james s. tyre, state bar number 083117 law offices of...

Memorandum of Law In Support of Defendant’s Rule 12(b) Dismissal or Transfer Motion, Unicom v. Rosenthal,CV-01-09386-GHK(SHx)

JAMES S. TYRE, State Bar Number 083117LAW OFFICES OF JAMES S. TYRE10736 Jefferson Blvd., #512Culver City, CA 90230-4969310.839.4114Fax 310.839.4602

CHERIE M. CHAPPELL(Pro Hac Vice Admission Pending)A Member of CHAPPELL LAW FIRM, P.L.L.C.P.O. Box 5243Edmond, OK 73083-5243t405.340.7755Fax 405.340.7757

ATTORNEYS FOR DEFENDANT

UNITED STATES DISTRICT COURT FOR THE1CENTRAL DISTRICT OF CALIFORNIA2

3)4

UNICOM SYSTEMS, INC., a ) Civil Action No. 01-09386-GHK (SHx)5California corporation, )6

)7Plaintiff, ) DEFENDANT’S MEMORANDUM 8

) OF LAW IN SUPPORT OF9vs. ) DEFENDANT’S FED.R.CIV.P. 10

) 12(b)(2), 12(b)(3), and 12(b)(6),11LEONARD ADAM ROSENTHAL, ) MOTION TO DISMISS FOR12aka Chip Rosenthal dba UNICOM ) LACK OF PERSONAL13SYSTEMS DEVELOPMENT, an ) JURISDICTION, FOR IMPROPER14individual, ) VENUE, AND FOR FAILURE TO 15

) STATE A CLAIM. 16Defendant. )17

______________________________ )1819

This motion follows conferences of counsel, and accompanying correspondence, 20pursuant to Local Rule 7.4.1, which conference took place on December 20, 2001.21The substance of these conference is summarized on the following page. 22

23JUDICIAL OFFICER: Hon. George H. King, United States District24

Judge. 2526

Hearing Date: January 28, 2002, 9:30 a.m., Courtroom 66027


-i-

Summary of Conferences

This motion is made following the conferences of counsel, and

accompanying correspondence, pursuant to Local Rule 7.4.1. Said conferences

took place on December 20, 2001, December 26, 2001, and December 27, 2001, as

demonstrated by the attached correspondence (See Declaration of Cherie M.

Chappell Concerning Pre-Filing Conference of Counsel, (December 28, 2001)).

In both the December 20, 2001, and the December 26, 2001, conferences

Plaintiff’s counsel was specifically told (1) that jurisdiction was contested, (2) that

transfer of all proceedings to a more appropriate jurisdiction would be sought by

Defendant (3) that the Complaint failed to state any claim upon which relief could

be granted, and (4) that Plaintiff would be afforded every opportunity to dismiss

the suit or particular counts. Settlement was also discussed with great candor.

Plaintiff’s counsel responded that Plaintiff believes the jurisdictional

question to be an issue in this matter. Plaintiff’s counsel stated that Plaintiff was

not willing to terminate the present litigation and re-file it in a more appropriate

jurisdiction. Plaintiff also reiterated that their primary goal in this litigation was to

seek the equitable remedy of having the court order the transfer of Defendant’s

domain name to Plaintiff. Plaintiff was told with specificity that Defendant did

not wish to relinquish or sell his domain name.

The pre-filing consultation requirements were satisfied on December 20,

2001, and December 26, 2001.


-ii-

TABLE OF CONTENTSSUMMARY OF CONFERENCES .........................................................................-i-TABLE OF CONTENTS....................................................................................... -ii-TABLE OF AUTHORITIES................................................................................ -iii-INTRODUCTION........................... .......................................................................-1-STATEMENT OF THE CASE ..............................................................................-4-ARGUMENT...........................................................................................................-7-I. Plaintiff’s Attempt To Assert Personal Jurisdiction Extraterritorially

Without (1) Minimum Contacts or (2) Fair Play And Substantial Justice, Violates Due Process.......................................................................-9-General Jurisdiction.................................................................................-10-Specific Jurisdiction..................................................................................-11-

II. Venue Should Be Transferred to the Western District of Texas................-13-III. Plaintiff’s Complaint Fails To State A Claim............................................-13-

A. Plaintiff’s “Cybersquatting” Claims Fail Because The Domain Name Registration Is For A Legal Use, Not For Sale......................-14-

B. Plaintiffs’ Trademark Dilution and Infringement Claims Are Equally Faulty. .................................................................................-15-

(I). Federal Law Dilution Analysis........................................-16-(II). State Law Dilution Analysis...........................................-18-(III). Infringement under the Lanham Act.............................-18-(IV). State Law Infringement Analysis..................................-22-(V). False Designation of Origin Claims under

15 U.S.C. §1125(a)......................................................-22-(VI). Unfair Competition and Cal. Bus. & Prof.

Code §17200................................................................-24-C. “Bad Faith Intent” Is Not Present As a Matter of Law....................-24-

CONCLUSION ....................................................................................................-25-


-iii-

TABLE OF AUTHORITIESCASES

Academy of Motion Pictures Arts and Sciences v. Creative House Promotions, Inc.,

944 F.2d 1446 (9th Cir. 1991).........................................................................22

Accuride Int’l, Inc. v. Accuride Corp., 871 F.2d 1531 (9th Cir. 1989)........................................................................17

ACLU v. Reno31 F.Supp.2d 473 (E.D. Pa. 1999)..................................................................3

Acri v. Varian Assoc.,114 F.3d 999 (9th Cir. 2000)...........................................................................24

American Tel. & Tel. Co. v. Compagnie Bruxelles Lambert94 F.3d 586 (9th Cir. 1996)............................................................................10

AMF v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979).....................................................................19,21

Anderson v. Creighton,483 U.S. 635 (1987) .......................................................................................25

Asahi Metal Indus. Co. v. Superior Ct. Of Cal.,480 U.S. 102 (1987) .........................................................................................9

Avery Dennison Corp. v. Sumpton, 999 F. Supp. 1337 (C.D. Cal. 1998)..........................................................17,18

Bally Total Fitness Holding Corp., v. Faber, 29 F. Supp.2d 1161 (C.D. Cal. 1998)........................................................19,20

Bancroft & Masters, Inc. v. Augusta Nat’l, Inc.,223 F.3d 1082 (9 th Cir. 2000).........................................................4,10,12,13

Barrett v. Catacombs Press,44 F. Supp. 2d 717 (E.D. Pa. 1999)..............................................................12

Bensusan Restaurant Corp. v. King,126 F.3d 25 (2 nd Cir. 1997).........................................................................11


-iv-

CASES

Beverly v. Network Solutions, Inc.,No. 98-0037, 1998 WL 320829 (N.D. Cal. June 12, 1998)............................3

Branch v. Tunnell,14 F.3d 449 (9th Cir. 1994)............................................................................14

Brand v. Menlove Dodge,796 F.2d 1070 (9th Cir. 1986).........................................................................10

Brookfield Communications v. West Coast Entertainment Corp., 174 F.3d 1036, 1060 (9th Cir. 1999)...............................................................21

Calder v. Jones,465 U.S. 783 (1984)........................................................................................12

Cardservice Int’l Inc. v. McGee,950 F.Supp 737aff’d 129 F.3d 1258 (4th Cir. 1997)...................................................................3

Clegg v. Cult Awareness Network,18 F.3d 752 (9 th Cir. 1994)...........................................................................14

Cybersell, Inc. v. Cybersell, Inc.,130 F.3d 414 (9 th Cir. 1997) .............................................................1,9,11,12

Doe v. Unocal Corp.248 F.3d 915 (9th Cir. 2001)..........................................................................10

Dreamworks Production Group, Inc., v. SKG Studio, 142, F.3d 1127, 1129 (9th Cir. 1998).............................................................21

Durning v. First Boston Corp.,815 F.2d 1265 (9 th Cir. 1987) ....................................................................14

GTE New Media Servs. v. Bellsouth Corp.,199 F.3d 1343 (D.C. Cir. 2000) ......................................................1,10,12,13

Hanson v. Denckla,357 U.S. 235 (1958) .....................................................................................10

Harlow v. Fitzgerald457 U.S. 800 (1982)......................................................................................25


-v-

CASES

Hasbro Inc. v. Clue Computing,66 F. Supp. 2d 117 (D. Mass. 1999),aff’d, 232 F.3d 1 (1 st Cir. 2000) .........................................................16,17,18

