## Facts

- DSPT International, Inc., a California men’s clothing company, used the “Equilibrio” brand since 1988 and developed the “EQ” brand around 1999.
- DSPT and Lucky Nahum worked together to create an online presence for DSPT’s clothing; the domain name **www.eq-Italy.com** was created solely to display DSPT products.
- Nahum registered the domain name in his own name; DSPT’s owner did not realize the registration was not in DSPT’s name.
- By 2005, the website functioned as DSPT’s online catalog and ordering tool used by customers at all hours.
- After Nahum’s relationship with DSPT deteriorated and he arranged work with a competitor, the website was altered to remove DSPT content and redirect inquiries to Nahum.
- DSPT alleged Nahum controlled the domain to pressure DSPT to pay disputed commissions, effectively withholding the domain from DSPT.
- DSPT sued; Nahum counterclaimed for unpaid commissions.
- A jury found DSPT owned valid trademarks “EQ” and “Equilibrio,” found the domain confusingly similar to DSPT’s mark, found Nahum acted with bad-faith intent to profit under the ACPA, rejected Nahum’s counterclaim, and awarded DSPT **$152,000**.

## Issues

1. Whether a defendant can have the ACPA-required “bad faith intent to profit” based on post-registration conduct, even if the domain was not originally registered in bad faith.
2. Whether using control of a domain name associated with a trademark to pressure the trademark owner for payment constitutes “bad faith intent to profit” under 15 U.S.C. § 1125(d).
3. Whether the evidence supported the jury’s damages award of $152,000 on the ACPA claim.

## Decision

- The Ninth Circuit affirmed the judgment for DSPT on the ACPA claim.
- The court held the jury could find bad-faith intent to profit based on Nahum’s later **use** of the domain to pressure DSPT, regardless of the initial registration motive.
- The court upheld the finding that **www.eq-Italy.com** was confusingly similar to DSPT’s “EQ” mark.
- The court held the evidence permitted a reasonable estimate of DSPT’s actual damages and affirmed the $152,000 award.

## Legal Principles

- Under the ACPA, liability exists where a person has a **bad faith intent to profit** from a mark and **registers, traffics in, or uses** a domain name identical or confusingly similar to a distinctive mark.
- The ACPA’s bad-faith inquiry is guided by statutory factors, but the list is nonexclusive and turns on the circumstances.
- Bad faith need not be present at the moment of registration; bad faith accompanying later **use** of the domain name can satisfy the statute.
- Using a domain name tied to another’s trademark to extract money or concessions from the trademark owner may constitute “intent to profit,” even when framed as collecting a disputed debt.
- A damages award under the ACPA may be upheld where the jury has an evidentiary basis to estimate business harm caused by loss or disruption of a website central to sales and ordering, without requiring mathematical precision.

## Conclusion

The court held that a former associate who controls a trademark-related domain name and withholds or alters it to pressure the trademark owner for payment can be liable for cybersquatting under the ACPA, and it affirmed the jury’s finding of bad faith and its $152,000 damages award.


DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213 (9th Cir. 2010)