David Carnivale v. Staub Design

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 13-1354
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DAVID JOHN CARNIVALE
v.
STAUB DESIGN LLC; JOHN STAUB; & DAVID STAUB
Appellants
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Appeal from the United States District Court
for the District of Delaware
(Civ. No. 08-764-SLR)
District Judge: Honorable Sue L. Robinson
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Submitted Under Third Circuit LAR 34.1(a)
October 31, 2013
Before: McKEE, Chief Judge, FISHER and SLOVITER, Circuit Judges
(Opinion Filed: December 3, 2013)
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OPINION
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MCKEE, Chief Judge
Staub Design, LLC, John Staub, and David Staub (collectively, “Staub Design” or
“Appellants”) appeal a judgment in favor of David John Carnivale for violation of the
Anticybersquatting Consumer Protection Act (“ACPA”), Pub. L. No. 106-113, § 3002,
113 Stat. 1501 (1999) (codified at § 43(d) of the Lanham Act, 15 U.S.C. § 1125(d)
(2012)). For the reasons set forth below, we will affirm the District Court’s judgment.1
I.
Because we write primarily for the parties who are familiar with this case, we need
not recite the procedural or factual background.
“We exercise plenary review over the District Court's legal conclusions regarding
the Lanham Act,” but review its factual findings for clear error. Sabinsa Corp. v.
Creative Compounds, LLC, 609 F.3d 175, 182 (3d Cir. 2010). “Clear error exists when,
giving all deference to the opportunity of the trial judge to evaluate the credibility of
witnesses and to weigh the evidence, we are left with a definite and firm conviction that a
mistake has been committed.” Id.
A.
To prevail on his ACPA claim, Carnivale must prove that 1) “The Affordable
House,” “is a distinctive or famous mark entitled to protection,” 2) Staub Design’s
domain name is “identical or confusingly similar to” his mark, and 3) Staub Design
“registered the domain name[] with the bad faith intent to profit from [it].” Shields v.
Zuccarini, 254 F.3d 476, 482 (3d Cir. 2001); see 15 U.S.C. § 1125(d)(1)(A). We are only
1
The District Court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338, and this
Court has jurisdiction pursuant to 28 U.S.C. §§ 41 and 1291.
2
concerned with the third element: Staub Design’s bad faith intent to profit from
Carnivale’s mark. See 15 U.S.C. § 1125(d)(1)(A)(i).2
The ACPA sets forth nine factors that a court should consider in determining the
existence of bad faith. 15 U.S.C. § 1125(d)(1)(B)(i)(I)–(IX). As has been pointed out at
various stages of this litigation, the factors should be applied in a holistic manner and
“not [as a] mechanical[] exercise.” Green v. Fornario, 486 F.3d 100, 106 (3d Cir. 2007).
Moreover, the ACPA expressly allows courts to “consider any other elements of bad
faith” not enumerated in the statute. Advance Magazine Publishers Inc. v. Vogue Int'l,
123 F. Supp. 2d 790, 799 (D.N.J. 2000); see 15 U.S.C. § 1125(d)(1)(B)(i) (using
permissive language).
On remand, we instructed the District Court to reevaluate factor five, the “intent to
divert consumers,” and factor nine, “the extent to which the mark . . . is or is not
distinctive and famous.” Carnivale, 456 F. App'x at 107. We now review the results of
that balancing process.
2
In this second appeal, Staub Design also challenges the District Court’s determination
on the first element, whether Carnivale’s mark is “distinctive.” Appellants’ Br. 4-21.
Our opinion on the first appeal explicitly stated that “[w]e do not here disturb the District
Court’s ruling [on summary judgment] that Carnivale’s mark is distinctive . . . .”
Carnivale v. Staub Design, LLC, 456 F. App'x 104, 108 n.3 (3d Cir. 2012). Consequently,
this challenge is foreclosed under “law-of-the-case doctrine” which “bars our
reconsideration of issues previously resolved by an earlier panel.” Atl. Coast Demolition
& Recycling, Inc. v. Bd. of Chosen Freeholders of Atl. Cnty., 112 F.3d 652, 663 (3d Cir.
