in bad faith? 13 In order to do so, Harrods would need to meet the Fourth Circuit s five-factor test for each issue it would seek to preclude. The party seeking to preclude an issue must establish that: (1) the issue sought to be precluded is identical to one previously litigated; (2) the issue must have been actually determined; (3) determination of the issue must have been a critical and necessary part of the decision in the prior proceeding; (4) the prior judgment must be final and valid; and (5) the party 11. Case law from the Fourth Circuit is especially relevant to this discussion because of the unusually high number of primary domain name registrars located within the Fourth Circuit. 12. Other than the location of their respective registrars, there was no real difference between the Virginia and Maryland-based names. The Virginia-based names included harrodsfinancial.net and harrodsstore.net, while the Maryland-based names include harrodsinvestments.net and harrodsmarket.net. 13. Of course, there was the possibility that a finding of bad faith would be virtually irrelevant in the Maryland litigation. As noted elsewhere, the Harrods court, in addition to upholding the finding of bad faith, also ruled that infringement and dilution claims could be brought under the in rem provisions of the ACPA. Apart from the bad faith requirement, the only meaningful difference between infringement and cybersquatting claims as grounds for cancellation and transfer of domain names is the fact that the former requires a finding of likelihood of confusion while the latter requires a finding that the domain name is confusingly similar. 15 U.S.C. 1114(1)(a), 1125(a), 1125(d)(1)(A). However, that they were in fact the same for the present purpose could not be assumed. Moreover, the Harrods court s decision was not and is not the settled law of the Fourth Circuit, let alone the rest of the country, and the possibility of the Supreme Court issuing a contrary decision also was of consequence. For both of those reasons, it was considered important to establish bad faith in the Maryland litigation.

5 1306 Vol. 93 TMR against whom [issue preclusion] is asserted must have had a full and fair opportunity to litigate the issues in the previous forum. 14 Of these five, two were potentially problematic the requirement that the issues be identical, and that the party against whom issue preclusion is asserted must have had a full and fair opportunity to litigate the issue in the previous forum. 15 A settlement was reached in the Maryland litigation leading to entry of judgment in favor of Harrods and the transfer of the 192 domain names to Harrods. Thus, this point became moot. What follows is the analysis of this prospect had such an issue been presented to the Maryland federal court. A. Identity of Issues Given the complex nature of the evaluation associated with the nine-factor test for bad faith, the identity of issues requirement seemed daunting at first blush. However, by analyzing each factor individually, the problem largely went away. One could avoid not only the need to compare the relative weight of the various factors, but also would only need to establish the identity of only those issues found to be dispositive in Harrods favor in the Virginia litigation. The task would have been made even simpler by the fact that the findings regarding those factors weighing in Harrods favor relied exclusively on evidence and circumstances common to both the Virginia domain names and the Maryland domain names. The trial court in the Virginia litigation even went so far as to cite certain Maryland domain names as evidence of the registrant s intent to divert Harrod s customers. Of course, this will not be possible in every case, and those defending domain names would want to question whether a particular finding depended at least partially on evidence or circumstances peculiar to the domain names at stake in the first case. Another possible objection to this line of attack from a prevailing mark holder would be that it amounts to cherry picking, which is inappropriate because it severs issues from the overall context in which they were evaluated and because it constitutes non-mutual offensive issue preclusion. However, the latter is not likely to bear fruit because at least one Fourth Circuit court has explicitly rejected it, 16 while the former is extremely factdependent Sedlack v. Braswell Servs. Group, Inc., 134 F.3d 219, 224 (4th Cir. 1998). 15. Another requirement, the necessity of the issue to resolve the prior proceeding, may or may not be applicable in cases where infringement and dilution claims are brought along with ACPA claims. See supra n In re Microsoft Corp. Antitrust Litig., 232 F. Supp. 2d 534, 535 (D. Md. 2002). This logic should apply to in rem cases under the ACPA because there is no opportunity for the mark holder to join the actions and the separate lawsuits exist only because the alleged

