Virginia Lawyers Weekly VA Lawyers Weekly
Even though a cybersecurity company stopped selling goods online using an unregistered mark years before a competitor registered a similar mark, its continued use of the mark online subjected it to liability for trademark infringement.
Judge Claude M. Hilton of the Eastern District of Virginia rejected the defendant’s argument that it couldn’t be held liable for infringement if its use of the mark didn’t result in actual sales.
“[T]he plaintiff need only show that consumers are likely to be confused as to whether the defendant offers the same goods or services as the plaintiff. … Defendant has not offered any evidence to rebut the presumption of a likelihood of consumer confusion,” the judge wrote.
Hilton also rejected the defendant’s priority, laches, and acquiescence defenses.
However, he found that the defendant wasn’t liable for his overseas use of the mark, and that the evidence didn’t support a finding of willful infringement or false registration of a domain.
The opinion is GoSecure Inc. v. Bhandari (VLW 022-3-483).
Contested domain
Billy Bhandari registered the domain name <gosecure.com> in September 1999 and used it in 2002 to establish a website providing cybersecurity products and services.
In 2009, he created a cybersecurity blog at gosecure.wordpress.com, and a Twitter account with the handle @goSecure that linked to the website.
Although Bhandari stopped website sales and Twitter posts after 2011, his blog remained an active source of information regarding his company’s cybersecurity activities.
Bhandari later registered other companies in Delaware and the United Arab Emirates that used the mark in connection with the domain name.
While Bhandari used the domain name for email purposes until 2021, it didn’t appear that he used it to sell goods or services.
In 2004, a cybersecurity company named GoSecure was registered in Delaware. The company unsuccessfully tried to purchase the <gosecure.com> domain from Bhandari in 2003 and 2007.
GoSecure applied to register the trademark GOSECURE for cybersecurity goods and services in 2014. Having secured the trademark in 2016, GoSecure again tried to buy the domain name, but Bhandari refused to sell.
The parties engaged in arbitration in 2021, where GoSecure argued that it should be granted domain rights because it registered a mark identical to the one that Bhandari abandoned when his website ceased being active.
But the arbitration panel rejected that argument after Bhandari showed his recent use of the domain for his email, Twitter, blog and foreign ventures.
The panel even accused GoSecure of “reverse domain name hijacking, where a party uses the [arbitration] process in bad faith to force a registered domain holder to give up a domain name.”
According to the record, GoSecure first became aware of Bhandari’s other uses of the mark outside of the website during arbitration, when Bhandari introduced them as evidence.
In November 2021, GoSecure sued Bhandari for trademark infringement. Bhandari countersued for malicious prosecution based on the arbitration action.
Both parties moved for summary judgment.
Likelihood of confusion
Hilton explained that a Lanham Act trademark infringement claim requires a plaintiff to demonstrate that it owns a valid and protectable mark and that the defendant’s use of a similar mark creates a likelihood of confusion.
“A court may presume the existence of a likelihood of confusion under certain circumstances, including when there is no dispute that the defendant has used an identical mark in connection with similar goods or services offered by the plaintiff,” the judge wrote.
Here, “it is undisputed that Defendant used an identical mark to GOSECURE in several contexts, [and] that at one point in time, his website sold cybersecurity goods and services, the same market covered by plaintiff’s trademark registration.”
Hilton also noted that Bhandari’s blog and Twitter profile linked to his website and offered information about cybersecurity developments, services, and goods after GoSecure obtained trademark rights in 2016.
“Therefore, the Court finds that web users encountering defendant’s website, blog, or Twitter profile would be confused as to their affiliation with Plaintiff’s products, which is sufficient to demonstrate a likelihood of confusion,” he said.
The judge was not persuaded by Bhandari’s argument that he stopped selling goods on his website years before GoSecure registered the trademark.
“[A] defendant can still be held liable for trademark infringement even if the defendant’s use of the mark does not result in actual sales, so long as the use would cause a likelihood of confusion in connection with the plaintiff’s sale of such goods,” Hilton wrote.
The judge said that Bhandari’s liability stemmed “from a combination of his website’s history of cybersecurity sales coupled with the fact that his website, affiliated blog, and affiliated Twitter account, all remained accessible with the same content post-registration.”
Hilton found insufficient evidence that Bhandari used the mark in emails for commerce or for website operation, or that his overseas ventures were covered by the Lanham Act.
Further, the judge held the evidence didn’t prove that Bhandari had willfully infringed, crediting the assertion that he stopped selling goods or updating his blog and Twitter page in 2011.
Having found that Bhandari was liable for trademark infringement, the judge permanently enjoined him from any further use of the mark.
Finally, the judge dismissed Bhandari’s malicious prosecution counterclaim. GoSecure’s arbitration action wasn’t objectively baseless.
A ‘common mistake’
Lucy Wheatley, a partner at McGuireWoods, litigates high stakes intellectual property cases for some of the world’s top companies. She thought the defendant here made a common mistake.
“The standard for establishing use of a trademark is not the same as the standard for infringement, and infringing conduct may not be enough to establish trademark rights,” she said, adding that she was “impressed that the court understood that distinction.”
Wheatley noted “it’s not uncommon that you will get one ruling in arbitration and the federal court goes the opposite direction. They’re different animals, arbitration is unbinding and a lot less robust.”
Describing it as a “hot issue,” Wheatley pointed out that the U.S. Supreme Court just granted certiorari on a case — Abitron Austri GmbH v. Hetronic International — about the overseas reach of the Lanham Act.
“Trademark law is tricky because there are a lot of cross-border issues and it’s challenging to define impact on U.S. commerce in the age of the internet,” she told Virginia Lawyers Weekly. “I’m not surprised the judge didn’t want to wade into that here.”