1997). When this Court affirms in part and reverses in part, the issues that we necessarily
dispose of in the affirmance become “law-of-the-case” despite our remand for additional
proceedings on separate issues. Todd & Co., Inc. v. S.E.C., 637 F.2d 154, 156-57 (3d Cir.
1980); see also Cowgill v. Raymark Indus., Inc., 832 F.2d 798, 802 (3d Cir. 1987). Staub
Design does not assert any of the exceptions to the doctrine. See Pub. Interest Research
Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116-17 (3d Cir. 1997).
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B.
As to factor five,3 although we agreed with the District Court that because “intent
is rarely discernible directly, it must typically be inferred from pertinent facts and
circumstances,” Audi AG v. D'Amato, 469 F.3d 534, 549 (6th Cir. 2006) (quoting Int'l
Bancorp, L.L.C. v. Societe Des Baines De Mer Et Du Cercle Des Etrangers A Monaco,
192 F. Supp. 2d 467, 486 (E.D. Va. 2002)) (internal quotation marks omitted), we
nevertheless directed the District Court to consider whether the record supported an
inference that the Appellants intended to divert consumers. Carnivale, 456 F. App’x at
107.
In doing so, the District Court highlighted testimony in which John Staub admitted
to viewing Carnivale’s website, www.affordablehouse.com. That website was replete
with home building-related content, and the District Court pointed to evidence that
Appellants registered their domain name, www.theaffordablehouse.com, a short time after
John Staub viewed Carnival’s website. Carnivale v. Staub Design, LLC, Civ. No. 08–
764–SLR, 2012 WL 6814251, at *2-3 (D. Del. Jan. 7, 2012). Moreover, the District
Court refused to credit John Staub’s claim that his website was intended to serve a purely
3
In full, factor five reads:
(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;
15 U.S.C. § 1125(d)(1)(B)(i)(V).
4
educational function. Rather, the court ruled to the contrary based on evidence that
supported a finding of a profit motive. Id. at *3. From that evidence, the District Court
inferred that Staub Design sought to ride the coattails of Carnivale’s long-established
website—an indicator of bad faith. Id.
On this record, we are not left with a “definite and firm conviction” that Staub
Design’s intent was unrelated to consumer diversion. This is especially true when we
consider that Staub Design’s domain name is the entirety of Carnivale’s mark, “The
Affordable House.” See Int'l Bancorp, 192 F. Supp. 2d at 486.
As to factor nine,4 we directed the District Court to assess the extent to which the
mark is distinctiveness. Carnivale, 456 F. App’x at 108. See § 1125(d)(1)(B)(i)(IX); see
also Shields, 254 F.3d at 482.5 Secondary meaning is also relevant to this inquiry. See
E.T. Browne Drug Co. v. Cococare Products, Inc., 538 F.3d 185, 199 (3d Cir. 2008). On
remand, the District Court considered these factors and again concluded that “the ninth
factor slightly supports a finding of bad faith.” Carnivale, 2012 WL 6814251, at *4.
Although the District Court’s analysis of factor nine on remand is not without
some shortcomings, we cannot conclude that its findings were clearly erroneous. Further,
while the “unique circumstances” cited by the District Court are not exceedingly
4
In full, factor nine reads:
(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) of this section.
15 U.S.C. § 1125(d)(1)(B)(i)(IX).
5
The factors as listed in Shields were re-written as part of the Trademark Dilution
Revision Act, Pub. L. No. 109-312, § 2, 120 Stat. 1730 (2006).
5
indicative of bad faith, we find no clear error with their inclusion in the holistic approach.
Moreover, when we accord the proper amount of deference to the District Court’s
balancing of both statutory and non-statutory factors, we are not left with a “definite and
firm conviction that a mistake has been committed.” Sabinsa Corp., 609 F.3d at 182.
II.
Accordingly, we will affirm the judgment of the District Court.
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