Smith v. Airbnb Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Alex Smith, No. CV-23-02541-PHX-SMM 10 Plaintiff, ORDER 11 v. 12 Airbnb Incorporated, 13 Defendant. [14] 15 Pending before the Court is Defendant’s Motion to Dismiss Plaintiff’s Second 16 Amended Complaint for Failure to State a Claim. (Doc. 25). For the following reasons, 17 the Court will grant the motion. Further, the Court will not grant leave to amend as it 18 finds the deficiencies to be uncurable. 19 I. BACKGROUND 20 Plaintiff, Alex Smith, runs a business promoting the listing of clients on leading 21 travel portals, including the platform of Defendant, Airbnb Incorporated. On July 8, 22 2021, Plaintiff registered with GoDaddy.com the domain <airbnbseo.com>, for the 23 business use described. Defendant is a community marketplace for people to list, 24 discover, and book accommodations around the world. Defendant has rights in 25 the AIRBNB mark through its registration with the United States Patent and Trademark 26 Office ("USPTO") See, e.g., AIRBNB, Registration No. 3,890,025 ); (Doc. 25) at exhibit 27 1. 28 The dispute between Plaintiff and Defendant begun on October 30, 2023, when 1 Defendant initiated a Uniform-Name Resolution Policy (UDRP) proceeding to recover 2 the domain <airbnbseo.com> from Plaintiff. The UDPR is a process, established by the 3 Internet Corporation for Assigned Names and Numbers (“ICANN”)1 for the resolution of 4 disputes regarding the registration of internet domain names. GoDaddy, the domain 5 register for <airbnbseo.com> has implemented the UDPR. Uniform Domain Name 6 Dispute Resolution Policy, GODADDY, https://www.godaddy.com/legal/agreements/ 7 domain-name-dispute-resolution-policy. 8 In accordance with the UDRP, the dispute was heard by FORUM, an alternative 9 dispute resolution body that has been administering domain name disputes since 1999. At 10 the Forum hearing, the assigned panelist found that the disputed domain name is 11 confusingly similar to Plaintiff’s mark, Defendant established prior rights in the 12 distinctive AIRBNB mark, Plaintiff has no rights or legitimate interests in respect of the 13 domain name, and that Plaintiff registered and used the domain name in bad faith. The 14 panelist ordered GoDaddy to transfer the domain name from Plaintiff to Defendant. Ho15 Hyun Nahm, Decision, Airbnb, Inc. v. Alex Smith, ADR FORUM, https://www.adr 16 forum.com/DomainDecisions/2068708.htm. 17 Plaintiff then timely filed suit in this court to halt the ordered domain transfer. 18 Plaintiff has amended his Complaint twice. Specifically, Plaintiff brings a claim of action 19 under Arizona state law for unjust enrichment, several claims asserting a declaration that 20 his registration of the domain does not violate the Anti-Cybersquatting and Consumer 21 Protection Act (“ACPA”) or otherwise infringe upon Airbnb’s rights, and requests 22 temporary and permanent injunctive relief stopping the domain transfer. Plaintiff also 23 raises First Amendment and doctrine of laches concerns in the Complaint. However, such 24 concerns seem to largely be copied and pasted into the Complaint without integration into 25 his causes of action. 26 1 ICANN is a nonprofit organization responsible for coordinating the maintenance and procedures of several databases related to the namespaces and numerical spaces of the 27 Internet. Bylaws for Internet Corporation for Assigned Names and Numbers, a California Nonprofit Public Benefit Corporation, ICANN, https://www.icann.org/en/governance/ 28 documents/bylaws-for-internet-corporation-for-assigned-names-and-numbers-acalifornia-nonprofit-public-benefit-corporation-icann-17-11-2023-en. 1 II. LEGAL STANDARD 2 A pleading must contain “a short and plain statement of the claim showing that the 3 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The pleading must “put defendants 4 fairly on notice of the claims against them.” McKeever v. Block, 932 F.2d 795, 798 (9th 5 Cir. 1991). While Rule 8 does not demand detailed factual allegations, “a complaint must 6 contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is 7 plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 8 Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the 9 plaintiff pleads factual content that allows the court to draw the reasonable