By: Joanna Scleidorovich

Plaintiff, Alpha Recycling (“Alpha”), a New York corporation that recycles catalytic converters and scrap metal.[1] Alpha Recycling uses the unregistered mark “ALPHA” in connection with its business, as well as the AlphaRecyclingUS.com domain name.[2] Defendant, Timothy Crosby (“Crosby”), is a metal broker and trader of catalytic converters. Crosby does business under the names “Converter Guys” and “Converter Guy.” [3]

The parties have a history of doing business together, and there is little evidence that either complained to the other about their business practices.[4] However, about a year after the parties began their business endeavor, Crosby began registering domain names using the term “alpha” in connection with recycling services, such as “AlphaRecyling-US.com,” “AlphaConverters.net,” and “AlphaRecyclingUS.net.”[5] Evidence suggests that Crosby’s “AlphaConverters.net” website redirected customers to Crosby’s “Converterguys.com” website, that he posted defamatory videos of Alpha’s business on YouTube, and that he negatively reviewed Alpha on review sites.[6]

Alpha brought three claims against Crosby: (1) cybersquatting pursuant to the Anticybersquatting Consumer Protection Act (“ACPA”); (2) trademark infringement; and (3) common law defamation and libel. The Court affirmed summary judgment for the Plaintiff on the first two claims. [7]

Cybersquatting is defined as registering as domain names the names of well-known trademarks that belong to someone else. .[8] The test for determining cybersquatting requires the Plaintiff to meet three elements: (1) distinctiveness of the mark at the time of domain name registration; (2) infringing domain name is identical to or confusingly similar to Plaintiff’s mark; and (3) defendant has a bad-faith intent to profit from the mark.

In this case, the Court explained that a mark is distinctive if “it would qualify for registration.”[9] Trademark law requires that a mark be either inherently distinctive, which is derived from the mark’s nature as indicative of a particular source, or acquire secondary meaning in the mind of the consumer. Although the term “ALPHA” is not distinctive on its own, when used in connection with metal services and converter recycling, the mark becomes arbitrary and thus inherently distinctive.[10] Next, the court briefly analyzed the similarity of the marks and concluded that the domain name “AlphaRecycling-US.com” is identical and confusingly similar to Alpha’s “AlphaRecyclingUS.com” domain name.[11]

Finally, the Court delved into the “bad faith” analysis of the decision and explained that of the factors used to determine bad-faith intent, one stands out the most: diverting customers from the website for the trademark owner to the infringing person’s website purely for profiting purposes.[12] Since the uncontested evidence clearly suggests that Defendant was profiting from the redirection of customers from the infringing website to theirs, the Court ruled this a “quintessential example” of bad faith with the meaning of the Anticybersquatting Consumer Protection Act.

The holding of this case represents a clear and simple example of cybersquatting. Although it might seem easy to resolve, developments in the Internet allow for greater amounts of counterfeiting websites and infringing activities to take place. Some argue that the Internet Association of Assigned Names and Number’s (“ICANN”) plan for expansion of the Internet is stirring up controversy as to whether the program was properly designed to protect trademark owners from infringing activities.[13]

[1] See Alpha Recycling v. Crosby, 2016 U.S. Dist. LEXIS 37953, *1 (S.D.N.Y. Mar. 23, 2016).

[2] Id.

[3] Id. at *2.

[4] Id. at *3–*5.

[5] See Alpha Recycling v. Crosby, 2016 U.S. Dist. LEXIS 37953, *3 (S.D.N.Y. Mar. 23, 2016).

[6] Id. at *4-*5.

[7] Id. at *6.

[8] Sporty’s Farm LLC v. Sportsman Market, Inc., 202 F.3d 489, 493 (2d Cir. 2000).

[9] Alpha Recycling v. Crosby, 2016 U.S. Dist. LEXIS 37953, *8 (S.D.N.Y. Mar. 23, 2016).

[10] Id. at *8-9 (explaining that word marks that are considered “arbitrary,” “fanciful,” or suggestive” are also considered inherently distinctive).

[11] Id. at *16.

[12] Id. at *19.

[13] See Jeannie McPherson, The Real Facts About New gTLDs, CircleID (Dec. 17 2014, 6:00 PM PDT), https://www.circleid.com/posts/20141217_the_real_facts_about_new_gtlds/