6 Vol. 93 TMR 1307 B. Opportunity to Contest the Issue in Previous Forum This requirement presented at once the most difficult and interesting problem. In the Fourth Circuit, this requirement means that the preclusive effect of a judgment may be invoked only against parties and their privies. 18 Under these circumstances, the question was whether two discrete sets of Internet domain names, with a common registrant, should be considered privies of one another, or whether the court should simply disregard the form of the in rem proceedings and treat the suits as what they were in substance two actions, each of which involved the same persons and a common nucleus of facts. Counsel for domain names in such a case would have at least two arguments in their favor. First, on a formal level, the two sets of domain names are distinct, discrete entities that have no direct relationship to one another, despite their common ownership. Because, as traditionally defined, the concept of privity implies some sort of close relationship, issue preclusion would seem to be barred under this analysis. A second argument is that to allow issue preclusion under these facts would introduce a proposition of dubious constitutionality that U.S. courts could burden an alleged cybersquatter with a finding that it acted in bad faith, even though those courts never had personal jurisdiction over that party. 19 This is precisely what the mark holder would seek. The registrant would lose its rights to the second set of domain names because of a finding that it acted in bad faith by a court that had no jurisdiction over it. The first argument is the weaker of the two. Within the context of issue and claim preclusion, the Fourth Circuit has moved decisively away from formal definitions of privity towards substantive and functional ones. 20 In other words, courts will apply issue and claim preclusion when the parties are close enough to justify doing so. Substance, not form, governs. For similar reasons, the constitutional argument could also fail. Though the Fourth Circuit has not spoken on this precise issue, the Second Circuit has done so. In the Second Circuit, the cybersquatter refuses to submit to the jurisdiction of U.S. courts. Cf. Parklane Hosiery Co. v. Shore, 439 U.S. 322, , 99 S. Ct. 645, (1979) (offensive collateral estoppel permissible where plaintiff had neither opportunity to join nor consolidate prior action). 17. Regardless of whether or not the identity of issues exists for findings of bad faith, undoubtedly a finding that the mark holder s mark is either famous or distinct would easily pass this test. This would be relevant not only to the proceedings explicitly authorized by the ACPA, but also those based on infringement or dilution. 18. Nash County Bd. of Educ. v. Biltmore Co., 640 F.2d 484, 493 (4th Cir. 1981). 19. See Parklane Hosiery Co., 439 U.S. at 329, n.7, 99 S. Ct. at 650, n Nash County, 640 F.2d at 494.

7 1308 Vol. 93 TMR findings made in an in rem proceeding in a forum where a party conducts the defense but is not subject to personal jurisdiction may nonetheless preclude that party from contesting the issue in a later in personam suit. 21 Both cases that ruled on this issue held that conducting the litigation on behalf of the property constituted a full and fair opportunity to litigate the matter, and thus did not violate due process. However, it bears noting that these cases are neither binding in the Fourth Circuit nor without criticism. Wright and Miller characterize the Central Hudson court s reasoning as puzzling, noting that the Court refused to apply claim preclusion because it found the fact that a charterer of a boat had conducted its defense was insufficient to support finding that it was in privity with the boat. 22 Arguably, the Second Circuit s reasoning rests on a dubious distinction between the privity requirement for claim preclusion and the full and fair opportunity to litigate requirement for issue preclusion. This would be especially compelling in the Fourth Circuit, which has disregarded both the distinction between claim and issue preclusion and that between the privity requirement and the full and fair opportunity to litigate requirement when deciding which parties may be precluded. 23 C. Identity of Interest The question still remains whether the two sets of domain names, without any direct relationship, may be considered so close that a court would be justified in treating them as the same party for purposes of issue preclusion. The Fourth Circuit has held that privity substantively designates... a person so identified with a party to former litigation that he represents precisely the same legal right in respect to the subject matter involved. 24 Given that, in all meaningful aspects, the factual and legal issues and 21. Johnston v. Arbitrium (Cayman Islands) Handels AG, 198 F.3d 342, (2d Cir. 1999) (individual directors of corporation who conducted litigation in corporation s name in connection with in rem proceeding regarding ownership of shares bound by findings in later in personam proceeding); cf. Central Hudson Gas & Electric Corp. v. Empresa Naviera Santa S.A., 56 F.3d 359, (2d Cir. 1995) (owner of defendant vessel in in rem proceeding controlled litigation and thus was bound in subsequent in personam action) Wright & Miller, Federal Practice and Procedure 4451 n.31 (3d ed. 2002). 23. See, e.g., Jones v. Securities & Exchange Comm n, 115 F.3d 1173, (4th Cir. 1997) (citing Comite de Apoyo a los Trabajadores Agricolas v. U.S. Dep t of Labor, 995 F.2d 510 (4th Cir. 1993), a case dealing with issue preclusion, as authority governing the standard for privity in claim preclusion cases). 24. Nash County, 640 F.2d at 484. See also Virginia Hosp. Assoc. v. Baliles, 830 F.2d 1308, (4th Cir. 1987). There is also authority, albeit indirect and stale, that the owner of the property in an in rem proceeding is a per se party to that proceeding. See Dupasseur v. Rochereau, 88 U.S. 130, 136 (1874); Mankin v. Chandler, 16 F. Cas. 625, 626 (E.D. Va. 1823).