inference that 10 the defendant is liable for the misconduct alleged.” Id. “Threadbare recitals of the 11 elements of a cause action, supported by mere conclusory statements, do not suffice.” Id. 12 Motions to dismiss under Federal Rule of Civil Procedure 12(b)(6) “can be based 13 on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a 14 cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 15 1990). In evaluating a motion to dismiss, a court will “accept the factual allegations of 16 the complaint as true and construe them in the light most favorable to the plaintiff.” AE 17 ex rel. Hernandez v. Cnty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012). 18 III. ANALYSIS 19 A. ACPA Claims 20 Plaintiff’s claims in counts two, five, and six can be boiled down to a claim for 21 relief from the allegedly incorrect decision of the UDPR panel that ordered the transfer of 22 the domain name to Defendant. The claims are asserted under the Anticybersquatting 23 Consumer Protection Act (“ACPA”). Pub. L. No. 106-113, §§ 3001-10, 113 Stat. 1501 24 (1999). The ACPA amended the Lanham Act, 15 U.S.C. § 1051 et seq., which “protects 25 the use of trademarks in interstate and foreign commerce.” Shenzhen Big Mouth Techs. 26 Co. v. Factory Direct Wholesale, LLC, No. 21-CV-09545-RS, 2022 WL 1016666 , at *3 27 (N.D. Cal. 2022). The ACPA is codified in scattered sections of Title 15 of the United 28 States Code, including 15 U.S.C. §§ 1114 (2)(D) and 1125(d). See Mira Holdings, Inc. v. 1 Regents of Univ. of Cal., No. 618CV190ORL37GJK, 2018 WL 8244597 , at *3 n.1 (M.D. 2 Fla. 2018 ). 3 A primary purpose of the ACPA is “to provide clarity in the law for trademark 4 owners by prohibiting the bad-faith and abusive registration of distinctive marks as 5 Internet domain names with the intent to profit from the goodwill associated with such 6 marks – a practice commonly referred to as ‘cybersquatting.’” S. Rep. No. 106-140, at 4 7 (1999). To balance the rights given to trademark owners against cybersquatters, the 8 ACPA also provides some protection to domain name registrants against “overreaching 9 trademark owners.” Id. at 11 ; see 15 U.S.C. §§ 1114 (2)(D)(iv)-(v). 10 One such protection is the “reverse domain name hijacking provision” of the 11 ACPA, found in 15 U.S.C. § 1114 (2)(D)(v).2 See Strong Coll. Students Moving Inc. v. 12 Coll. Hunks Hauling Junk Franchising LLC, No. CV-12-01156-PHX-DJH, 2015 WL 13 12602438, at * 6 (D. Ariz. May 15, 2015). This statute provides that: A domain name registrant whose domain name has been suspended, [14] disabled, or transferred under a policy described under clause (ii)(II) may, 15 upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful [16] under this chapter. The court may grant injunctive relief to the domain 17 name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant. [18] 15 U.S.C. § 1142 (D)(v). Therefore, the Court is asked to determine whether Plaintiff has [19] plausibly plead that the use of the disputed domain name did not violate the ACPA. To [20] show that his conduct is not unlawful under § 1125(d)(1), Plaintiff must “prove either (1) [21] they did not register, traffic, or use a domain name that is identical or confusingly similar [22] to a distinctive mark, or (2) they did not have a bad faith intent to profit from that mark.” [23] 2 As the Fourth Circuit stated in Barcelona.com, Inc. v. Excelentisimo Ayuntamiento De 24 Barcelona, 330 F.3d 617 , 625 n. 1 (4th Cir. 2003): 25 If a domain-name registrant cybersquats in violation of the ACPA, he “hijacks” the domain name from a trademark owner who ordinarily would 26 be expected to have the right to use the domain name involving his trademark. But when a trademark owner overreaches in exercising rights 27 under the ACPA, he “reverse hijacks” the domain name from the domainname registrant. Thus, § 1114(2)(D)(v), enacted to protect domain-name 28 registrants against overreaching trademark owners, may be referred to as the “reverse domain name hijacking” provision. 