Heathmount A.E. Corp v. Technodome.Com,106 F. Supp. 860 (E.D. Va. 2000), certified for interlocutory appeal,No. 01-1153 (4 th Cir. Feb. 2, 2001). .........................................................4,11

Helicopteros Nacionales de Colombia, S.A. v. Hall,466 U.S. 408 (1984) ......................................................................................9

Hornell Brewing Co. v. Rosebud Sioux Tribal Court,133 F.3d 1087 (8th Cir. 1998)........................................................................11

Intermatic Inc. v. Toeppen, 947 F.Supp. 1227 (N.D. Ill. 1996)..................................................................4

International Shoe Co. v. Washington,326 U.S. 310 (1945) ...................................................................................9,10

Interstellar Starship Services Ltd. v. EPIX, Inc.,983 F.Supp. 1331 (D. Or. 1997)....................................................................20

Lockheed Martin Corp. v. Network Solutions, Inc.,985 F.Supp 949 (C.D. Cal 1997)...................................................................15

Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922 (4th Cir. 1995)...........................................................................23

Mattel, Inc. v. MCA Records, Inc.,28 F. Supp. 2d 1120 (C.D. Cal. 1998) ..........................................................16

McNutt v. General Motors Acceptance Corp.,298 U.S. 178 (1936)......................................................................................14

Millennium Enters., Inc. v. Millennium Music, LP,33 F. Supp. 2d 907 (D.Or. 1999) ..............................................................10,11

Milliken v. Mayer,311 U.S. 457 (1940)......................................................................................13


-vi-

CASES

Mink v. AAAA Development LLC,190 F.3d 333 (5th Cir. 1999) ........................................................................11

Mullins v. United States Bankruptcy Court,828 F.2d 1385 (9th Cir. 1987)........................................................................14

Neogen Corp. v. Neo Gen Screening, Inc.,109 F. Supp. 2d 724 (W.D. Mich. 2000) ......................................................11

New Kids on the Block v. News Am. Publ’g, Inc.,971 F.2d 302 (9th Cir. 1992) ........................................................................16

Niton Corp. v. Radiation Monitoring Devices, Inc., 27 F.Supp.2d 102 (D.Mass. 1998)..................................................................3

Nutri/System Inc. v. Con-Star Indust. Inc., 809 F.2d 601 (9th Cir.1987)...........................................................................21

Official Airline Guides, Inc. v. Goss, 6 F.3d 1385 (9th Cir. 1993)........................................................................19,21

Panavision v. Toeppen,141 F.3d 1316 (9th Cir. 1998) ..............................................................2,3,9,18

Parks v. LaFace Records, Inc.,76 F. Supp. 2d 775 (E.D. Mi. 1999) .............................................................16

Perry v. RightOn.com,90 F. Supp. 2d 1138 (D.Or. 2000) ................................................................11

Playboy Enters. V. Universal Tel-a-Talk, Inc.,No.96-6961, 1998 WL 767440 (E.D.Pa. Nov. 3, 1998).................................3

Pinocchio’s Pizza Inc. v. Sandra, Inc.,11 U.S.P.Q.2d 1227 (T.T.A.B. 1989)............................................................21

Reno v. American Civil Liberties Union,521 U.S. 844 (1997).....................................................................................1,2


-vii-

CASES

R.M.S. Titanic, Inc. v. Haver,171 F. 3d 943 (4th Cir.),cert. denied, 528 U.S. 825 (1999)...................................................................4

Rock and Roll Hall of Fame and Museum, Inc. v. Gentile Prods.,134 F.3d 749 (6th Cir. 1998) ........................................................................16

Rodeo Collection Ltd. v. West Seventh,812 F.2d 1215 (9th Cir. 1987)........................................................................21

Roth v. Garcia Marquez,942 F.2d 617 (9th Cir. 1991) ........................................................................14

Schwarz v. United States,234 F.3d 428 (9 th Cir. 2000)........................................................................14

Shaffer v. Heitner,433 U.S. 186 (1977).........................................................................................9

Shea v. Reno,930 F.Supp 916 (S.D.N.Y. 1996)aff’d 117 S.Ct. 2501 (1997).............................................................................3

Soma Medical Intern. v. Standard Chtd. Bank,196 F.3d 1292 (10th Cir.1999)......................................................................11

Steckman v. Hart Brewing, Inc.,143 F.3d 1293 (9th Cir. 1998) ......................................................................14

Sterling Drug, Inc. v. Bayer A.G.,14 F.3d 733 (2nd Cir. 1994) ...........................................................................4

Taylor v. Portland Paramount Corp.,383 F.2d 634 (9th Cir. 1967)..........................................................................14

Texans Against Censorship v. State Bar of Tex.,888 F. Supp. 1328 (E.D. Tex. 1995)aff'd, 100 F.3d 953 (5 th Cir. 1996)...............................................................12


-viii-

The Network Network v. CBS Inc., 54 U.S.P.Q.2d 1150, 1155 (C.D. Cal. 2000).............................................20,21

CASES

Toys “R” Us, Inc. v. Feinberg, 26 F.Supp.2d 639 (S.D.N.Y. 1998)................................................................20

United Drug Co. v. Theodore Rectanus Co.,248 U.S. 90 (1918) ........................................................................................16

United States v. Microsoft,147 F.3d 935 (D.C. Cir. 1998)......................................................................1,2

Washington Speakers Bureau, Inc. v. Leading Authorities, Inc.,No. 98-634, 1999 WL 51869 (E.D. Va. Feb. 2, 1999)....................................3

Weiner King, Inc., v. Weiner King Corp.,615 F.2d 512 (C.C.P.A. 1980)........................................................................21

Winfield Collection, Ltd. v. McCauley,105 F. Supp. 2d 746 (E.D. Mich. 2000).........................................................11

Yahoo! Inc. v. LICRA,No. 00-21275-JF, __ F.Supp.2d __,2001 WL 640418 (N.D. Cal. June 7, 2001)...................................................4,9

Zippo Mfg. Co. v. Zippo Dot Com, Inc.,952 F. Supp. 1119 (W.D. Pa. 1997) ...............................................................10

STATUTES, CONSTITUTION, AND RULES

15 U.S.C. § 1052(f) .................................................................................................15

15 U.S.C. § 1114......................................................................................................19

15 U.S.C. § 1125.....................................................................................................22

15 U.S.C. § 1125(a) ........................................................................................19,22,23

15 U.S.C. § 1125(c) ........................................................................................15,16,18

15 U.S.C. § 1125(d) ......................................................................................14,15,24


-ix-

15 U.S.C. § 1127 .....................................................................................................17


28 U.S.C. § 1391...................................................................................................4,13

28 U.S.C. § 1404(a) ..............................................................................................4,13

37 C.F.R. Part-2§2.41...............................................................................................15


CAL. BUS. & PROF. CODE § 14330.....................................................................18

CAL. BUS. & PROF. CODE § 14415.....................................................................22

CAL. BUS. & PROF. CODE § 17200.....................................................................24


FED. R. CIV. P. 12(b)(2) ..........................................................................................4

FED. R. CIV. P. 12(b)(3) ..........................................................................................4

FED. R. CIV. P. 12(b)(6) ...........................................................................4,13,15,21

OTHER AUTHORITIES

Note, Recent Case: Civil Procedure –D.C. Circuit Rejects Sliding Scale Approach to FindingPersonal Jurisdiction Based on Internet Contacts –GTE New Media Services Inc. v. Bellsouth Corp.,113 HARV. L.R. 1128 (2000). .....................................................................10

1 GTE New Media Servs. v. Bellsouth Corp., 199 F.3d 1343, 1349-50 (D.C. Cir. 2000); 1

Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997).2 Memorandum of Law In Support of Defendant’s Rule 12(b) Dismissal or Transfer Motion, Unicom v. Rosenthal,CV-01-09386-GHK(SHx)

-1-

INTRODUCTION 1

This case raises important issues, including (1) Due Process limits on2

jurisdiction ,1 (2) Retroactive application of federal Trademark law, and (3) the3

impact of these considerations upon a “unique and wholly new medium of4

worldwide human communication - the internet.” Reno v. A.C.L.U., 521 U.S. 844,5

850 (1997).6

The Internet is a global network of interconnected computers which allows7

individuals and organizations around the world to communicate and to share8

information with one another. The web, a collection of information resources9

contained in documents located on individual computers around the world, is the10

most widely used and fastest-growing part of the Internet except perhaps for11

electronic mail ("e-mail"). See, United States v. Microsoft, 147 F.3d 935, 93912

(D.C. Cir. 1998). With the web becoming an important mechanism for commerce,13

companies are racing to stake out their place in cyberspace. See, Reno v. ACLU,14

