Borrower Avoids Trademark and Cybersquatting Accusations in Bashing Its Lender Online

Borrower Avoids Trademark and Cybersquatting Accusations in Bashing Its Lender Online

A Minnesota federal court rejected trademark and cybersquatting claims levied against a borrower that created a website to warn consumers about what it perceived to be a lender's fraudulent business practices. Jalin Realty Capital Advisors v. A Better Wireless, 2013 U.S. Dist. LEXIS 2461 (D. Minn.  January 8, 2013) [enhanced version available to lexis.com subscribers].

The borrower, A Better Wireless (ABW), could not be found liable for cybersquatting because there was no evidence to conclude that it had acted with a bad faith intent to profit. On the trademark claim, the court held that the plaintiff, Jalin Realty Capital Advisors (Jalin), had not shown that it used the mark "JRCA" in connection with its services or that "JRCA" identified Jalin as the provider of its services in the minds of consumers.

ABW, which had sought a loan from Jalin, created a website with the domain name "jrca.info" and used the website to warn consumers about what it perceived to be Jalin's fraudulent business practices. Jalin sued, asserting multiple claims, including cybersquatting, trademark infringement and appropriation of personal name and likeness.

ABW argued that it registered the domain name "jrca.info" and maintained the website in a legitimate, good faith attempt to warn other consumers about what it believed were Jalin's fraudulent business practices. Jalin countered that ABW knew that it was posting incomplete, inaccurate information. However, Jalin offered no evidence suggesting that ABW intended to profit by creating the website.

"Jalin does not allege that ABW offered to sell the domain name to Jalin or anyone else," the court said, noting that cybersquatting required a bad faith intent to profit. "[N]or does Jalin allege that ABW offered to take down the website in exchange for money."

Jalin's claim of common law trademark infringement failed because there was no evidence that Jalin ever used the mark "JRCA." Consequently, that mark could not form the basis of Jalin's claim. Likewise, the court rejected Jalin's trademark claim based on the purported mark "Jalin Realty Capital Advisors."

"[T]here is no likelihood of confusion as a matter of law," the court said.  "It is implausible that consumers would somehow conclude that ABW's website was affiliated with Jalin, created by Jalin, or sponsored by Jalin."

The court went on to reject Jalin's claim that ABW appropriated Jalin's name for its own use and benefit when ABW used Jalin's initials in the domain name of its complaint website.

"Due to its recent adoption," the court noted, "the tort of appropriation is undeveloped in Minnesota. Whether an appropriation claim is cognizable on the facts of the present case is a question of first impression in Minnesota."

The court resolved this question against Jalin, underscoring that no Minnesota court had previously allowed a commercial entity, as opposed to a human being, to bring an appropriation claim.

"[A}llowing Jalin to bring an appropriation claim would make Minnesota a major outlier," the court said. "This Court sees no reason to predict that a Minnesota court would take the seemingly unprecedented step of allowing Jalin, a commercial entity, to pursue its appropriation claim."

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