1 Strong Coll. Students Moving, 2015 WL 12602438 , at *8 (citing § 1125(d)(1)(A)(i)-(ii)); 2 see also Mira Holdings, 2018 WL 8244597 , at *3 (“If the registrant ‘has a bad faith intent 3 to profit’ from an owner's mark and registers a domain name that ‘is identical or 4 confusingly similar’ to a mark distinctive at the time the registrant registered the domain 5 name, such is considered unlawful under the ACPA.”): GoPets Ltd. v. Hise, 657 F.3d 6 1024, 1030 (9th Cir. 2011) (“To prevail on its ACPA claim, [a party] must show (1) 7 registration of a domain name, (2) that was ‘identical or confusingly similar to’ a mark 8 that was distinctive at the time of registration, and (3) ‘bad faith intent’ at the time of 9 registration.”) (quoting § 1125(d)(1)); Lahoti v. VeriCheck, Inc., 586 F.3d 1190 , 119710 1202 (9th Cir. 2009) (noting that distinctiveness and bad faith are required to sustain an 11 ACPA claim). 12 First, the Court finds that Plaintiff has failed to plead a claim that plausibly alleges 13 that Plaintiff did not register, traffic, or use a domain name that is identical or confusingly 14 similar to a distinctive mark. As an initial matter, its undisputed that Plaintiff registered 15 the disputed domain name, as evident by Plaintiff’s own admissions. See (Doc. 17) at ¶ 6. 16 Additionally, Defendants’ mark is distinctive, as evidenced by its registration with the 17 USPTO. See 15 U.S.C. § 1115 (a) (stating that PTO registration is “prima facie evidence 18 of the validity of the registered mark”); see also, Lahoti, 586 F.3d at 1199 (stating that 19 registration alone may be sufficient to find a mark to be distinctive.). 20 As Defendant’s mark is distinctive, the question turns to whether the disputed 21 domain name is identical or confusingly similar to the mark. “In determining whether 22 there is confusing similarity under the ACPA, courts compare the [ ] mark with the name 23 of the website.” Super-Krete Int'l v. Sadleir, 712 F.Supp. 2d 1023, 1031 (C.D. Cal. 2010). 24 The Court finds that the question is answered in the affirmative, as the disputed domain 25 name, <airbnbseo.com> incorporates Defendant’s mark, AIRBNB. The fact that the 26 disputed domain name adds the acronym “SEO” to the end, which stands for “search 27 engine optimization,” does not change the fact that the disputed domain name is 28 confusingly similar to Defendant’s mark. Yuga Labs, Inc. v. Ripps, No. CV 22-43551 JFW(JEMX), 2023 WL 3316748 , at * 6 (C.D. Cal. 2023); See, e.g., Coca-Cola Co. v. 2 Purdy, 382 F.3d 774, 783 (8th Cir. 2004) (affirming district court's finding that domains 3 “mywashingtonpost.com,” “mymcdonalds.com,” and “drinkcoke.org” were confusingly 4 similar to the Washington Post, McDonald's, and Coke marks); see also, Haas 5 Automation v. Denny, 2013 WL 6502876 , at * 3 (C.D. Cal. 2013) (finding confusing 6 similarity where domain names all contained the plaintiff's mark ‘haas’ “plus some 7 additional term or terms,” such as haasplus.com, haasmillparts.com). 8 Next, the Court finds that Plaintiff has failed to plead a claim that plausibly alleges 9 that Plaintiff did not have a bad faith intent to profit from the use of Defendants’ mark. 10 Plaintiff advances several theories as to why his complaint adequately alleges a lack of 11 bad faith: nominative fair use, statutory fair use, the bad faith factors set forth in 15 12 U.S.C. § 1125 (d)(1)(B), and the ACPA’s safe harbor provision found in 15 U.S.C. § 13 1125(d)(1)(B)(ii). Each theory advanced by Plaintiff fails to plausibly allege a lack of bad 14 faith. 15 First, Plaintiff asserts that the nominative fair use defense protects his use of the 16 disputed domain name. This argument fails as a matter of law, as nominative fair use 17 “does not bear on whether the disputed domain names run afoul of the ACPA.” Haas 18 Automation, Inc, 2013 WL 6502876 at *6. 19 Second, Plaintiff asserts that statutory fair use prevents a finding of bad faith under [20] 15 U.S.C. § 1115 (b)(4). This defense against a finding of bad faith is available when “the 21 use of the name, term, or device charged to be an infringement is a use, otherwise than as 22 a mark ... of a term or device which is descriptive of and used fairly and in good faith 23 only to describe the goods.” 15 U.S.C. § 1115 (b)(4). This defense fails on its face, as 24 Plaintiff asserts a property right in the disputed domain name. See, e.g., (Doc. 17) at ¶ 28, 25 31, 33, and 73. 26 Next, Plaintiff argues that the ACPA bad faith factors do not indicate a lack of bad 27 faith. Under this analysis, courts consider nine nonexclusive factors in determining 28 whether bad faith intent to profit exists. 