Tuesday, November 10, 2009

Cybersquatting or Domain Name Hijacking? You be the judge.

New York-New York Hotel & Casino

On November 6, 2009, New York-New York Hotel & Casino, LLC (“NY-NY”), the company which owns the New York New York Hotel & Casino in Las Vegsa, brought a lawsuit in Nevada District Court against California resident Ronnie Katzin, the owner of the domain name newyorknewyork.com. See New York-New York Hotel & Casino, LLC v. Katzin et al, Case No. 09-cv-02139 (D. Nev.) The Las Vegas Sun reported on the lawsuit here and a copy of the complaint can be downloaded here.

Interestingly, NY-NY appears to acknowledge that Katzin registered the domain name around December 7, 1995, and has been in control of the domain name since it was registered in December 1995.

NY-NY appears to be basing its claim for cybersquatting on the fact that its predecessor in interest, MGM Grand, Inc, announced the hotel-casino in 1994, and then on September 13, 1995 (three months prior to the date Katzin registered the domain), NY-NY filed two trademark applications for NEW YORK NEW YORK (one for hotel services and one for casino services), which registered in September 1998. NY-NY claims that Katzin registered the domain name after learning of NY-NY’s plan to build the New York-New York Hotel & Casino. [Comment: Really? You don’t supposed it had anything to do with the fact that maybe “New York New York” is probably the most common way in which to identify New York City, New York and that the domain name might be a valuable domain name for offering marketing and promotional services for New York City businesses? ]

In February 2006, NY-NY had its attorney send a letter complaining about how the newyorknewyork.com website contained links which enabled visitors to book hotel reservations for both New York-New York Hotel & Casino and other Las Vegas hotels. After receiving the letter, Katzin stopped hosting a website which offered hotel bookings at the New York-New York Hotel & Casino.

However, according to the complaint, NY-NY recently discovered a large rectangle banner that appeared in the upper right part of the newyorknewyork.com website which featured a picture of the New York-New York Hotel & Casino and which, according to the complaint, when clicked on would lead the visitor to a different website (not NY-NY’s website) which allowed visitors to book a hotel room at the New York-New York Hotel & Casino (and very likely compensated Katzin for some amount per clicks). [Note: as of November 9th, the banner was still up, but as of November 10th, the banner no longer appeared and the rectangle was simply black.]

So what do you think? In order for a domain name registration to constitute cybersquatting, the person must register, traffic in, or use a domain name that is identical or confusingly similar to a mark that is distinctive at the time of registration of the domain name. Is Katzin a cybersquatter who registered this domain name in order to take advantage of NY-NY’s “distinctive” trademark rights at the time of registration or is NY-NY using this banner ad as a thin basis to now hijack this valuable domain name for its own use?

Does it make a difference knowing that both of NY-NY’s trademark registrations for NEW YORK NEW YORK were based on a claim of Section 2(f) acquired distinctiveness, which is pretty much an acknowledgement that the marks were not inherently distinctive and could not have been distinctive until such time as they were used in commerce, which NY-NY acknowledges was not until at least January 3, 1997?

11/11/09 Update:
Las Vegas Sun reporter Steve Green has a follow-up article on the lawsuit here after speaking directly with Katzin and getting his side of the story.

According to Katzin, he registered the domain name as part of a plan to create a site promoting New York City – the domain name is a reference to the song “New York New York” famously sung by Frank Sinatra (but originally performed by Liza Minnelli in the Martin Scorsese film of the same name).

Katzin also clarifies part of the allegations set forth in NY-NY’s complaint. Specifically, the complaint alleged that a company, True Magic, LLC, held onto the domain name and put up PPC advertising which were taken down after NY-NY’s counsel sent a letter. While the complaint never comes right out and states directly that Katzin and True Magic were one and the same, the insinuation is there based on subsequent allegations that Katzin controlled the website since 1995. According to Katzin, however, True Magic hijacked the name from him around 2004 and used it until 2006 when he was able to get it back.

As for the image of the New York-New York hotel-casino on his current website, Katzin explained that the image linked to a room-booking website operated by Expedia's Interactive Affiliate Network, which has a deal to sell MGM Mirage rooms (NY-NY is part of MGM Mirage). Katzin also indicates that an MGM Mirage official, who he did not identify, told him that such link would be authorized once Interactive Affiliate Network started booking rooms for MGM Mirage.

So does this change anybody’s mind about whether this is a real case of cybersquatting or an example of a “Goliath” company seizing an on opportunity to hijack a domain name from an innocent domain name owner?


Anonymous said...

Looks like trademark infringement to me. Had he used newyorknewyork.com to refer traffic to New York businesses, that would be one thing.

They aren't going to be able to necessarily tap him on bad faith registration, but they have him by the scrotum on bad faith use.

Marta Randall said...

I have to disagree. The website may offer travel bookings to other places, but its apparent emphasis is booking NY hotels, NY restaurants, helicopter tours of the Statue of Liberty, tix to Broadway shows -- on the face of it, I don't see evidence of bad faith.

Anonymous said...

Defendant's more recent activities, particularly his use of a picture of NY-NY's hotel to link to another commercial site, will doom him. I recall a number of UDRP decisions in which the panel found that encroachment by a registrant who first registered the domain name in good faith can constitute bad faith.
-Bobby Ghajar

chandan said...

this really sucks :(

hope they will sued badly for reverse domain hijacking