8 Vol. 93 TMR 1309 interests surrounding the two sets of domain names were identical, and that both sets of domain names incorporate the HARRODS trademark albeit in combination with other and different words, this sort of substance-over-form analysis would heavily favor the mark holder. Counsel for the domain names could argue that the Fourth Circuit s test represents the adoption of the virtual representation theory of privity a point unsettled within the Fourth Circuit. 25 The Nash court, in articulating the abovementioned standard, noted that a person may be bound by a judgment even though not a party if one of the parties to the suit is so closely aligned with his interests as to be his virtual representative. 26 This is significant because the virtual representation theory imposes one additional requirement that the party in the first proceeding must have been accountable to the party in the second proceeding. 27 However, this last condition is based on due process concerns, and invoking it would require the court to determine whether the first group of Internet domain names was accountable to the second group, and whether the latter had been deprived of their due process rights an inquiry the court might find absurd. 28 It seems likely that the Johnston and Nash approaches would produce similar results for an alleged cybersquatter who has registered domain names in separate judicial districts. The functional, substantive approach contained in both certainly would favor the allegedly aggrieved markholder more than would a formalistic approach to privity. Under the Johnston approach, it would be permissible to bind the cybersquatter itself in future proceedings that it would also be permissible to bind the cybersquatter s property seems inevitable. Similarly, the Nash approach would likely deem the two sets of domain names 25. The virtual representative theory is a departure from, but not complete abandonment of, the more formal requirement of contractual privity. It permits the application of issue preclusion where the party in the first suit is so similar in status and motivation to a party in the second suit that it may be deemed to have served as the second party s virtual representative. The operative principle is that it is fair to bind the second party so long as it is, for the purposes of the litigation, the same as the first party. See 13 Wright and Miller, Federal Practice and Procedure Nash County, 640 F.2d at Klugh v. United States, 818 F.2d 294, 300 (4th Cir. 1987). 28. See United States v. One 1975 Chevrolet K-5 Blazer, 495 F. Supp. 737 (W.D. Mich. 1980). That court noted: The claimants argue that the defendant Blazer was not a party to the criminal case, and may not now be collaterally estopped. This formalistic analysis must be rejected. As (citation omitted) makes clear, the historical accident that forfeiture actions are styled in rem must not mask the reality that a person owns the contested property. The relevant inquiry is thus whether the claimant was a party to a prior suit, not the chattel. Id. at 742, n.6.

9 1310 Vol. 93 TMR sufficiently similar to warrant binding the set involved in the second action, unless the court hearing the second action were to insist upon adhering to the requirement that the first set of domain names be accountable to the second. IV. THE RELATIONSHIP BETWEEN COLLATERAL ESTOPPEL, BAD FAITH, AND THE AVAILABILITY OF INFRINGEMENT AND DILUTION CLAIMS UNDER THE ACPA S IN REM PROVISIONS Prior to the Harrods decision, the question of whether in rem proceedings under the ACPA were limited to the cause of action set forth by the ACPA was unsettled within the Fourth Circuit. Ironically, though the Harrods decision directly addressed this issue, 29 the matter remains unresolved, and in the Fourth Circuit it is still unclear whether a mark holder may now bring in rem domain name cancellation proceedings alleging not only the elements set forth by 15 U.S.C. 1125(d)(1)(A), but also causes of action based on infringement 30 and dilution. 31 The Harrods court ruled that mark holders could bring infringement and dilution claims under the ACPA, 32 but on the very same day a separate panel in the Fourth Circuit ruled that dilution claims may not be brought under the ACPA. 33 Whether either case takes precedence is far from certain. 34 Technically, the only authority in the Fourth Circuit regarding the availability of infringement claims under the ACPA is Harrods court s decision permitting such claims, though a court persuaded by the Porsche court s reasoning could well rule the other way. Outside of the Fourth Circuit, there are district courts that either have yet to take a position on this question 35 or have limited in rem proceedings to the bad-faith provisions of the ACPA. 36 The ultimate practical difference between those districts 29. Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 232 (4th Cir. 2002) U.S.C (registered marks); 15 U.S.C. 1125(a) (distinctive marks) U.S.C. 1125(c). 32. Harrods, 302 F.3d at Porsche Cars North America, Inc. v. Porsche.net, 302 F.3d 248, (4th Cir. 2002). 34. The Harrods court s decision did not depend upon this specific finding, whereas the Porsche court s did. Thus, the former may be considered dicta and thus less persuasive. However, the Harrods court cites the Porsche court s opinion on a separate issue, suggesting at least an awareness of that decision. Harrods, 302 F.3d at See Cable News Network v. cnnews.com, 61 U.S.P.Q.2d 1323, (E.D. Pa. 2001). 36. BroadBridge Media, L.L.C. v. Hypercd.com, 106 F. Supp. 2d 505, 511 (S.D.N.Y. 2000).

