Monday, December 26, 2011

Number one fan, number two infringement?

Fancaster, Inc. v. Comcast Corp., --- F. Supp. 2d ----, 2011 WL 6426292 (D.N.J.)
Via Eric Goldman.  Sit back, this is going to take a while.
The parties both offer online video content.  In 1989, Fancaster’s president and director, Craig Krueger, received a registration for Fancaster (design mark) for "broadcasting services."
registered Fancaster mark
In 1994, Krueger filed a Combined Affidavit of Use and Incontestability.  As evidence of use, he submitted blank letterhead and envelopes bearing the FANCASTER mark.  He used the mark in connection with a number of activities, including selling Fancaster branded radios, charging customers to watch closed-circuit boxing matches, producing karaoke shows, transmitting sponsored news messages to wireless pagers and cell phones, and conducting live demonstrations of FANCASTER broadcast services. In July 2006, Fancaster launched fancaster.com, which uses the current logo, which uses lowercase lettering instead of the uppercase in the registration, and includes the tagline “welcome to planet fancaster!”:
Fancaster mark as it appears on site
“Fancaster.com offers a wide variety of short video clips, most of which feature sports-related content and a sports fan or athlete speaking into a microphone displaying the fancaster mark to discuss a particular sporting event, sports team, or sports fans in general.”  Krueger testified that a unifying theme is broadcasting: "[e]veryone is speaking into a microphone and being recorded."  Fancaster’s 2009 business plan says that the company “intends to develop a 21st century communications portal where user-generated video content is created by the fans and for the fans who want to emulate broadcasters or submit commentary on management, coaches, players, or teams” and "intends to produce content that traditional media ignore, such as videos of fans at unique events such as La Tomatina in Spain, Ostrich racing in Arizona, the Westminster Kennel Club Dog Show and the annual Nathan's Hot Dog Eating Contest."  The business plan anticipated targeting sports fans initially, but eventually including music and movie fans.  It identified both fan sites and large UGC/social networking sites such as YouTube and Facebook as competitors.
Krueger marketed fancaster.com online on a few sports-oriented websites and those of several local pubs but testified that most of Fancaster's marketing efforts had not been geared toward the Internet, but rather had taken place at sporting events, bars, on local television channels in Sioux Falls, South Dakota and Sioux City, Iowa, on radio stations in Charleston, South Carolina, and via flyers and handbills.
In 2003, Comcast launched a multimedia player on its website to allow users to watch cable TV online.  The player was called “The Fan” because it displayed video in a circular pattern resembling a fan.  It applied to register TheFan as a mark, but the application was rejected for likely confusion with a registered mark THE FAN for radio broadcasting services.  In 2004, Comcast requested reconsideration, listing a number of marks registered for related services that used (THE) FAN; on the list was FANCASTER.  (The application was ultimately abandoned.)
Comcast later sought to develop a standalone version of the player and hired a branding agency to research and test possible names.  The marching orders were that (1) "[t]he name should help communicate that Website X is the ultimate interactive destination for TV and Movie fans," and (2) "the name should somehow tie back to Comcast, [but] the name Comcast should not be used."  The agency generated 23 names.  Comcast also hired another agency to find names and indicated that its primary target was consumers who use “portal-centric authority sites” such as MSN, Amazon, and Netflix, and its secondary target was consumers who use sites such as YouTube, myspace, Jib Jab, and del.icio.us. This agency proposed FanCast.com and five other names.  Fancast.com performed best in consumer research.  Plus, the Comcast team thought that Fancast was a logical merger of The Fan and Comcast.  So Comcast went with Fancast.
Comcast bought the domain name and applied to register FANCAST in August 2006.  A month later, Fancaster began registering large numbers of “fancast” domain names.  Fancaster also opposed the application, which was still pending.  Three prior applications by other people to register Fancast had been rejected, including one in 2003 for likely confusion with Fancaster.