844 U.S. at 853.15

Each web site has a corresponding domain name (also called a “URL” or16

uniform resource locator), which is an identifier somewhat analogous to a17

telephone number or street address. Domain names consist of a second-level18

domain -- simply a term or series of terms (e.g., unicom) – followed by a top-level19

domain, many of which describe the nature of the enterprise. The Internet DNS20

(Domain Name System) provides easy-to-remember mnemonic names called21

domain names for computers. DNS names (such as “cs.utexas.edu”) are structured22

as a top-level domain (“edu”), preceded by a second-level domain assigned to an23

organization (“utexas”), preceded by any number of phrases chosen by that24

organization (“cs”). Other top-level domains are ".com" (commercial25


-2-

organization), ".edu" (educational), ".org" (non-profit and miscellaneous1

organizations), ".gov" (federal government), ".net" (networking provider), and2

".mil" (U.S. military). See, Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 13183

(9th Cir. 1998). Commercial entities generally use the ".com" top-level domain. 4

See, Id. A domain name is the concatenation of a second-level domain and a top-5

level domain, such as "unicom.com".6

To obtain a domain name, an individual or entity selects a top-level domain,7

and files an application with a Registrar that has been accredited by ICANN8

(Internet Corporation for Assigned Names and Numbers) for that top-level9

domain. The Registrar will verify that the desired name is unassigned. If the10

desired name is already assigned, the application will be denied and the applicant11

must choose a different domain name. Other than requiring an applicant to make12

certain representations, the Registrars for the .com, .org and .net top-level domains13

do not make an independent determination about a registrant's right to use a14

particular domain name. See, Id. at 1318-19. 15

Each web page has a corresponding URL (Uniform Resource Locator),16

which is an identifier somewhat analogous to a telephone number or street17

address. Within the URL is the domain name that hosts the web page. Using a18

web page browser, such as Netscape’s Navigator® or Microsoft’s Internet19

Explorer®, a user may enter URLs to Navigate the Web – searching for,20

communicating with, and retrieving information from various web sites. See, Id.;21

Microsoft, 147 F.3d at 939-40, 950. Most web browsers allow users to enter a22

domain name - rather than a full URL - to access the home page of a web site.23

A specific web site is most easily located by using its domain name. See,24

Panavision, 141 F.3d at 1327. Upon entering a domain name into a web browser,25

the corresponding web site will quickly appear on the computer screen. 26

Sometimes, however, a web surfer will not know the domain name of the site she27

is looking for, whereupon she has two principal options: trying to guess the28


-3-

domain name or seeking the assistance of an Internet "search engine." Often, an1

Internet user will begin by hazarding a guess at the domain name. Web users2

often assume, as a rule of thumb, that the domain name of a particular company3

will be the company name followed by ".com." See, Id.; Playboy Enters. v.4

Universal Tel-a-Talk, Inc., No. 96-6961, 1998 WL 767440, at 2 (E.D. Pa. Nov. 3,5

1998); Cardservice Int'l, Inc. v. McGee, 950 F. Supp. 737, 741 (E.D. Va. 1997),6

aff'd by, 129 F.3d 1258 (4th Cir. 1997). For example, one looking for Kraft7

Foods, Inc., might try "kraftfoods.com" This particular web site contains8

information on Kraft's many food products. 9

Sometimes, a trademark is better known than the company itself, in which10

case a web surfer may assume that the domain name will be " ‘trademark’.com."11

See, Panavision, 141 F.3d at 1327; Beverly v. Network Solutions, Inc., No. 98-12

0337, 1998 WL 320829, at 1 (N.D. Cal. June 12, 1998) ("Companies attempt to13

make the search for their web site as easy as possible. They do so by using a14

corporate name, trademark or service mark as their web site address."). 15

Guessing domain names, however, is not a risk-free activity. The web surfer16

who assumes that " ‘X’.com" will always correspond to the web site of company X17

or trademark X will, however, sometimes be incorrect. A web surfer's second18

option when he does not know the domain name is to utilize an Internet search19

engine, such as Yahoo, Altavista, or Lycos. See, ACLU v. Reno, 31 F. Supp. 2d20

473, 484 (E.D. Pa. 1999); Washington Speakers Bureau, Inc. v. Leading21

Authorities, Inc., No. 98-634, 1999 WL 51869, at 9 (E.D. Va. Feb. 2, 1999). 22

When a keyword is entered, the search engine processes it through a self-23

created index of web sites to generate a (sometimes long) list relating to the entered24

keyword. Each search engine uses its own algorithm to arrange indexed materials in25

sequence, so the list of web sites that any particular set of keywords will bring up26

may differ depending on the search engine used. See, Niton Corp. v. Radiation27

Monitoring Devices, Inc., 27 F. Supp. 2d 102, 104 (D. Mass. 1998); Intermatic Inc.28

2Defendants respectfully contend the appropriate course is to dismiss the case entirely in 1favor of a Texas forum, either for lack of jurisdiction, see note 1, supra, or in the interest of 2comity. Sterling Drug, Inc. v. Bayer A.G., 14 F.3d 733, 745 (2 nd Cir. 1994); see also Heathmount3A.E. Corp. v. Technodome.com, No. 01-1153 (4 th Cir. Feb. 2, 2001). 4

3The purposeful aiming of Plaintiff’s (and counsel’s) lawsuit and the instrumentalities of 1their tortious conduct at Texas constitute “purposeful availment” of Texas law. Bancroft 2& Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082, 1087-88 (9 th Cir. 2000) (“trademark 3owner’s” correspondence attempting to interfere with Domain Name registrant’s contractual 4relationship establishing ownership of Domain Name is the instrumentality of an intentional 5tort); Yahoo! Inc. v. LICRA, No. 00-21275-JF, __ F.Supp.2d __, 2001 WL 640418, at 4-5 6(N.D. Cal. June 7, 2001). Thus, Texas is the most prudent U.S. venue to resolve this dispute. 7


-4-

v. Toeppen, 947 F. Supp. 1227, 1231-32 (N.D. Ill. 1996); Shea v. Reno, 930 F.1

Supp. 916, 929 (S.D.N.Y. 1996), aff'd, 117 S. Ct. 2501 (1997). Search engines look2

for keywords in places such as domain names, actual text on the web page, and3

metatags. With this basic framework and understanding of the Internet behind us,4

we can better consider the issues before us in the present case. 5

Under Rules 12(b)(2), 12(b)(3) and 12(b)(6) of the Federal Rules of Civil6

Procedure, and under 28 U.S.C. §§ 1391 and 1404(a), Defendant moves for7

dismissal because of lack of personal jurisdiction,2 venue, and failure to state a8

claim. Alternatively, defendant seeks a venue transfer to the Western District of9

Texas3 under 28 U.S.C. §1404(a), so all claims and potential counterclaims may be10

resolved in one comprehensive lawsuit. Defendant respectfully declines to submit11

to any California jurisdiction through the filing of counterclaims. See, R.M.S.12

Titanic, Inc. v. Haver, 171 F. 3d 943 (4th Cir.), cert. denied, 528 U.S. 82 (1999). 13

STATEMENT OF THE CASE 14

During November 1989, Defendant, Leonard Adam Rosenthal, aka Chip15

Rosenthal, left a position with Dallas Semiconductor to start a consulting business. 16

At the time, he was unsure whether he wanted to focus his consulting business on17

UNIX systems or digital communication systems, so he decided to do both. In so18

doing, Mr. Rosenthal created the business name “Unicom Systems Development”. 19


-5-

See, Declaration of Leonard Adam Rosenthal and Exhibit 1 to the Declaration of1

Leonard Adam Rosenthal. (The Declaration will be referred to as the “Rosenthal2

Decl.” and Exhibits to it as “Rosenthal Decl. Exh. #.”)3

On December 5, 1989, Mr. Rosenthal, registered the assumed name “Unicom4

Systems Development” with the County Clerk of Dallas County, Texas. See,5

Rosenthal Decl. Exh. 1. An assumed name filing is required by Texas state law for6

anyone wishing to establish a commercial business presence. In early 1990, Mr.7

Rosenthal moved from Dallas, Texas, to Austin, Texas, and, in accordance with8

Texas state law, registered the assumed name “Unicom Systems Development” with9

the County Clerk of Travis County, Texas, on January 18, 1990. See, Rosenthal10

Decl. Exh. 2. Mr. Rosenthal has been using the name “Unicom Systems11

Development” in commerce substantially continuously ever since. 12

On February 16, 1990, Mr. Rosenthal, dba Unicom Systems Development,13

registered the domain name <unicom.com> with NIC.DDN.MIL, the domain name14

Registrar at the Network Information Center (NIC), which was then operated under15

contract to the United States government. See, Rosenthal Decl. 4 and Decl. Exh. 3.16