15 U.S.C. § 1125 (d)(1)(B)(i)-(ix). “Courts need 1 not march through the nine factors seriatim because their use is merely permissive and 2 the most important grounds for finding bad faith are the unique circumstances of the 3 case.” IFIXITUSA LLC v. iFixit Corp., No. CV-21-00887-PHX-DGC, 2022 WL 4 2117845, at * 4 (D. Ariz. 2022) (quotations omitted). The factors are as follows: 1) whether the registrant owns any independent trademark or other [5] intellectual property rights in the domain name; 2) whether the domain 6 name comprises the registrant’s legal name or a name commonly associated with that person; 3) whether the registrant used the domain name to offer [7] bona fide goods or services; 4) whether the registrant made bona fide 8 noncommercial or fair use of the mark on the website to which the domain name resolves; 5) whether the registrant intended to divert customers from [9] the mark owner’s website for commercial gain or with the intent to dilute 10 the mark or create a likelihood of confusion; 6) the registrant’s offer to transfer, sell, or otherwise assign the domain name for financial gain; 7) the [11] registrant’s use of material and misleading false contact information for the 12 domain name; 8) the registrant’s registration or acquisition of multiple infringing domain names; and 9) whether the mark incorporated in the 13 domain name is distinctive or famous. 14 See 15 U.S.C. §1125 (d)(1)(B). Using these factors, the Court finds that Plaintiff’s own statements in his Second [15] Amended Complaint show bad faith by Plaintiff. First, Plaintiff does not at any point [16] plausibly allege that he owns an intellectual property interest in the domain name, past [17] the conclusory statement that he “has legal right to use” the domain name. (Doc. 17) at ¶ [18] 54. The Court disregards such conclusory statements in ruling on a motion to dismiss. [19] Further, Plaintiff states that while his company served the broader travel industry, he [20] specifically leveraged Defendant’s brand to “communicate[ ] the nature of his service in [21] an industry where online visibility is paramount.” (Doc. 17) at ¶ 30. This further shows [22] Plaintiff’s own admission as to the distinctiveness and fame of Defendant’s mark and his [23] attempt to use such distinctiveness and fame for his own commercial purposes. Finally, [24] Courts have consistently found an intent to divert for commercial gain when a party [25] registers a domain name with a minor variation to an existing trademark. See GoPets v. [26] Hise, 657 F.3d 1024, 1033 (9th Cir. 2011) (finding that “it is clear that [domain [27] registrant] intended the Additional Domains [including , and among others] ‘to divert [28] 1 consumers from the mark owner’s online location to a site accessible under [these] 2 domain name[s] ... by creating a likelihood of confusion.’”); See also, Super-Krete Int’lr, [3] 712 F. Supp. 2d at 1033 (finding bad faith where “Defendants only interest in the domain 4 name [ ] is to divert customers who may have been searching for Plaintiff’s mark to their 5 own commercial website”). Based on Plaintiff’s own omissions, the Court finds that 6 Plaintiff has failed to plausibly allege a lack of bad faith based on the enumerated ACPA 7 bad faith factors. 8 Finally, Plaintiff argues that the ACPA safe harbor provision, codified at 15 9 U.S.C. § 1125 (d)(1)(B)(ii), prevents a finding of bad faith. The safe harbor provisions 10 provides that even when the previously stated factors show bad faith, bad faith will not be 11 found when “the court determines that the person believed and had reasonable grounds to 12 believe that the use of the domain name was a fair use or otherwise lawful.” 15 U.S.C. § 13 1125(d)(1)(B)(ii). 