In July 2006, Krueger met with Comcast employees to pitch his program Mobile Voter, and he also pitched Fancaster’s services and website, which he advised was about to be launched. Five days later, Krueger discovered that Fox SportsNet New England, a Comcast channel, had an amateur broadcasting segment called Fancaster.  Designed to encourage young people to pursue TV broadcasting careers, this Fancaster had young sports fans audition to appear on live television during professional sporting events; video was posted on the channel’s website.  Krueger first sent a cease and desist demand, but then decided not to sue but reserved the right to do so if the program changed.  Comcast then told Krueger that discussions of a potential business relationship were suspended "due to infringement issues surrounding Fancaster.com."
In January 2008, Comcast launched a fully operational fancast.com allowing users to watch full-length premium video, including broadcast TV and premium cable shows and movies.  The website offered some sports-related and movie content, but no user-generated content.  The visual mark was, according to Comcast, designed as an “expanding universe” “[t]o emphasize that FANCAST aggregated all forms of popular premium television and movie content.”
Fancast mark
Comcast marked Fancast nationally in print, on TV, and on the internet, targeting mainstream media consumers.  By late 2009, “Comcast had lost roughly $80 million on the FANCAST website, which relied entirely on advertising revenue.”  So it began to phase out Fancast, moving it to a website branded “FANCAST Xfinity TV” for Comcast cable subscribers.  In March 2011, fancast.com went down and Xfinity TV was offered exclusively to subscribers.  Fancast.com was redirected to Xfinitytv.com.
In June 2008, Fancaster sued Comcast for the things you’d expect, including cybersquatting, here for some reason denominated “cyberpiracy,” and Comcast counterclaimed for, among other things, cybersquatting and a finding of fraud on the PTO.
Fancaster submitted search engine results for "fancaster," "fancast," and other similar letter chunks, showing that the results included paid sponsored links to fancast.com and xfinitytv.fancast.com; organic links to Fox SportsNet’s Fancaster and www.fancast.com; and/or suggested search terms for "fancast," "fancaster comcast," "FanCaster Comcast," "fancast review," and "fancast xfinity tv," among others.
It also submitted screenshots to show that both fancast.com and fancaster.com featured sports-related content.  The fancast.com homepage featured a tab for sports videos, and the sports section stated “XFINITY-Home of the Most Live Sports.”  Fancast hosted short sports clips as well as full shows.  Search engine results for “fancast sports” etc. produced links to fancast.com.  Fancaster additionally submitted screenshots to show other content overlaps.
Other evidence: videos on YouTube featured the Fancast mark “either in the corner of the video, the title of the video, on the background wall of the set where the video was shot, and/or on the microphone being held by the interviewer.” But the videos were posted under a number of different YouTube usernames, so the court was uncertain whether these videos were posted on YouTube by Comcast or by individuals who culled them independently from fancast.com or another source without Comcast's permission.  (Cf. arguments in Viacom v. YouTube!)  Other YouTube videos featured the Fancaster mark and were posted by Fancaster's YouTube channel.
Fancaster has a Facebook page; Comcast’s Fancast Facebook page advertises Xfinity and directs visitors to xfinityTV.com.  Fancaster has a Twitter feed; Comcast’s Twitter feed “is a trivia site,” whatever that means.
Comcast submitted mall intercept survey evidence purporting to show little risk of (reverse) confusion.  The respondents were people who use or were likely to use the internet to view, post, or discuss sports-related content.
Comcast’s first survey first exposed respondents to Comcast’s mark before showing them Fancaster’s mark as well as others.  Each respondent in the test group saw a three-page printout of fancast.com.  The printout was removed.  Respondents were then shown and questioned about fancaster.com, veoh.com, musicvideocast.com, and tvfanonline.com.  These were shown as static screenshots on a computer.  The last two were specifically included because they were “examples of the many websites that contain superficial name elements in common with [f]ancaster ('fan' and 'cast' respectively) but do not come close to being confusingly similar.”
Test group respondents were asked whether they believed the given website and the printout were from the same company, different companies, or whether they had no opinion.  If they responded “same,” they were asked what made them think so.  If they didn’t answer “same,” they were then asked whether the company the current website is from is affiliated with or received authorization from the company the printed-out website is from, and if they said yes were asked what made them think so.  The same thing happened with the control group, except they saw a website called Fanwatch with the same content, format, and overall image.