On February 26, 1990, Mr. Rosenthal received notification from the domain17

Registrar that his domain name was registered. See, Rosenthal Decl., at 3, and Decl.18

Exh. 4. He then sent an email to Baylor University notifying them of his UUNET19

(UNIX-to-UNIX Network) connection and impending domain name change. See,20

Rosenthal Decl. Exh. 5. Mr. Rosenthal immediately began using his domain name21

for email and later created his website at <www.unicom.com>. 22

On June 14, 1991, Mr. Rosenthal received notification from the Internet NIC23

that a Class C network address (192.108.105.0/24) had been assigned. See,24

Rosenthal Decl. Exh. 7. This numerical address was assigned so that Mr.25

Rosenthal could eventually connect to the Internet. Mr. Rosenthal has used the26

domain name <unicom.com> for email purposes continuously since 1990, and has27


-6-

maintained a web site using the <unicom.com> domain name continuously since1

1994. See, Rosenthal Decl., at 3.2

On March 17, 1997, seven years after Rosenthal registered the3

<unicom.com> domain name, a California company, Plaintiff Unicom Systems,4

Inc., registered the “<unicomsi.com>" domain name. (Domain name registration5

records are public records freely accessible to anyone on the Internet. A copy of the6

<unicomsi.com> registration is attached as Exhibit 6 to Defendant’s Request to7

Take Judicial Notice, hereinafter simply “RTJN”.) Plaintiff also registered the8

domain name <unicom.org> on January 10, 1999. See, RTJN Exh. 7.9

On June 19, 1997, Unicom Systems, Inc., filed three applications with the10

United States Patent and Trademark Office (hereinafter “USPTO”). Two of the11

three trademarks were claimed by Unicom Systems, Inc., to be for “computer12

software used to monitor and detect errors and problems in mainframe system13

software and automatically take corrective action or alert system personnel of14

mainframe computer systems.” 15

The first trademark claimed by Unicom Systems, Inc., is Serial Number16

75311438, is a stylized drawing of the word “UNICOM.” See, RTJN Exh. 3. The17

second, Serial Number 75311386, is a typed drawing of the words “UNICOM18

SYSTEMS,” although the mark registration file specifically states that “No claim is19

made to the exclusive use of “systems” apart from the mark as shown.” See, RTJN20

Exh. 4. The third, Serial Number 75311390, is a typed drawing of the word21

“UNICOM” that is registered as a good or service to be “used for computer22

software, namely mainframe system software products which monitor and report on23

system resources.” See, RTJN Exh. 5. 24

On or about October 21, 1998, Unicom Systems Inc., CEO Corry Hong sent25

an email to Defendant, Mr. Rosenthal, seeking to arbitrage Mr. Rosenthal’s domain26

name. See, Rosenthal Decl. ¶ 6 and Decl. Exh. 9. On or about October 23, 1998,27


-7-

Mr. Rosenthal sent a return email to Mr. Hong, declining the offer and indicating1

that he was not seriously interested in relinquishing his rights to the domain name.2

See, Rosenthal Decl. ¶ 6 and Decl. Exh. 10.3

On or about November 13, 1998, Corry Hong, again sent Mr. Rosenthal an4

email asking whether Mr. Rosenthal would be willing to arbitrage the domain name5

<unicom.com>. Mr. Rosenthal again declined to consider relinquishing his domain6

name rights. See, Rosenthal Decl. ¶ 7 and Decl. Exh. 12. 7

On or about September 23, 1999, Corry Hong again offered to buy Mr.8

Rosenthal's domain name, this time offering $4,000.00. On or about October 24,9

1999, Mr. Rosenthal replied to Mr. Hong’s email offer with a firm rejection of Mr.10

Hong’s overture. See, Rosenthal Decl. ¶ 8 and Decl. Exh. 15.11

On or about January 26, 2000, Unicom Systems Inc., CEO, Corry Hong, sent12

Mr. Rosenthal yet another email requesting arbitrage. On or about January 30,13

2000, Mr. Rosenthal responds to Mr. Hong’s email again rejecting Mr. Hong’s14

offer. See, Rosenthal Decl. ¶ 9 and Decl. Exh. 16.15

On or about December 14, 2000, Mr. Corry Hong, CEO of Unicom Systems16

Inc., sent a cease and desist letter to Mr. Rosenthal claiming that Mr. Rosenthal and17

Unicom Systems Development were infringing a Unicom Systems, Inc., trademark.18

See, Rosenthal Decl. Exh. 18. On or about December 18, 2000, Mr. Rosenthal19

forwarded the correspondence to his attorney. His attorney responded to Mr.20

Hong’s letter and directed that all future communication be made through her. See,21

Rosenthal Exh. 19. Nothing further was said, emailed, or communicated by any22

party until Mr. Rosenthal received Service of Process in the present action at his23

home in Austin, Texas, on or about December 12, 2001, a year after the cease and24

desist letter and more than two years after Mr. Hong first tried to buy the25

<unicom.com> domain name from Mr. Rosenthal.26

ARGUMENT 27

This case boils down to whether a little known corporation, which obtained a28


-8-

federal trademark registration long after Defendant began using his domain name,1

can leverage the trademark by forcing Defendant to give up his domain name2

without regard to the facts or the law. By bringing this instant litigation, Unicom3

Systems, Inc., seeks to use intimidation tactics to coerce the involuntary transfer of4

the internet address <unicom.com>, from its rightful holder, Mr. Rosenthal dba5

Unicom System Development, even though the company knows the lawsuit is6

baseless and exists solely for coercive leverage. 7

The Declaration of Leonard Adam Rosenthal, which accompanies this Motion8

and Memorandum (see, Rosenthal Decl.) specifically lays out the facts relating to9

the registration and use of the Internet Domain Name <unicom.com >, and makes it10

abundantly clear why Unicom Systems, Inc., and their lawyers know they must lose11

in this Court:12

(1) The Defendant has not “purposefully availed” himself of California13

jurisdiction such that he would anticipate being hauled into Court in14

California, and as such should not be subject to either to general or specific15

personal jurisdiction in California; 16

(2) Ever since February 26, 1990, when the Domain Name <unicom.com> was17

first registered, allowing the Defendant, Mr. Rosenthal dba Unicom Systems18

Development, access to the growing steam of interstate commerce known as19

the internet, the Defendant has not used his domain name to violate the law;20

(3) The Defendant has invested his business efforts in the reasonable,21

investment-backed expectation that the Congressionally-sanctioned and22

legally protected activity of domain name use remains lawful. 23

Indeed, the Plaintiff and the Defendant are hardly the only businesses with an24

Internet presence that uses “unicom” as part of their business or domain names. In25

1997, when he had not even heard of Plaintiff, Rosenthal presciently put together a26

non-exhaustive list of such companies (Rosenthal Decl. Exh.20), and a simple27

search of the term “unicom” on a popular web search engine, such as Google,28

4 Indeed the Complaint notes that Mr. Rosenthal never solicited or entertained the sale of the1Domain Name, despite the misleading references to a specific monetary figure, which, Plaintiff’s counsel2admitted during a Conference with Defense counsel, was not actually mentioned. Rather, Plaintiff3approached Defendant, in Texas, attempting solicit the Domain Name from Defendant, and Plaintiff’s4solicitations were rejected on every occasion. See, Rosenthal Decl.5


-9-

<www.google.com> shows many, many more. See also, RTJN Exh. 1 and 2.1

Plaintiff would portray Defendant as a “cybersquatter”, but Defendant has – at2

all times since the early-1990s – specifically rejected the kind of activity typified by3

the arbitrage scheme of Dennis Toeppen. See, Panavision v. Toeppen, 141 F.3d4

1316, 1325 (9th Cir. 1998). Mr. Rosenthal, unlike the defendant in Panavision v.5

Toeppen, has not initiated any arbitrage of the domain name address in question.4 6

