Bald-Faced Revenge and Bad Faith

Robert Godbey

Michael Kremer used the hair restoration services of the Bosley Medical Institute. He wasn't happy with the results. He filed a medical malpractice action, which was unsuccessful, then took matters into his own hands: he started a Web site at www.BosleyMedical.com that was highly critical of the institute. Bosley then brought suit, alleging infringement of its registered trademark and "cybersquatting" - registering a domain name with the bad-faith intent to profit from the use of someone else's trademark.

Kremer earned no revenues from the Web site, and no goods or services were sold on the site. So the Ninth Circuit affirmed the trial court's finding that Kremer's use of the trademark "Bosley Medical" in his domain name and on his Web site was a noncommercial use and unlikely to cause confusion with consumers. The court observed that trademark infringement law only prevents unauthorized uses of a trademark in connection with a commercial transaction in which the trademark is being used to confuse potential consumers. The court concluded that Bosley could not use the trademark law "either as a shield from Kremer's criticisms, or as a sword to shut Kremer up."

The court ruled that the issue of cybersquatting depended upon whether Kremer had a "bad-faith intent" to profit from his use of Bosley's trademark in his domain name. The lower court had dismissed this count, too, holding that Kremer's noncommercial use of the mark was also a defense to cybersquatting. The Ninth Circuit reversed and held that was only one of nine statutory factors to be considered, noting that Kremer had written a threatening letter to Bosley before launching his Web site. Accordingly, the court ordered the case to continue on this count, saying "it remains to be seen whether Bosley can establish that Kremer registered the domain name in bad faith."

Many consumers who start Web sites that are critical of companies do so for no reason other than making their dissatisfaction public. That type of public criticism will be protected by this decision. Here, however, Kremer wrote a threatening letter prior to launching his site, and that may have been a big mistake. Bosley will now have the chance to show he did so with a bad-faith intent to profit from his use of their trademark in his domain name.

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