In the test group, 31.1% of respondents connected Fancast and Fancaster (responding either that they were from the same company or that Fancaster was affiliated with/authorized by Fancast), 10% of whom said it was because of the similarity of the names.  In the control group, 29% connected Fancaster and Fanwatch, 8.6% of whom said it was because of the similarity of the names.  Net confusion: 2.1%.  The survey expert, Hal Poret, also concluded that the rate at which test group members connected Fancast and Fancaster was “statistically equivalent to the rate at which they connected Fancast to Musicvideocast (27.3%), Tvfanonline.com (33.0%), and Veoh (22.0%).”  He concluded that the confusion results didn’t rise above the level of typical survey noise.
Comcast’s second study, in 2011, exposed respondents to the Fancaster mark to determine whether it would mistakenly be connected to Fancast, on the theory that Fancast had been around long enough to give consumers ample opportunity to become aware of it.  Respondents were shown the current Fancaster website and allowed time to explore it.  The surveyors then asked them whether they had an opinion about what company the website they just saw was from; if they had an opinion, they were asked what company and why.  The survey then asked whether they thought the website company provided any other services or operated any other websites, and if so which and why.  Finally, they were asked whether they thought the website company was affiliated with or received authorization from any other company, and (if yes) what made them think so.  Of 209 respondents, 2 gave an answer indicating possible confusion.  By contrast, 25% said the website was from Fancaster.  Other responses: Youtube (22 respondents), Twitter (9), ESPN (8), NFL (7), Yahoo (5), Facebook (5), Google (3) and TMZ (2).
Fancaster’s damages expert submitted testimony that Comcast spent $83 million marketing Fancast, and $200 million more to promote Xfinity featuring the Fancast brand.  He opined that it would take one year of Comcast’s average annual ad expenditures to correct inaccurate marketplace beliefs, or over $73 million.  However, he based this on Comcast’s expenses, not on the existing goodwill of Fancaster.
The court initially evaluated Fancaster’s challenge to the surveys.  Fancaster challenged the survey universe because (1) only focused on sports fans, as opposed to sports, movie, and music fans, (2) ignored Fancaster's initial target of 18-35 year old males, and (3) improperly surveyed participants nationwide because Comcast offers its services only in certain markets.
Given that the claim here was one of reverse confusion, the proper universe was the junior user’s market.  The court found that it was appropriate to focus on sports fans for the first survey because at the time Fancaster was focused on sports-related content; Fancaster’s hopes to expand didn’t matter because the proper universe was Fancaster’s actual customer base at the time.  Likewise, even in spring 2011 when the second survey was conducted Fancaster maintained a sports focus; the vast majority of clips and categories were sports-related.  It was also fine to sample men and women; Krueger testified that Fancaster was "targeting [a] younger ... probably a little male-driven" audience "anywhere from 12 years old to 40 years old ... although we have a lot of women who love Fancaster."  A nationwide sample was also appropriate because Krueger claimed a nationwide customer base.
Fancaster also challenged the extrapolation of a non-probability mall intercept survey to the general population.  However, mall intercept studies have often been accepted as evidence; problems extrapolating them go to weight rather than admissibility.
More problematic was Fancaster’s argument that the first survey bore no resemblance to marketplace conditions.  A survey gains weight according to how closely it simulates how a consumer would encounter a trademark in the real world.  Here, Poret used a printout and static screenshots of the parties’ homepages instead of live vesions.  This distortion provided “ample grounds” to exclude the survey.  Video websites are meant to be viewed on a computer and to allow consumers to browse and interact with them; the survey was nothing like the actual market presentation.  Moreover, “the use of two different media to present the FANCAST and fancaster websites could improperly enhance the distinction between them.”
Comcast argued that the printout and screenshots provided a representative snapshot of the available content.  The court was unimpressed.  “While an image of a website's homepage may accurately summarize the nature of its content and services, it cannot meaningfully test for confusion if it is not presented in the way that an Internet user would actually encounter it.”