Instead, Mr. Rosenthal has put the address to legitimate use at all times since the7

domain name was registered in February 1990. In the context of Panavision v.8

Toeppen, there is absolutely nothing analogous about Mr. Rosenthal’s conduct or9

actions. It is undisputed that Unicom Systems Inc.’s repeated sale and arbitrage10

overtures have been rejected by Mr. Rosenthal because the Domain Name11

<unicom.com> is not for sale.12

I. Plaintiff’s Attempt To Assert Personal Jurisdiction Without (1) Minimum13

Contacts or (2) Fair Play And Substantial Justice, Violates Due Process. 14

The Due Process Clauses of the Constitution prohibit U.S. Courts from exercising15

jurisdiction in the absence of the combined requirements of both (1) minimum16

contacts and (2) fair play and substantial justice. Asahi Metal Indus. Co. v. Superior17

Ct. Of Cal., 480 U.S. 102 (1987); Shaffer v. Heitner, 433 U.S. 186, 207, 212 (1977);18

International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The traditional19

Due Process analytic framework recognizes two kinds of jurisdiction – specific and20

general. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-1521

& nn.8-9 (1984); Cybersell, Inc v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir. 1997). 22

When a nonresident defendant raises a challenge to personal jurisdiction, the23

plaintiff bears the burden of showing that jurisdiction is proper. Yahoo! Inc. v.24


-10-

LICRA, __ F.Supp.2d __, 2001 WL 640418, at 3 (N.D. Cal. June 7, 2001).1

Decades ago, the U.S. Supreme Court recognized that “[a]s technological2

progress has increased the flow of commerce between States, the need for3

jurisdiction over nonresidents has undergone a similar increase.” Hanson v.4

Denckla, 357 U.S. 235, 250-51 (1958). Even this prescient observation could5

scarcely contemplate the advent of cyberspace functionalities. Jurisdictional6

principles are inherently rooted in notions of territoriality; the Internet, by contrast,7

transcends geographic boundaries. Issues therefore have arisen as to the appropriate8

analytical constructs applicable to on-line communications. 9

We must begin the analysis with the uncontroversial proposition that the10

plaintiff alone bears the burden of proof on the subject of personal jurisdiction. Doe11

v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001); American Tel. & Tel. Co. v.12

Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996). 13

General Jurisdiction: In the United States, due process principles limit the14

exercise of jurisdiction and protect individuals from binding judgments of a forum15

with which they did not establish meaningful contacts, ties, or relations. In the most16

general terms, this means that the maintenance of a law suit in a given forum must17

not offend “traditional notions of fair play and substantial justice.” International18

Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citing Milliken v. Meyer, 31119

U.S. 457, 463 (1940)). Consonant with this principle, personal jurisdiction may be20

exercised over foreign persons and entities via either general or specific jurisdiction.21

Concerning general jurisdiction, the analysis in the recent Bancroft & Masters22

decision by the Ninth Circuit is squarely on-point: “The standard for establishing23

general jurisdiction is ‘fairly high,’ and requires that the defendant's contacts be of24

the sort that approximate physical presence.” Bancroft & Masters, Inc., 223 F.3d at25

1086 (citations omitted). General jurisdiction may be invoked if the non-resident26

defendant is either present in the forum or maintains sufficient continuous and27

systematic contacts with the state. Occasional contacts with California simply are28

5 The prevailing trend, following the GTE New Media case, has been to reject the Zippo Mfg.1Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) “sliding scale” analysis of 2jurisdiction in favor of a more traditional approach. See Note, Recent Case: Civil Procedure – 3D.C. Circuit Rejects Sliding Scale Approach to Finding Personal Jurisdiction Based on Internet 4Contacts – GTE New Media Services Inc. v. Bellsouth Corp., 113 HARV. L.R. 1128 (2000). The Ninth5Circuit has not specifically taken a position one way or the other on the Zippo “sliding scale.” However,6whichever line of authority is followed, in this case specific jurisdiction clearly is not present. E.g.,7Bensusan Restaurant Corp. v. King, 126 F.3d 25 (2 nd Cir. 1997); Mink v. AAAA Development LLC,8190 F.3d 333 (5 th Cir. 1999); Soma Medical Intern. v. Standard Chtd. Bank, 196 F.3d 1292 (10 th9

(continued...) Memorandum of Law In Support of Defendant’s Rule 12(b) Dismissal or Transfer Motion, Unicom v. Rosenthal,CV-01-09386-GHK(SHx)

-11-

not enough. Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986) and1

cases cited therein. As set forth in his Declaration, the contacts which Rosenthal has2

had with California since 1990 are considerably less than in those cases where no3

general jurisdiction was found.4

Specific Jurisdiction: Likewise, the Defendant is not subject to “specific5

jurisdiction” in California. Specific jurisdiction arises when an out-of-state6

defendant who has not consented to suit in the forum has purposefully directed his7

activities toward the forum state, from which the litigation arises or to which it8

relates. The pivotal inquiry probes whether the defendant purposefully established9

minimum contacts with the forum state such that he should reasonably anticipate10

being brought into its court. 11

In Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir.1997), a Florida12

company that offered commercial services via a passive web page allegedly13

infringed on the trademark of an Arizona company that used the same name.14

Applying the "minimum contacts" requirements, the Ninth Circuit affirmed the15

Arizona District Court, holding that “it would not comport with 'traditional notions16

of fair play and substantial justice' for Arizona to exercise personal jurisdiction over17

an allegedly infringing Florida web site advertiser who has no contacts with Arizona18

other than maintaining a home page that is accessible to Arizonans, and everyone19

else, over the Internet.” Cybersell, 130 F.3d at 416-17. As recognized by many20

Courts throughout the United States,5 mere visibility from California of web sites21

5(...continued)Cir.1999); Hornell Brewing Co. v. Rosebud Sioux Tribal Court, 133 F.3d 1087 (8 th Cir. 1998);1Heathmount A.E. Corp v. Technodome.Com, 106 F. Supp. 860 (E.D.Va. 2000), certified for2interlocutory appeal, No. 01-1153 (4 th Cir. Feb. 2, 2001); Winfield Collection, Ltd. v. McCauley, 105 F.3Supp. 2d 746 (E.D. Mich. 2000); Perry v. RightOn.com, 90 F. Supp. 2d 1138 (D. Or. 2000); Neogen4Corp. v. Neo Gen Screening, Inc., 109 F. Supp. 2d 724 (W.D. Mich. 2000); Millennium Enters., Inc. v.5Millennium Music, LP, 33 F. Supp. 2d 907, 910- 24 (D. Or. 1999); Barrett v. Catacombs Press, 44 F.6Supp. 2d 717 (E.D. Pa. 1999).7

6 For example, what if a California-licensed lawyer, who practices only in California, 1publishes a Website? If the Website is visible in Texas (as all Websites are), is the California 2lawyer required to abide by the regulations of the State bar of Texas, as well as the regulations of 3the California Bar. E.g., Texans Against Censorship v. State Bar of Tex., 888 F. Supp. 1328, 41370 (E.D. Tex. 1995), aff'd, 100 F.3d 953 (5th Cir. 1996)5


-12-

that are published on a “server” computer in Texas cannot possibly serve as a valid1

basis for the exercise of personal jurisdiction.6 GTE New Media Servs., 199 F.3d at2

1349-50; Cybersell, 130 F.3d 414. 3

At 223 F.3d 1086, Bancroft & Masters states the three-part test for specific4

jurisdiction:5

This “specific" jurisdiction exists if (1) the defendant has performed6

some act or consummated some transaction within the forum or7

otherwise purposefully availed himself of the privileges of conducting8

activities in the forum, (2) the claim arises out of or results from the9

defendant’s forum-related activities, and (3) the exercise of jurisdiction10

is reasonable.11

Plaintiff cannot demonstrate that Rosenthal meets any of these criteria and his12

Declaration shows that he does not meet them.13

Bancroft & Masters is particularly instructive with respect to the so-called14

“effects” test of Calder v. Jones, 465 U.S. 783 (1984), which so many Plaintiffs15

attempt to stretch well beyond what was intended. The “express aiming” in Calder16

encompasses wrongful conduct individually targeting a known forum resident. 22317

F.3d at 1087. There can be no individual targeting where the defendant did not even18

know of the plaintiff’s existence, let alone specifically and deliberately target the19


-13-

plaintiff. Id. at 1088, citing Cybersell, 130 F. 3d at 420. Here, from 1990 to at least1

1997, Rosenthal had no knowledge of Plaintiff’s existence (Rosenthal Decl. ¶ 6), and2

there can be no evidence that he changed his conduct in any manner after becoming3

aware of Plaintiff, let alone that he targeted anything directly at Plaintiff.4

Here, Defendant is subject to neither “specific jurisdiction” nor “general5

jurisdiction.” The Plaintiff’s Complaint has utterly failed to prove proper6

jurisdiction over the Defendant, Mr. Rosenthal.7

II. Venue Should Be Transferred to the Western District Of Texas. 8

Although this lawsuit does not belong in any U.S. District Court, the most9

appropriate jurisdiction for resolving the lawsuit is in the U.S. District Court for the10

