Employers Council on Flexible Compensation v. Feltman (4th Cir.)

Filed: June 21, 2010
Per curiam opinion

Held: Statutory damages may be awarded for violations of the Anticybersquatting Consumer Protection Act (the “ACPA”).

Facts: The Employers Council on Flexible Compensation (“ECFC”) registered the domain name “ecfc.org.” The Employers Council on Flexible Compensation, Ltd. (“ECFC Ltd”), an entity whose owners were involved in litigation with ECFC, registered the domain name “ecfc.com” and maintained a website that was nearly identical to “ecfc.org.”

ECFC filed a lawsuit against ECFC Ltd alleging, among other things, violation of the ACPA. The trial court awarded $20,000 in statutory damages on the ACPA claim. ECFC Ltd appealed, arguing that the trial court abused its discretion in awarding the damages.

Analysis: On appeal, the Fourth Circuit held that the trial court did not abuse its discretion in awarding the damages. Under the ACPA, an owner of a protected mark may bring an action against any person who has a bad faith intent to profit from that mark and registers a domain name that is confusingly similar to that mark. The owner may recover statutory damages (instead of actual damages) in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.

The Fourth Circuit discussed several factors that shape the analysis of whether statutory damages may be awarded. These factors include exploitation of a close working relationship with the owner of a protected mark and conducting insufficient research as to whether the owner abandoned its rights in the marks.

The full opinion is available in pdf.