As for the second survey, Fancaster argued that the format was inappropriate because there was no evidence that respondents had been exposed to the Fancast mark.  Comcast responded that there was ample evidence that FANCAST mark had saturated the marketplace, and that any lack of awareness of the mark merely cut the reverse confusion claim.  McCarthy takes the position that a survey can’t work in a reverse confusion case until the junior user saturates the market with its mark because, until then, consumers haven’t been exposed to the relatively large promotional efforts of the junior user.  The record reflected a substantial nationwide ad campaign for Fancast across multiple media.  Krueger stated that he believed Fancast.com to be "one of the top websites in the world" based on several "measurement sites that are publicly available on the internet and track the top web sites in the world," and that Comcast had "done a pretty good job of saturating the market."  (Sometimes, both parties have incentives to maintain that the world is a particular way.)
Fancaster argued that many survey respondents still had no exposure to Fancast because they were outside Comcast’s territory.  But Fancast.com was available to anyone with an internet connection, and Comcast was marketing it to consumers in and outside of its footprint.  Even when it offered content to Comcast cable subscribers, there was no evidence that it altered its marketing strategy before the website was dismantled.  The second survey was admitted.
The court also excluded some portions of Comcast’s expert testimony about trademark registration and cybersquatting (Greg Lastowka was the expert there—hi Greg!) for reaching legal conclusions.  While some technical background about the registration process etc. could aid the jury, whether Fancaster’s uses counted as “use in commerce” of the Fancaster mark for the applied-for services (broadcasting) was for the court/the factfinder, as was whether Fancaster’s specimens were acceptable.  Likewise, technical issues of internet functions and cybersquatting were appropriate subjects of expert testimony, but Lastowka’s opinion that Fancaster “registered multiple domain names with a bad faith intent to profit in violation of the ACPA” was not appropriate expert testimony.  “A jury should not be receiving instructions on the law from two sources, and however erudite and accurate they may be, Mr. Lastowka's instructions will not be allowed to compete with the Court's instructions.”
The court then turned to the core trademark infringement claim.  In a reverse confusion case, intent, actual confusion, and the strength of the marks are analyzed differently than they are for forward confusion, but the factors are otherwise the same.  The court found that each factor weighed in Comcast’s favor and granted summary judgment for want of likely confusion.
Degree of similarity: The court found the appearance, sound, and meaning of the marks to be sufficiently distinct to present minimal risk of confusion.  On its website, Fancast appeared in all black capital letters next to a pastel "expanding universe design."  On its website, Fancast appeared in lowercase light-blue lettering and incorporated a pair of headphones turned on their side.  This use of a design as part of the mark minimized the likelihood of confusion, as did “welcome to planet fancaster!” and the different fonts.  There was no evidence that consumers put more emphasis on the verbal components of the marks than their design or meaning and the court therefore saw no reason to weigh them more heavily.  (Could no reasonable jury have decided otherwise?)
The sound of the marks weighed “less heavily” in Comcast’s favor, though the sounds were “somewhat distinct.”  And confusion was minimized by use of the Comcast housemark on fancast.com.  (Why would that help avoid reverse confusion? The Third Circuit has explicitly disapproved the effectiveness of a house mark in a reverse confusion case.  I can see the argument for why we should still count the house mark, and I actually am sympathetic to it, but it relies on a conclusion that Fancast isn’t really serving as a mark on its own, and I can’t imagine most TM owners like that logic.)
Plus, the marks evoked distinct meanings.  A “fancaster” is a fan acting as a broadcaster, as emphasized by the headphones.  Fancast doesn’t evoke the same meaning.
The court also dealt with Fancaster’s initial interest confusion argument here.  Based on the domain name, Fancaster argued, internet users who saw the domains on search engines, in sponsored ads, etc. would be confused.  In an IIC case, the relatedness of the parties’ products and consumers’ level of care are of particular importance.  Previewing what it would say about the other factors, the court found minimal content overlap, weighing against IIC.  Also, in the absence of record evidence about consumers’ level of care in searching for video content, the court went with Network Automation’s conclusion that the default level of care online is increasing.
The search engine results weren’t probative of IIC, because any internet user knows that a welter of search results creates uncertainty about where to go next, not necessarily trademark confusion. Thus, similarity weighed in favor of Comcast overall.
Strength divides into conceptual and marketplace strength.  Comcast was in as good a position as a TM owner can be in this kind of case: having abandoned Fancast as a branding strategy, it was free to dump on the strength of its own mark at will.  So it argued that Fancaster was merely descriptive of services that allow fans to become broadcasters.  Fancaster argued that 15 years of incontestability should create a presumption of strength, and that the mark was coined anyway and was therefore fanciful.