Western District of Texas, Austin Division, in Austin, Texas. 28 U.S.C. § 1404(a),11

governing transfer of Venue, states that “For the convenience of parties and12

witnesses, in the interest of justice, a district court may transfer any civil action to13

any other district or division where it might have been brought.” For purposes of14

venue, this case clearly “could have been brought” in the Western District of Texas. 15

See, 28 U.S.C. §1391(d). Moreover, for purposes of jurisdiction and venue,16

Leonard Adam Rosenthal, aka Chip Rosenthal, dba Unicom Systems Development,17

can be “found” only in the Western District of Texas.18

Neither the registration nor use of the domain name in question took place19

within or in connection with the state of California in any manner whatsoever. See,20

GTE New Media Servs., 199 F.3d at 1349-50. Clearly, the domain name21

<unicom.com> – existing as it does on the internet – is not “located” in California. 22

In direct contrast, the Plaintiffs and Plaintiffs’ lawyers intentionally directed the23

instrumentality of their tortuous activity directly at the Western District of Texas by24

deliberately and by choice addressing their tortuous instrumentalities to Austin,25

Texas. See, Bancroft & Masters, Inc., 223 F.3d at 1087-88. 26

III. Plaintiff’s Complaint Fails To State A Claim. 27

To survive a motion to dismiss under FED. R. CIV. P. 12(b)(6), a Complaint28


-14-

must contain either direct or inferential allegations respecting all the material1

elements to sustain a recovery under some viable legal theory. The Court is not2

required to accept as true allegations that are merely conclusory, unwarranted3

deductions of fact, or unreasonable inferences. Clegg v. Cult Awareness Network, 184

F.3d 752, 754-55 (9th Cir. 1994). Similarly, the Plaintiff in this case is not permitted5

to rely on the Complaint, which never constitutes evidence and clearly is6

controverted by affidavit testimony and supporting documentation. McNutt v.7

General Motors Acceptance Corp., 298 U.S. 178, 184 (1936) (,J.); Taylor v. Portland8

Paramount Corp., 383 F.2d 634, 639 (9th Cir. 1967) (“facts, not mere allegations,9

must be the touchstone”). 10

The Ninth Circuit has “held that a plaintiff can” – as Unicom Systems, Inc. has11

done here – “plead himself out of a claim by including unnecessary details contrary12

to his claims.” Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295-96 (9th Cir.13

1998); Roth v. Garcia Marquez, 942 F.2d 617, 625 n.1 (9th Cir. 1991) (citing14

Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987)). Further, “[t]he15

Court need not accept as true allegations that contradict facts that may be judicially16

noticed by the court. See, Mullis v. United States Bankruptcy Court, 828 F.2d 1385,17

1388 (9th Cir. 1987); Branch v. Tunnell, 14 F.3d 449, 453-54 (9th Cir.1994); and18

Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). 19

A. Plaintiff’s “Cyberpiracy” Claim Fails Because The Domain 20

Name Registration Is For A Lawful Use, Not For Sale. 21

The Anticybersquatting Consumer Protection Act (hereinafter “ACPA”) was22

signed into law on November 29, 1999, and codified at 15 U.S.C. §§1125(d). The23

ACPA is designed to "protect consumers and promote electronic commerce by24

amending certain trademark infringement, dilution, and counterfeiting laws," creating25

a new cause of action for trademark owners against cybersquatters. The ACPA26

provides remedies against anyone who, with a bad faith intent to profit, registers,27

traffics or uses a domain name that: (1) is identical or confusingly similar to a mark28


-15-

that was distinctive when the domain name was registered; (2) is identical,1

confusingly similar, or dilutive of a mark that was famous when the domain name2

was registered; or (3) infringes marks and names protected by statute such as the3

Olympic symbol or Red Cross. 4

To be liable under the ACPA for infringing a trademark, the trademark must5

have been distinctive at the time of registration of the domain name. See, 156

U.S.C. §§1125(d)(1)(A)(ii). See also, 37 CFR Part 2-§2.41, and 15 U.S.C. §1052(f)7

(requiring five year term of use for distinctiveness prior to filing of USPTO8

application). In this case, the Plaintiff, by its own admission in the Complaint,9

recognizes that Defendant, Mr. Rosenthal, registered his domain name more than10

seven years prior to the time the Plaintiff filed its federal trademark application. 11

Moreover, Mr. Rosenthal had registered and was using the domain name12

<unicom.com> in interstate commerce more than four years prior to the first possible13

distinctive recognition of Plaintiff’s marks by the USPTO. Id. See also, Lockheed14

Martin Corp. v. Network Solutions, Inc., 985 F.Supp. 949 (C.D. Cal. 1997), (holding15

that the defendant did not "use" the plaintiff’’s trademark, as required for direct-16

infringer liability, by merely registering the mark as a domain name.)17

Because the actual pre-existence of a trademark constitutes an essential element18

of any claim under 15 U.S.C. § 1125(d)(1) (“cybersquatting”) or 15 U.S.C. § 1125(c)19

(“trademark dilution”) and corresponding state-law theories, Unicom System Inc.’s20

lawyers have failed as a matter of law to state a claim on these counts. Since it is21

impossible to support an essential element of each such count, dismissal is required22

under Rule 12(b)(6). 23

B. Plaintiff’s Trademark Dilution and Infringement Claims Are Equally Faulty. 24

Plaintiff simply has no factual or legal basis whatsoever to suggest that any25

trademark of theirs has ever been infringed or diluted. Non-infringement and non-26

dilution should be found as a matter of law. Moreover, Plaintiff should be barred27


-16-

from asserting any such claims under both federal and state laches doctrines. 1

“A trademark is a designation, ‘a word, name, symbol, or device, or any2

combination thereof,’ which serves ‘to identify and distinguish [the] goods [of the3

mark's owner] . . . from those manufactured or sold by others and to indicate the4

source of the goods, even if that source is unknown.” Rock and Roll Hall of Fame5

and Museum, Inc. v. Gentile Prods., 134 F.3d 749, 753 (6th Cir.1998) (quoting 156

U.S.C. § 1127). “[T]he purpose of trademark has ‘remained constant and limited:7

Identification of the manufacturer or sponsor of a good or the provider of a service.’”8

Mattel, Inc. v. MCA Records, Inc., 28 F. Supp. 2d 1120, 1141 (C.D. Cal. 1998)9

(quoting New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 305 (9th10

Cir. 1992)). 11

“There is no such thing as property in a trademark except as a right12

appurtenant to an established business or trade in connection with which the mark is13

employed.” Rock and Roll Hall of Fame, 134 F.3d at 753 (citing United Drug Co. v.14

Theodore Rectanus Co., 248 U.S. 90, 97 (1918); accord Parks v. LaFace Records,15

Inc., 76 F. Supp. 2d 775, 784 n.9 (E.D. Mi. 1999). In short, neither Unicom Systems,16

Inc., nor any other company is automatically entitled to demand possession of the17

name-identical “.com” domain name if somebody else registers it first. See, Hasbro18

Inc. v. Clue Computing, 66 F. Supp. 2d 117, 133 (D. Mass. 1999) (emphasis added),19

aff’d, 232 F.3d 1 (1st Cir. 2000). 20

(I). Federal Law Dilution Analysis21

The Federal Trademark Dilution Act (FTDA), codified as 15 U.S.C.22

§1125(c)(1), allows a famous mark’s owner to secure an injunction against another23

party’s “commercial use in commerce” of the mark “if such use begins after the mark24

has become famous and causes dilution of the distinctive quality of the mark.” Id. A25

plain reading of the statute speaks of a party’s right to injunctive relief against26

another’s “commercial use in commerce of a mark or trade name , if such use begins27

after the mark has become famous.” [Emphasis added.] Id. 28


-17-

Under the ordinary rules of statutory construction, the term “use in commerce”1

is defined in the Lanham Act as “the bona fide” use of a mark in the ordinary course2

of trade, and not made merely to reserve the right in a mark.” A mark, in turn, “shall3

be deemed in use in commerce...on services when it is displayed in the sale or4

advertising or services and the services are rendered in commerce....” 15 U.S.C.5