10 Vol. 93 TMR 1311 following the Harrods court s approach and those following that of the Southern District of New York and perhaps of the Porsche court is that a mark holder must demonstrate bad faith intent in the latter but not the former. 37 The possibility that the districts involved in multi-district litigation involving domain names would have differing stances on this issue raises substantive and strategic questions. Excluding the possibility that either the initial or subsequent district courts will decline to rule that dilution and infringement claims are permitted under the ACPA s in rem provisions, there still remain four potential scenarios: (1) all proceedings take place in districts that allow infringement and dilution; (2) all proceedings take place in districts that require bad faith for in rem proceedings under the ACPA; (3) the initial proceedings take place in a district that allows infringement and dilution, but subsequent proceedings take place in a district that limits ACPA in rem actions to cases involving bad faith; and (4) the initial proceedings take place in a district that only allows causes of action based on the ACPA s bad faith provisions, and where subsequent proceedings take place in a district or districts that permit actions for infringement and dilution. The issues for which, and degree to which, collateral estoppel may be available to mark holders will vary depending upon which of these scenarios mark holders find themselves contemplating. In the scenario wherein both the initial and subsequent proceedings take place in districts that allow infringement and dilution claims, bad faith may very well be irrelevant. Until the Supreme Court holds otherwise, a mark holder would need only prove a claim of infringement in both districts to prevail. Infringement claims are distinct from ACPA claims only in two ways the bad faith requirement and a potentially meaningless semantic distinction, namely the burden of proving confusing similarity as required by the ACPA versus likelihood of confusion, the standard for a claim of trademark infringement. If, as some case law suggests, this latter difference is without meaning, then an ACPA claim is merely an infringement claim with the additional requirement of proving bad faith on the part of the alleged cybersquatter. Under those circumstances, the mark holder would have little reason to pursue a finding of bad faith if the mark holder were to prevail on the other elements of the ACPA claim, it would also establish the elements necessary to prevail on the claim of infringement. 37. As noted above, the doctrinal and practical difference between likelihood of confusion (15 U.S.C. 1114(1)(a), 1125(a)) and confusingly similar (1125(d)(1)(A)) is far from clear, if it exists at all.

11 1312 Vol. 93 TMR Where a mere showing of infringement is sufficient for the mark holder to prevail in the initial proceedings, a determination of bad faith would not be a critical and necessary part of the decision in the initial proceeding, and thus collateral estoppel would not be an option in subsequent proceedings in a jurisdiction where infringement and dilution are not recognized as eligible claims under the ACPA. 38 This would apply not only to a scenario where all jurisdictions recognize infringement and dilution as valid grounds for cancellation and transfer under the ACPA s in rem provisions, but also to a scenario where the initial proceedings permit infringement and dilution claims, but the subsequent proceedings take place in districts that require a showing of bad faith. This is not to say that mark holders will or should be dissuaded from seeking to establish a finding of bad faith. A showing of willfulness may indirectly aid in the establishing likelihood of confusion. 39 Also, the mere possibility that either the initial or subsequent district court would treat likelihood of confusion and confusingly similar differently may provide sufficient motivation for a mark holder to argue forcefully that the domain names in question were registered in bad faith. 40 A mark holder facing subsequent in rem proceedings in a district where a showing of bad faith would be necessary could conceivably try to structure its arguments and strategy so that a finding in its favor would depend upon a finding of bad faith. 41 There is much less to say about the two scenarios where a mark holder would need to prove bad faith domain name registration in order to prevail in the initial proceedings. If the mark holder were successful, the analysis set forth in Section III, supra, would hold, and collateral estoppel would be an option. If a showing of bad faith registration were also necessary in the subsequent proceedings, collateral estoppel would also be very much worth pursuing. If, on the other hand, a showing of bad faith registration would not be necessary in subsequent proceedings, whether collateral estoppel would be an especially useful strategy would depend on strategic and tactical factors, as well as whether 38. Sedlack v. Braswell Servs. Group, Inc., 134 F.3d 219, 224 (4th Cir. 1998). 39. See, e.g., Al-Site Corp. v. VSI Int l, Inc., 174 F.3d 1308, 1327 (Fed. Cir. 1999) (defendant s intent a factor to consider when determining likelihood of confusion). 40. If the initial and subsequent courts consider this semantic difference to be relevant, then bad faith may very well be necessary to the decision of the first, and collateral estoppel would thus be both available and useful to the mark holder. 41. Of course, such a gambit would have its risks, i.e. a decreased likelihood of prevailing in the initial proceedings, and would possibly require some artful pleading to demonstrate how likelihood of confusion is indeed a different standard than confusingly similar.

12 Vol. 93 TMR 1313 likelihood of confusion and similarly confusing trigger different standards. V. CONCLUSION The ACPA s in rem provisions represent the application of old legal theory to new facts. Not surprisingly, the fit is less than perfect, and ambiguities and anomalies have resulted. Unless and until Congress resolves the questions presented above, courts and practitioners alike will have to sort out the tension inherent in the ACPA s treatment of domain names mere strings of characters as parties to lawsuits.