The court found Fancaster “even more descriptive” than Miraclesuit (a term the Third Circuit has held suggestive).  It’s a portmanteau of fan and broadcaster, and Fancaster’s business plan said that its content related to "fans who want to emulate broadcasters." Krueger testified that the terms "fan" and "broadcasting" relate to all the videos on the site because they "have some interest to the viewer of the clips" and "everyone is speaking into a microphone and being recorded and transmitted throughout the world," and that "Fancaster.com [is] a place that transforms fans into the role of a broadcaster...." Another witness testified that the term "fancaster" is used in "common parlance" to mean someone that "gives you a play by play of the whole game." (Never heard that, but I’m not exactly the demo, though give me a good liveblog ….)
Anyway, using a truncated version of a word doesn’t render the term arbitrary or fanciful.  (Comcast even offered a variety of other websites that used “caster” as a short form of “broadcaster.”)  The court found no stretch of the imagination required to see that fancaster.com “is a website that offers content related to sports and other fans as broadcasters.”  While “fancaster” “may not perfectly describe the nature of each and every video on fancaster.com,” that’s not the standard for descriptiveness; “it fairly describes certain distinct characteristics of the overwhelming majority of them--namely, a sports or other type of fan broadcasting via a microphone.”
Incontestability also had no bearing on likely confusion, only on validity.
Even if the court found “fancaster” suggestive or fanciful, it held, it would still find the mark weakened by evidence of its use in connection with various different products in the same market.  Comcast showed that there were many websites beginning with “fan” that offered video and other content relating to sports and fans.  The court named eight, including fanster.com (potential inducement if there’s infringing content thereon, as per one of the bad facts of Grokster?), fanpop.com (not primarily sports-related in my experience, which is born out by the homepage), and fanadu.com (cutest name in the bunch), as well as one mentioned by Fancaster in its business plan, fannation.com.
In a reverse confusion case, the commercial weakness of the junior user is less important and the strength of the senior user’s mark is more relevant.  Comcast’s substantial marketing campaign wasn’t sufficient to overcome Fancaster’s conceptual weakness, especially given the other “fan” websites, which made it “unlikely that consumers would associate websites featuring video content related to sports and other fans with a particular source, regardless of Comcast's commercial strength.”
Intent: Knowledge of the existence of a mark is insufficient to prove bad faith; the question is whether the junior user deliberately intended to push the senior user out of the market.  Comcast knew of Fancaster’s mark, but there was no evidence from which a jury could infer the intent to push Fancaster out of the market.  Comcast’s branding agency conducted consumer research and found that was the best name, and the Comcast team liked it as a merger of “The Fan” and the Comcast name.  Comcast’s notice of Fancaster’s C&D as to the Fox SportsNews Fancaster segment was irrelevant because that segment was an entirely different product and mark.  Moreover, Fancaster withdrew its C&D letters and didn’t sue. Comcast’s good faith explanation for its use of the name weighed heavily in its favor. 
Relationship of the services in consumers’ minds: The court found little relationship between the videos on the Fancast and Fancaster websites that would reasonably lead a consumer to believe that they were related.  Fancaster “focuses on short video clips emphasizing sports-related content, most of which feature a sports fan or athlete speaking into a microphone displaying the fancaster mark to discuss a particular sporting event, sports team, or sports fans in general.”  Krueger testified that a unifying theme of the clips was broadcasting: "[e]veryone is speaking into a microphone and being recorded." Fancast focused on full-length premium mainstream media content, including major television network programming, as well as full-length feature films offered by premium cable channels.  The overlap in sports-related video content wasn’t enough to make a reasonable consumer see the content as related.  Fancaster showed that there were short clips on both sites related to basketball, including player interviews and press conferences, as well as short clips on both sites related to the Westminster Kennel Club Dog Show.  (The court dismissed evidence that some video clips on Fancaster had the same topics as some search engine results for Fancast, because those might just indicate that Fancast carried a written story on that topic, not a video.)  “In light of the enormous number of videos offered on both sites, and the fact that they maintain very different emphases, this level of overlap is not significant enough to suggest a likelihood of confusion.”