§1127. It is undisputed that Mr. Rosenthal has been using the mark <unicom.com>6

in commerce at least as early as 1990.7

The plain reading of the statute is that it looks to the mark's fame at the time of8

the mark's first commercial use by the other party, not to some arbitrary point in9

time, perhaps much later, when the mark owner objects to the use. If the later10

formulation were the rule, the requirement that infringing use begin after the mark11

becomes famous would be stripped of all meaning. Owners of famous marks would12

have the authority to decide when an allegedly infringing diluting use was13

objectionable, regardless of when the party accused of diluting first began to use the14

mark. Plaintiff Unicom Systems, Inc., has not set forth any evidence of the15

famousness of its mark as of 1990.16

Also relevant to Unicom Systems Inc.’s dilution claim is the fact that it did not17

complain about Mr. Rosenthal’s registration of the <unicom.com> domain name for18

over ten years, indicating that it did not sense a threat of dilution from Mr.19

Rosenthal’s use of the domain until relatively recently. Regardless of when Unicom20

Systems, Inc., discovered that Mr. Rosenthal had registered the domain name, it21

clearly should have been aware of the existence of email and the Internet, of the22

practice of registering domain names, and of the likelihood that an existing23

organization with the same or a similar name would seek the most obvious domain24

name for its website - just as Unicom Systems, Inc., now wishes it had done. The25

length of time of concurrent usage of <unicom> before Plaintiff Unicom Systems,26

Inc., complained indicates that Mr. Rosenthal’s activity did not seriously dilute the27

value of Unicom Systems Inc.’s trademark. See, Accuride Int’l, Inc. v. Accuride28

7 The relevant California provision holds as follows:1Likelihood of injury to business reputation or of dilution of the distinctive quality2of a mark registered under this chapter, or a mark valid at common law, or a trade3name valid at common law, shall be a ground for injunctive relief notwithstanding4the absence of competition between the parties or the absence of confusion as to5the source of goods or services.6

Cal. Bus. & Prof. Code § 14330.7 Memorandum of Law In Support of Defendant’s Rule 12(b) Dismissal or Transfer Motion, Unicom v. Rosenthal,CV-01-09386-GHK(SHx)

-18-

Corp., 871 F.2d 1531, 1539 (9th Cir. 1989).1

Further, the possibility that the registration of a famous mark as a domain2

name is a per se dilution has been considered. See e.g., Avery Dennison Corp. v.3

Sumpton, 999 F. Supp. 1337, 1340-41 (C.D. Cal. 1998). Hasbro rejected this4

argument with regard to a legitimate competing use. "If another Internet user has an5

innocent and legitimate reason for using the famous mark as a domain name and is6

the first to register it, that user should be able to use the domain name, provided it7

has not otherwise infringed upon or diluted the trademark." Hasbro, 66 F. Supp. 2d8

at 133. 9

Plaintiff Unicom Systems, Inc., has not shown that its mark was famous in10

1990. Furthermore, it did not allege that Mr. Rosenthal’s use of his domain name11

diluted Plaintiff’s mark for a decade after Mr. Rosenthal first registered the domain. 12

For these reasons the Court should find that Plaintiff has failed to state a claim under13

the Federal Trademark Dilution Act (FTDA).14

(II). State Law Dilution Analysis15

Dilution under state law is subject to essentially the same analysis under the16

FTDA.7 See, Panavision Int’l v. Toeppen, 141 F.3d 1316, 1324 (9th Cir. 1998)17

(“Panavision’s state law dilution claim is subject to the same analysis as its federal18

claim.”). The Ninth Circuit has held that Cal. Bus. & Prof. Code § 14330 only19

applies to famous marks, and that the allegedly diluting use must occur after the20

mark has become famous for the statute to apply. See, Avery Dennison Corp. v.21

Sumpton, 198 F.3d 868, 874-75 & n. 4 (9th Cir. 1999). Accordingly, the same22

8 The Sleekcraft factors are as follows: strength of the allegedly infringing mark,1proximity of the goods, similarity of the marks, evidence of actual confusion, marketing channels2used, type of goods and degree of care likely to be exercised by purchasers, the intent of the3alleged infringer in selecting the mark, and the likelihood of the expansion of the product lines of4both parties. See, Sleekcraft, 599 F.2d. at 348-49.5


-19-

reasoning applies under both California state law and the FTDA, and the same1

outcome must result.2

(III.) Infringement under the Lanham Act3

Factors to be considered in trademark infringement litigation are the similarity4

of the marks and consumer confusion. The similarity of marks alone, does not5

necessarily lead to consumer confusion even though related goods may be more6

likely than unrelated goods to confuse the public as to the producers of the goods. 7

See, Official Airline Guides v. Goss, 6 F.3d 1385, 1392 (9th Cir. 1993) (citing AMF8

v. Sleekcraft Boats, 599 F.2d 341, 350 (9th Cir. 1979)). 9

The Lanham Act provides the owner of a valid protectable trademark from an10

infringing use of the mark that creates a likelihood of confusion. See, 15 U.S.C.11

§1114, 1125(a)(1). Traditionally, likelihood of confusion analysis involves12

application of the eight-factor test enunciated in AMF Inc. v. Sleekcraft Boats, 59913

F.2d 341, 348-349 (9th Cir. 1979).8 As noted in Bally Total Fitness Holding Corp., v.14

Faber, 29 F. Supp.2d 1161 (C.D. Cal. 1998), however, the Sleekcraft test applies15

only to related goods, which are those goods or services “which would reasonably be16

thought by the buying public to come from the same source, or thought to be17

affiliated with , or sponsored by the trademark owner.” Bally, 29 F.Supp.2d at 1163. 18

In the present action the plaintiff claims that their goods and services are19

“computer software used to monitor and detect errors and problems in mainframe20

system software and automatically take corrective action or alert system personnel of21

mainframe computer systems” and are also “used for computer software, namely22


-20-

mainframe system software products which monitor and report on system resources.”1

(See, RTJN Exh. 4, 5, and 6). Additionally, Plaintiff claims to sell its goods to a2

mainframe computer market.3

On the other hand, Defendant Unicom Systems Development, sells Mr.4

Rosenthal’s technology consulting services to a completely different, non-5

overlapping market - the small business and Internet services market. Mr.6

Rosenthal’s services relate to the design and engineering of networks and systems7

utilizing open-source software, such as Linux and BSD. The sorts of computer8

systems with which he works are mainly personal computers and small-to-mid Sun9

Microsystems servers, but not mainframes.10

Additionally, Plaintiff’s and Defendant’s products are entirely incompatible11

and are not physically capable of being utilized in each others market place. 12

Mainframe computer applications will not run on personal computers and vice-versa. 13

Although Plaintiff and Defendant both participate in the very generic computer-14

related arena, they are on polar opposite sides of the marketplace. See, e.g., Toys15

"R" Us, Inc. v. Feinberg, 26 F. Supp. 2d 639, 643 (S.D.N.Y. 1998) (no likelihood of16

confusion between "gunsrus.com" firearms web site and "Toys `R' Us" trademark);17

Interstellar Starship Services, Ltd. v. EPIX, Inc., 983 F. Supp. 1331, 1336 (D.Or.18

1997)(finding no likelihood of confusion between use of "epix.com" to advertise the19

Rocky Horror Picture Show and "Epix" trademark registered for use with computer20

circuit boards).21

The fact that both Plaintiff and Defendant herein use the Internet as an22

advertising mechanism does not render the services related. As the Bally Court23

noted, “The Internet is a communications medium. It is not itself a product or24

service.” Bally, 29 F.Supp.2d at 1163. “Thousands of Internet users every day take25

a stab at what they think is the most likely domain name for a particular website.26


-21-

Given the limited number of letters in the alphabet, and the tendency toward the use1

of abbreviations in commerce generally and in domain names in particular, it is2

inevitable that consumers will often guess wrong. But the fact that afficionados of3

The Nashville Network may initially type 'tnn.com' into their browsers in the hope of4

locating Grand Ole Opry programming information does not, standing alone,5

demonstrate confusion.” The Network Network v. CBS Inc., 54 U.S.P.Q.2d 1150,6

1155 (C.D. Cal. 2000). 7

The similarity of the marks will always be an important factor. Where the two8

marks are entirely dissimilar, there is no likelihood of confusion. "Pepsi" does not9

infringe Coca-Cola's "Coke." Nothing further need be said. Even where there is10

precise identity of a complainant's and an alleged infringer's mark, there may be no11

consumer confusion -- and thus no trademark infringement -- if the alleged infringer12

is in a different geographic area or in a wholly different industry. See, Weiner King,13

Inc. v. Wiener King Corp., 615 F.2d 512, 515-16, 521-22 (C.C.P.A. 1980)14

(permitting concurrent use of "Weiner King" as a mark for restaurants featuring hot15

dogs in New Jersey and "Wiener King" as a mark for restaurants in North Carolina);16