14 The Court does not find the safe harbor to plausibly protect Plaintiff. The safe 15 harbor “protects uses such as parody and comment[ ] and use by persons ignorant of 16 another's superior right to the mark.” DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213 , 1220 17 (9th Cir. 2010). Neither are implicated in this case, as the Plaintiff has not plead a use of 18 the domain for parody or comment purposes, nor could Plaintiff plausibly allege that he 19 was ignorant of Defendant’s superior right to the mark. Plaintiff, by his own admission, 20 used Defendant’s mark to associate with the industry of which Defendant is apart, 21 thereby recognizing the superior right of Defendant. Also to note, courts are instructed to 22 make sparing use of the safe harbor in negating a party’s bad faith. Lahoti, 586 F.3d at 23 1202. The Court does not find such rare circumstances to be present in this case. 24 Therefore, as the Court finds that Plaintiff has failed to plausibly allege that his 25 use of the disputed domain name did not violate the ACPA, the Court will grant the 26 motion to dismiss with respect to the counts centering on the ACPA. The Court will not 27 grant leave to amend, as it does not find the “pleading could not possibly be cured by the 28 allegation of other facts.’” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (citations 1 omitted). 2 B. Unjust Enrichment Claim 3 Defendant asserts that Plaintiff’s claim alleging unjust enrichment must be 4 dismissed. “Unjust enrichment occurs when one party has and retains money or benefits 5 that in justice and equity belong to another.” Trustmark Ins. Co. v. Bank One, Arizona, 6 NA, 48 P.3d 485, 491 (Ariz. Ct. App. 2002), as corrected (2002) (citing City of Sierra 7 Vista v. Cochise Enter., Inc., 697 P.2d 1125, 1131 (Ariz. Ct. App. 1984)). To state a 8 claim for unjust enrichment, a Plaintiff must plead (1) an enrichment; (2) an 9 impoverishment; (3) a connection between the enrichment and the impoverishment; (4) 10 the absence of justification for the enrichment and the impoverishment; (5) the absence of 11 a legal remedy. Id. 12 Defendant asserts that Plaintiff has not plausibly plead that Defendant has received 13 any unjustified benefit at Plaintiff’s expense. First, the Defendant argues that the domain 14 transfer will not occur until the conclusion of the suit, therefore there has been no benefit 15 to Defendant. Secondly, the transfer would be in accordance with the UDPR which is, by 16 its definition, justified. Plaintiff asserts that the benefit conferred would be the cost 17 incurred by Plaintiff to register the domain name. Further, Plaintiff argues that an unjust 18 enrichment claim does not require a wrongdoing by the Defendant. 19 The Court finds that Plaintiff has not plausibly plead a claim for unjust 20 enrichment. As the Court finds above, the Plaintiff has not plead a claim that plausibly 21 asserts that the transfer of the domain is not justified under the law. Since a claim for 22 unjust enrichment requires a showing that there is an “absence of justification for the 23 enrichment,” Plaintiff does not state a claim upon which relief may be granted. The 24 Court will grant the motion to dismiss as to the unjust enrichment claim. The Court 25 further does not grant leave to amend, as the count is barred by law. 26 C. Remaining Claims 27 The Court finds that Plaintiff’s remaining causes of action do not state cognizable 28 claims. The claims for temporary injunctive relief and permanent injunctive relief appear 1 || to be brought incorrectly as independent claims of action, rather than the relief Plaintiff 2 || requests this Court to grant. 3 Plaintiff additionally includes in his Complaint statements of law discussing the 4|| First Amendment and the equitable doctrine of laches. The Court does not find such legal 5 || contentions to have been properly plead to connect to a theory of recovery for Plaintiff, 6 || and even if they had been, the Court does not find that the Plaintiff has plausibly alleged a violation of his First Amendment rights, or applicability of the doctrine of laches. 8 D. Conclusion 9 For the preceding reasons, the Court grants Defendant’s Motion to Dismiss. The 10 || Court will not grant leave to amend, as the Court finds that the claims are either barred by 11 || law or are uncurable by further amendments. 12 Accordingly, 13 IT IS ORDERED granting Defendant’s Motion to Dismiss. (Doc. 25) 14 IT IS FURTHER ORDERED dismissing Plaintiffs Second Amended 15 || Complaint, with prejudice. (Doc. 17). 16 IT IS FURTHER ORDERED directing the Clerk of the Court to terminate this 17 || action. 18 Dated this 18th day of December, 2024. [19] 20 Lgl ia one 21 Stephen M. McNamee 9 Senior United States District Judge [28] -10-