Sales efforts/marketing channels: The court found “virtually no overlap” in the parties' marketing efforts.  Comcast marketed Fancast towards a national audience consuming mainstream media.  Fancaster's initial target audience was male sports fans ages 18-35.  What, those guys don’t consume mainstream media?  As far as I can tell, that’s who mainstream media is for, and that group is at least a subset of the “mainstream media” set.  But Fancaster argued that it was targeting male and female fans of sports, music, movies, social issues, politics and entertainment generally, without record support for that.  The court also found that the parties also used vastly different marketing channels: Comcast bought ads in mainstream print publications and on TV channels distributed on Comcast, while Fancaster used local TV channels in Sioux Falls, SD, and Sioux City, IA; radio stations in Charleston, SC; and flyers and handbills.  Comcast’s TV ads didn’t air in those cities.  They both used the internet, but that’s not enough to constitute overlapping marketing channels.  Moreover, while Comcast made substantial use of the internet in marketing, most of Fancaster’s marketing was not geared in that direction.  Krueger marketed Fancaster on sports-oriented websites and websites of certain local pubs, while Comcast bought banner ads on Comcast.net and other sites foucsed on popular TV and movies, such as TVGuide.com, as well as keyword ads for specific TV shows and terms such as "watch TV shows online."
Actual confusion/length of time without actual confusion.  Three years and two months of Fancast.com produced no evidence of actual confusion.  A former business partner of Krueger believed Fancaster was related to Comcast, but he’d never visited fancaster.com and apparently was unfamiliar with Fancast, so the court dismissed this as an anomaly. 
Fancaster offered several videos in which people prompted to say “You’re watching fancaster dot com” say things such as “You're watching fancast dot com," "It's Comcastic tonight," "Thanks for watching Fancast?", and "I'm here with fancast dot com."  But the record didn’t identify who these people were or the circumstances of taping, or whether they’d ever visited the parties’ sites.  (Is the latter important?  Do they only have to be likely consumers?  Does it matter if they go home and look in vain for their videos to show up on fancast.com and thus never become the proud participatory fans of fancaster.com’s desires who send links to all their friends?)  Confusion resulting from carelessness, indifference, or ennui is insufficient.  Plus, the second Poret survey weighed against finding confusion.  This weighed heavily in Comcast’s favor.
No likely confusion.
The court also thought Fancaster didn’t prove any entitlement to corrective advertising damages.  There wasn’t any evidence of damage to the Fancaster mark. 
Cybersquatting: Comcast didn’t address the ACPA claim in its opening brief, and addressing it in the reply brief was insufficient (and improper).  Hard to see how a renewed motion for summary judgment would fail, though, since the motion was denied without prejudice.
The court then turned to the counterclaims.  Fraud on the PTO: Comcast alleged that it suffered harms from two intentionally false statements to the PTO: First, Krueger’s 1988 declaration that he’d adopted and was using the Fancaster mark for communications and/or broadcasting services. Second, Krueger’s 1994 affidavit that he was using the mark in commerce in connection with the broadcasting services that were stated in the registration, and had been doing so for five consecutive years.  Comcast argued that the uses were "mere preparation," "demonstrations," "testing," or "marketing presentations" rather than bona fide use.
The court found this argument “tenuous.”   In 1988, a single “token use” would suffice (though this was soon thereafter changed by statute).  Moreover, Krueger introduced evidence of significant commercial and promotional actions in connection with Fancaster, both before and after registration.  Comcast needed clear and convincing evidence both that none of the preregistration uses constituted even token use and that Krueger knew or should have known that his uses wouldn’t qualify.
Krueger proffered evidence of: a February 1987 play-by-play broadcast using the Fancaster mark to observers of a motorcycle race; broadcasts in 1987 to observers equipped with Fancaster branded receivers at football games in Sioux City, IA, Worthington, MN, and the University of Kansas; a weather broadcast from a hot air balloon in the spring of 1988; the sale of Fancaster branded radios in July of 1988; and the transmission of a prerecorded program to individuals using Fancaster branded radios at Lake Okoboji, IA. After the application, Krueger continued similar activities, and even produced karaoke shows under the mark. 