Pinocchio's Pizza Inc. v. Sandra Inc., 11 U.S.P.Q.2d 1227, 1228 (T.T.A.B. 1989)17

(permitting concurrent use of "PINOCCHIO'S" as a service mark for restaurants in18

Maryland and "PINOCCHIOS" as a service mark for restaurants elsewhere in the19

country). In analyzing this factor, "[t]he marks must be considered in their entirety20

and as they appear in the marketplace," Official Airline Guides, 6 F.3d at 139221

(citing Nutri/System, Inc. v. Con-Stan Indus., Inc., 809 F.2d 601, 605-06 (9th Cir.22

1987)), with similarities weighed more heavily than differences. See, Id. (citing23

Rodeo Collection Ltd. v. West Seventh, 812 F.2d 1215, 1219 (9th Cir. 1987)). 24

The test of actual confusion is not whether anyone could possibly be confused,25

but whether the “reasonably prudent consumer” is likely to be confused. Brookfield26

Communications v. West Coast Entertainment Corp., 174 F.3d 1036, 1060 (9th Cir.27


-22-

1999); Dreamworks Production Group, Inc., v. SKG Studio, 142, F.3d 1127, 11291

(9th Cir. 1998); Sleekcraft, 599 F.2d at 353. A reasonably prudent consumer in the2

computer services or product market will know and understand the difference3

between a massive room-sized mainframe computer and a personal desktop4

computer and the different products and services available for each.5

Moreover, a trademark violation based upon initial interest confusion involves6

the junior user capitalizing on the senior user's goodwill. The senior user's7

customers, at least tangentially in the market for the junior user's services,8

accidentally access the infringing site while in search of information on the senior9

user's products. Thus, relatedness of products is an important component in the10

analysis, even if the products need not be closely related. 11

However, that is not the case at hand. In the instant case, Mr. Rosenthal is the12

Senior user of the domain name <unicom.com>. Mr. Rosenthal lawfully registered13

his domain name in 1990. Moreover, Plaintiff Unicom Systems, Inc., has not shown14

and likely cannot show that its mark was famous in 1990. Furthermore, Plaintiff did15

not question Mr. Rosenthal’s use of the domain name <unicom.com> for more than a16

decade after Mr. Rosenthal first registered the domain. 17

Defendant respectfully opposes Unicom System Inc.’s efforts to apply state18

law and federal law retroactively to a domain name that has been has been operating19

in interstate commerce since 1990. For these reasons the Court should find that20

Plaintiff has failed to state a claim under the Lanham Act. The issue of retroactivity21

also requires dismissal under Rule 12(b)(6). 22

(IV). State Law Infringement Analysis23

Plaintiff also seeks an injunction based on Trade Name Infringement, Cal.24

Bus. & Prof. Code § 14415. Analysis under this code is “substantially congruent to a25

trademark infringement claim under the Lanham Act.” Academy of Motion Pictures26

Arts and Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1457 (9th Cir.27


-23-

1991) (internal quotations omitted.) Accordingly, the same reasoning applies under1

both California state law and the Lanham Act, and the same outcome must result.2

(V). False Designation of Origin Claims under 15 U.S.C. §1125(a)3

Plaintiff bases this claim on Lanham Act 43(a), which outlaws any use of a4

mark that is “likely to cause confusion, or to cause mistake, or to deceive as to the5

affiliation, connection, or association” of the good with the owner of the mark. 6

Section 43(a) of the Lanham Act protects certain unregistered marks when a person7

"uses in commerce any word, term, name, symbol, or device, or any combination8

thereof, or any false designation of origin, false or misleading description of fact, or9

false or misleading representation of fact, which ... is likely to cause confusion." 1510

U.S.C. §§ 1125(a)(1)(A). 11

To prevail on a trademark infringement claim under 15 U.S.C. §1125, a12

plaintiff must both demonstrate "(1) that it has a valid and protectable [mark] and (2)13

that the defendant's use of the mark in question creates a likelihood of consumer14

confusion." Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d15

922, 930 (4th Cir. 1995). To prevail on its 43(a) Lanham Act claim, plaintiff must16

further prove: “(1) that defendant uses a false designation of origin, as defined in17

the Act; (2) that such use of a false designation occurs in interstate commerce in18

connection with goods and services; (3) that such designation is likely to confuse,19

mistake or [cause] deception, and (4) the plaintiff has been or is likely to be20

damaged." 21

Plaintiff simply cannot meet the prima facie elements of its False Designation22

of Origin claim under 15 U.S.C. §1125(a). Defendant Mr. Rosenthal properly and23

lawfully registered a business assumed name designation in the State of Texas as24

early as 1989. See, Rosenthal Decl. and Decl. Exh. 1 and 2. Mr. Rosenthal also25

properly and lawfully registered his domain name <unicom.com> with an authorized26

Registrar in 1990. Mr. Rosenthal has not attempted to sell cheap imitations of27


-24-

Plaintiff’s products or services, nor has he sought to deceive the public as to the1

nature or origin of his services. Rather, he is engaged in a technical consulting2

services business that serves the personal computer market, a market that is entirely3

distinct from the mainframe computer market of Plaintiff Unicom Systems, Inc., and4

a market that Plaintiff Unicom Systems, inc., is not engaged in and does not serve. 5

See, RTJN Exh. 3,4, and 5.6

Moreover, Plaintiff Unicom Systems, Inc., has not shown and cannot show7

that its mark was famous in 1990. Furthermore, Plaintiff did not question Mr.8

Rosenthal’s use of the domain name <unicom.com> for more than a decade after Mr.9

Rosenthal first registered the domain. For these reasons the Court should find that10

Plaintiff has failed to state a claim under 15 U.S.C. §1125(a).11

(VI). Unfair Competition and Cal. Bus. & Prof. Code §1720012

Plaintiff also seeks an injunction based on California’s Unfair Competition13

Act, Cal. Bus. & Prof. Code §§ 17200 et seq. Analysis under this code is14

“substantially congruent to a trademark infringement claim under the Lanham Act.” 15

Academy of Motion Pictures Arts and Sciences v. Creative House Promotions, Inc.,16

944 F.2d 1446, 1457 (9th Cir. 1991) (internal quotations omitted.) Accordingly, the17

same reasoning applies under both California state law and the Lanham Act, and the18

same outcome must result.19

Moreover, Plaintiff Unicom Systems, Inc., has not shown and cannot show20

that its mark was famous in 1990. Furthermore, Plaintiff did not question Mr.21

Rosenthal’s use of the domain name <unicom.com> for more than a decade after Mr.22

Rosenthal first registered the domain. For these reasons the Court should find that23

Plaintiff has failed to state a claim under Cal. Bus. & Prof. Code §§ 17200 et seq.24

Alternatively, as to all of Plaintiff's state law claims, if the Court should dismiss25

the federal claims, Plaintiff is left only with the possibility of diversity jurisdiction,26

which it has not pleaded, and in the absence of viable federal claims, the state law27


-25-

claims should be dismissed. See, Acri v. Varian Assoc., 114 F.3d 999, 1000 (9th Cir.1

1997).2

C. “Bad Faith Intent” Is Not Present As a Matter of Law. 3

Finally, returning to the ACPA, Congress has recognized an important4

defense, to make sure that domain name registrants have fair notice about what does5

or does not constitute “bad faith intent.” Therefore, if the registrant or user “believed6

and had reasonable grounds to believe that the use of the domain name was a fair use7

or otherwise lawful,” then the Court “shall not [find]” bad faith intent. 15 U.S.C. §8

1125(d)(1)(a)(ii). This “good faith” defense is directly analogous to the “good9

faith” qualified immunity defense of public officers. Moreover, Plaintiff has not met10

Plaintiff’s pleading requirement. See, Harlow v. Fitzgerald, 457 U.S. 800, 818-2011

(1982); Anderson v. Creighton, 483 U.S. 635, 640-41 (1987).12

CONCLUSION 13

Defendant respectfully prays for dismissal of this civil action, or alternatively14

that venue be transferred. 15

Respectfully submitted,January 2, 2002

_______________________________JAMES S. TYRE, State Bar Number 083117 LAW OFFICES OF JAMES S. TYRE

_______________________________CHERIE M. CHAPPELL (Pro Hac Vice Admission Pending)A Member of CHAPPELL LAW FIRM, P.L.L.C.

Attorneys for Defendant

james s. tyre, state bar number 083117 law offices of...

Documents