Comcast raised legal and factual questions about each of these uses, but the court wasn’t going to get mired in the details.  It was undisputed that Krueger “engaged in significant commercial and promotional activity involving the Fancaster mark over the course of many years.”  Even if Comcast managed to kick each one out on a technicality, “either because they were mere demonstrations, or involved sales of products other than broadcast services or communication,” it offered no evidence from which a jury could conclude that Kreuger had the requisite mental state.  “A lay businessman who spends years of his life selling branded radios, performing branded broadcasts, and vigorously promoting additional businesses under a given mark would have no obvious reason to suspect that his significant efforts do not constitute ‘use in commerce.’”
Comcast argued that Krueger’s intent was shown because he submitted blank letterhead and envelopes in connection with his combined  affidavit of use and incontestability because he’d been told that letterhead was insufficient in previous communications with the PTO.  The court found this fact to prove nothing.  Even if he knew this was insufficient evidence of use, that doesn’t show knowledge that the underlying statements concerning use were false.  (I imagine that this conclusion would be different without all that use-like activity; if he had letterhead and nothing else, it would be easier to infer intent.)  Moreover, the PTO actually accepted the letterhead and envelopes.  “Comcast's real complaint is not with Mr. Krueger's submission to the PTO, but with the PTO's decision to accept the-undeniably flimsy-evidence in approving the incontestability application.”  Maybe Krueger only had limited success marketing his service, but the record showed that he kept trying to build the brand.
Summary judgment for Fancaster on this claim. Comcast also sought a declaratory judgment of cancellation, which was also dismissed on the same rationale.
Cybersquatting: The court found jury questions sufficient to preclude summary judgment on several aspects of Comcast’s ACPA counterclaim, including—appallingly—whether Fancast was famous.  While the court concluded that “[t]here is ample evidence of ‘distinctiveness’ and ‘fame’ to send the issue to a jury,” the latter can’t seriously be in play once attention is given to the question.
What was clear was that Krueger registered dozens of websites containing the word “fancast,” differing from the official Fancast.com only in their extensions.  These were identical or confusingly similar to Comcast’s domain name.
Several of the factors listed in the statute weighed in favor of bad faith: the domain names were identical to Comcast’s heavily promoted website; plaintiffs had no prior registration for Fancast and had never offered products or services bearing that mark.  They used the domains to redirect traffic to fancaster.com or used “parked” ad pages, rather than conducting business using them.  Plaintiffs argued that they were entitled to the safe harbor for people who believe and have reasonable grounds to believe that their uses were fair or otherwise lawful. Given their valid registration for Fancaster, they argued that they had an objectively reasonable belief that they could fairly/lawfully register the domain names at issue.  Moreover, they argued that their registration of various “fancast” websites before Fancast.com was active precluded any finding that subsequent registration violated ACPA.
The court found these arguments disingenous.  Comcast bought fancast.com and filed an application with the PTO for Fancast in August 2006, and Krueger began registering large numbers of “fancast” domains almost immediately thereafter. While the site wasn’t officially launched for public use until later, “Mr. Krueger does not actually claim that he was unaware of Comcast's purchase, registration, or plans to use the fancast.com domain name to heavily promote services sold under the FANCAST mark. Indeed, he explicitly withdrew prior statements to that effect.”  His timing and unwillingness to deny knowledge “is itself highly suggestive of intent.”  That was enough to get to a jury.
The court also dealt with Comcast’s laches and acquiescence defenses as applied to Fancaster’s remaining ACPA claim.  Both would require a showing that Comcast acted in reliance on its belief that Fancaster wouldn’t enforce its rights and would be prejudiced if Fancaster were allowed to sue now.  Comcast argued that Fancaster waited 14 months before filing suit, that a jury could infer acquiescence from its November 2006 letter approving the Fox SportsNews Fancaster segment, and that Comcast suffered business uncertainty arising from the lawsuit. 
The court found that there was no evidence that Comcast relied either on the November 2006 letter or on Fancaster’s delay in bringing suit.  Without reliance, there was no prejudice and the laches and acquiescence defenses were thus stricken.

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